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First the largest US futures exchange in the country.
In damage control mode after reports yesterday that traders were abusing this system -- CME.
Now vowing to level the playing field.
That's after the Wall Street Journal expose the loophole that's leaving individual investors out of the loop with more on this Dick Grasso former chairman and CEO of the New York Stock Exchange Dick welcome back to the show it is always a pleasure to have Jerry always great to do with you thanks for inviting me well let's talk about the -- here for a second obviously some traders getting an advantage over others are seeing data that some aren't.
You say the problem is bigger than us.
I think -- if you start with the issues that the journal covered and it's two very excellent articles.
-- there is a technology.
Advantage that high frequency traders.
Seemingly have had on the CME and other markets I might -- And it CME was right to come out and -- -- it.
That want that kind of their regulators they said they're going to fix it.
I know Terry Duffy the executive chairman he's a terrific guy high integrity he says it's going to be fixed it's going to be fixed.
But the bigger problem Jerry is the structure.
Of the markets in this country is upside down house -- more than 60% of what happens each day.
Happens in dark pools and in.
I call them pond is that no one can -- women.
And that's wrong.
You know I looked today it's an out of public view is without the other hand is that they don't know what's going on individual investors can't play exactly and that's wrong you know in a world where you hear out of Washington.
Every nano second of the day transparency.
-- 60% of the volume trades -- that's wrong two thirds of the -- see now 61% of the CMA.
CME that is.
We had a story this week that there was a flash crash because of -- -- That was fake.
We've had high frequency traders stories is it any wonder.
That some 76%.
At individual investors say I don't want to invest in stocks I don't trust that says Gerri how wrong is that you know this coming Monday.
Is the third anniversary of the flash crash.
That for your viewers just to understand.
The magnitude of what happened that day.
A stock like X venture went from 44 dollars a share to less than a penny.
Back to 44 dollars in less than an hour that is that crazy nuts and it's three years we've not seen any major regulatory reform.
The SEC -- had lots of other issues to focus on in -- of true so the public look it's -- some people think these traders should be fine and well look.
Do we impose a tax on those people -- thing to do taxing is the absolute wrong thing to do taxing is -- that's just a way for Washington.
What little money in the kitty it doesn't solve the problem the problem Gerri yeah.
We've got to look at the structure of the equity markets the commodities markets in this country and ask a simple question.
Are they level.
Meaning are they fair to the least sophisticated user if they're not.
Regular -- -- reform is necessary.
But how do you do it in this case sent -- people want taxes other people want -- -- imposed time limits on -- -- taxes to get throwing what categories out what you have to do is get the regulatory agencies.
The SEC this CFTC.
Fed and treasury.
To look at the blueprint that was created.
Back six years ago and say it -- And now we're gonna start over okay with that with a very simple challenge.
92 year old grandmother okay understand what's happening is she being protected if she can understand it.
As long as we're protecting -- it's fine.
Think of this Jerry.
The public has left the equities markets in droves since really since the financial -- -- don't trust that I'm telling you and look what they've left on the table.
Last year the market was up 14%.
If you had cash under your mattress she got nothing.
If you had cash -- a money market fund he got two tenths of 1% app that is not that buying it anyway and if you're retired it's it's double jeopardy are those people.
This problem became so much worse when the exchanges went public.
And you were there when that happened for the New York Stock Exchange you presided over some of these big changes did you see the problem coming with high frequency trader at.
Let me first say the exchange went public long after they put the final shovel of dirt on my body sorry it didn't happen under me but.
Going public was a necessity for US markets because markets around the world had gone public.
And for them to be competitive they had to do it to the region but to do that they had to make money and how did they make money they opened the door to the high frequency traders look.
The high frequency trading category is a strategy.
That's got to be examined by the regulators.
If it's if it's wrong.
If it's corrosive to public confidence.
-- regulated or regulated out of business but let's not keep bringing our hands it's three years.
Since we saw the market drop a thousand points in less than an hour and nothing's been done about it.
I'll tell you a couple of quick things that can really change the -- the economics number one.
Market centers all market -- who today provide financial incentives to those core market making on their exchanges meaning.
On economic -- can become economic -- should be outlawed.
The technology that delivers data to all investors should be leveled.
I can't as a high frequency trader getting access -- that data faster than you as an individual investor.
Just take those two Jerry you'll bring the public back in droves because remember.
This is now 31 years that we're in a bull market the market is gone from 800 on the -- up to 161000.
Would you rather for the next thirty years -- a treasury bond.
We'll watch your money go watch warning times I'm on your page I agree but we got to make these that markets leveled playing fields for everybody and responsibility.
Of the regulators know taxation.
That's -- we learn that you know years and years ago when we sent.
The bond business.
As a result of the interest equalization tax we sent it off -- never came back.
Let's not be foolish let's do the right thing.
The public user in the market I think people have to feel like it's problem and he's gotten it which starting grassroots here Dick Grasso thanks for coming on it is always so good to see right to do when you got your Florida -- and it's so impressive.
Thanks Gerri good to see you get this.
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