PRIVATIZING THE PRIVATE SECTOR

One serious objection to turning say Social Security funds over to the securities markets is that these markets are often run by MOTU for their own benefit, often without any public disclosure.

Long before German deal, NYSE was mostly symbolic
By DAVID K. RANDALL, AP Business Writer David K. Randall, Ap Business Writer – Tue Feb 15, 10:04 pm ET

The exchange's importance in the complex web of the stock market is already largely symbolic.

Facilitating the trading of actual stocks makes up a small and decreasing part of NYSE Euronext's revenue. The exchange makes more money from selling complex financial contracts, market data to companies like Google and Yahoo that offer stock quotes, and the fees companies pay to be listed on the exchange.

Many orders are instead routed through one of more than a dozen computerized exchanges scattered across the nation, each competing for transactions by offering faster execution.

Large investment firms may also trade shares on private "dark pools" that allow big mutual funds to buy or sell stock without affecting its price or alerting others to the size of their order.

Stock trading by way of individual brokers is becoming a relic in many ways. Many hedge funds and institutions now trade using sophisticated computer programs that are thought to make up about 70 percent of each day's total volume. Known as high-frequency trading, these programs allow institutions to own a stock for less than 60 seconds at a time and sometimes without a human operator knowing what the computer has bought.