Hurricane and Super Storms Sandy was rather historic in many regards. Certainly the size of the storm and the massive energy behind it along with the storm surges and deluge of rain was nearly of biblical proportions. But it was historic for another reason, it actually shut down the New York Stock Exchange for two days, something which hadn’t happened in 30 years. My question is why did they need to shut it down at all? Shouldn’t something as important as the NYSE have redundancies? Okay so let’s talk.
It turns out that since most of the New York Stock Exchange runs by computers, it is possible to run it from somewhere else. When the markets resumed after those two days, one of which happened to coincide with the 1929 stock market crash, the traders were unable to use the 4G wireless network, or use the Internet very much. This made trading very difficult, although not impossible. Basically they were trading on a trading floor operating at less than optimum. That doesn’t make sense either.
Well, in light of all this, I’d like to talk about three major points;
1.) The 1% Argument
2.) The Secondary Location Option
3.) Better Business Continuity Planning
In some regards it’s good to have shut down the stock market because it shows the 99% that even the 1% still was unable to do their business in this massive storm. People might have been rather upset that Wall Street just kept on trading even though the city was in near ruin. That wouldn’t have played very well to the population having gone through a terrorizing couple of days during the storm, not to mention all the devastation, and power outages in the aftermath.
Next, why didn’t the NYSE have a secondary location option? It turns out they did, they have an alternate site where they could redirect everything, and they had plenty of time to get it up and running and operational, and switch everything over for the next week or so, until things came back to normal, the subways were running again, and all the power was on in the city, along with the cell phones and Internet access.
It seems to me there needs to be better business continuity planning when it comes to such important aspects to our financial sector in the economy. It should have been an easy switch over, and merely a bump in the road. Rather, it was made into a great big event, making us wonder just exactly how durable New York City and our financial markets are in time of crisis. That doesn’t give investors very much confidence does it? We can do better than this. Indeed I hope you will please consider all think on it.
Reference Article, perhaps of interest?
1.) Wall Street Journal, October 31, 2012, “Returning Traders Are Facing End-of-October Scramble,” by Tom Lauricella, Alexandra Scaggs, and Jonathan Cheng.