A first person account from Wall Street

Wall Street will never forget Monday, September 29, when the lords of high finance were rudely reminded that it isn't easy to get away with imprudent investments, no matter which Ivy League degree they possess.
In a major setback to not only the Bush administration, but also to global markets, the US House of Representatives on Monday rejected the $700 billion emergency rescue package to bailout bankrupt American financial institutions. The House voted against the package 228 to 205.
The bailout plan was nixed not only because the figure of the financial assistance -- $700 billion -- was almost pulled out of thin air without solid basis, but also because the American taxpayer was supposed to fund it. The anger that bubbled over and poured onto the streets in the form of protests and demonstrations across the United States was one of the main reasons why the plan was vetoed.
The consequences were instant. The benchmark Dow Jones Industrial Average fell by a whopping 777.68 points, the highest ever in American history, to touch 10,365.45. The Nasdaq fell by 199.61 points to settle at 1,983.73.

The meltdown in the US markets has been stunning. And while Americans try to come to terms with the bloodbath, rediff.com spoke to a senior employee of Bank of America about the blackest day in US stock market history.
This is what he had to say:
"I usually go to my office at Times Square at 7 a.m. As usual, I first checked my mails when I reached the office. When the market opened, it was already down by some 300-plus points. We have a huge trading research staff which supports trading activities. In our office we have a couple of floors for trading activity. On the fifth floor, some 400 terminals are located with 4-5 huge screens showing the market movements and also CNBC."
"When the market was down, we understood that long-term and short-term sentiments were affecting it. One of the reasons why the bailout plan was rejected was because of the uncertainty it carried."
"Nobody is sure whether or not the bailout plan will really help. Global equity markets are going to be hit by American developments. Our trading floor was buzzing with activity. Our terminals were showing an unprecedented flow of transactions."
"By 11 a.m. speculation was there that the bailout bill may not help, it may not solve the current financial problems. Some 400 traders of our bank were being aided by internal commentary of our seniors. They were relaying messages after messages to the trading heads. They were trying to understand the situation."
"By noon, as the news came that the bill to rescue the market had been rejected, there was complete silence on the entire floor for a few moments. We were trying to digest what had just hit us. Everybody was awestruck!"
"Our senior managers went into the conference room. When they came out, the market had plunged and lost almost 700 points. The market had overreacted. After lunch, there was feeling that we had overreacted. Maybe, things may not be that bad, after all."
"News from Washington had settled in by then. People just gave up. Whatever strategy they had, it couldn't save the day. The entire trading floor was excited. The move sent shock waves across the financial markets, including the Wall Street, plunging stocks by 778 points (at close of trading)."
"After the rejection of the bailout plan, every face wore an uncertain look on the trading floor. We bankers didn't lose money because we are using clients' money and on a day like this too, we earn money through commission. We made money! My own terminal had 10,000 trades worth over $40 million. We are not worried about what happened today. We are worried what will happen tomorrow."
"People left the trading floor thinking that tomorrow will be another miserable day."
"Some people thought that the bailout was the last chance to stop the United States from sliding into recession. Others think that the bailout plan will help managers. They will correct their own positions and continue to thrive. The bailout plan would have given liquidity to the market. We are not worried about losing one day or gaining one day."
"But America's biggest finance market, market technicals and fundamentals are failing. Were we wrong all these years? We face this question today. We also ask does this bailout rejection mean it is the end of capitalism? Will New York lose its economic edge? Some believe that it is unethical for the US government to bailout failing companies."
"If the US preaches that countries should not intervene in such crises and let market forces take their own course, how can it do the opposite? It is unethical to rescue failing banks. If elections were not round the corner, the bailout plan would have been different."
"Things are looking hopeless because everything is so wrong that it is difficult to keep up hope. We know it will take a long time to rescue the economy. Meanwhile, people will suffer. America has not declared it yet, but it is facing a recession."
"I still think, and would like to think, that America has not failed yet. It is 15 years ahead (of the world) in whatever it does. Only that gap is now reducing. America is innovative and knows how to use others."

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World's 8 biggest stock exchanges

You either make or break your fortune in stock markets, it is said. And rightly so. While we often get to hear of men turning paupers overnight when the stock markets crash, tales of people like Warren Buffett and Rakesh Jhunjhunwala inspire us to dream big.
Here we present information about the world's eight biggest stock markets. They have not been ranked. Read on...
1. New York Stock Exchange: $21.79 trillion share trades
The New York Stock Exchange (NYSE) is nicknamed the 'Big Board'. This is the largest stock exchange in the world by dollar volume with 2,764 listed securities. It has the second most securities of all stock exchanges.
The NYSE originated on May 17, 1792. On that day, the Buttonwood Agreement was signed by 24 stock brokers outside New York's 68 Wall Street under a buttonwood tree.
The first office of NYSE was a room at 40 Wall Street rented for $200 a month. NYSE was gutted in the Great Fire of New York in 1835 and reconstructed soon after. In 1865, it moved to 10-12 Broad Street.
2. NASDAQ: $11.81 trillion share trades
The NASDAQ is the acronym for National Association of Securities Dealers Automated Quotation System. An American stock exchange, NASDAQ is the largest electronic screen-based equity securities trading market in the US.
It is owned and operated by the NASDAQ OMX Group.
With about 3,200 companies in its ambit, NASDAQ has more trading volume per day than any other stock exchange.
NASDAQ came into being in 1971 by the National Association of Securities Dealers. The latter divested themselves of it in a series of sales in 2000 and 2001.
NASDAQ was the successor to the over-the-counter (OTC) and the 'Curb Exchange' systems of trading. As late as 1987, the NASDAQ exchange was commonly referred to as the OTC.
3. The London Stock Exchange: $7.57 trillion share trades
London Stock Exchange, or LSE, is located in London, England. It is part of the London Stock Exchange Group plc.
At present, it is situated in Paternoster Square close to St Paul's Cathedral in the City of London. One of the largest stock exchanges in the world, LSE was founded in 1801.
The trade in shares in London began with the need to finance two voyages: The Muscovy Company's attempt to reach China via the White Sea north of Russia, and the East India Company voyage to India and the east.
Unable to finance these costly journeys, the companies raised the money by selling shares to merchants, giving them a right to a portion of any profits eventually made.
4. Tokyo Stock Exchange: $5.82 trillion share trades
The Tokyo Stock Exchange, or TSE, located in Tokyo, Japan, is the second largest stock exchange in the world by market value, second to the New York Stock Exchange, but 4th in terms of worth of shares traded.
It currently lists 2,271 domestic companies and 31 foreign companies.
The Tokyo Stock Exchange was established on May 15, 1878, as the Tokyo Kabushiki Torihikijo under the direction of then Finance Minister Okuma Shigenobu and capitalist advocate Shibusawa Eiichi. Trading began on June 1, 1878.
In 1943, the exchange was combined with 10 other stock exchanges in major Japanese cities to form a single Japanese Stock Exchange. The combined exchange was shut down and reorganised shortly after the bombing of Nagasaki.
5. Euronext: $3.85 trillion share trades
Euronext N.V. is a pan-European stock exchange based in Paris with subsidiaries in Belgium, France, Netherlands, Luxembourg, Portugal and the United Kingdom.
In addition to equities and derivatives markets, the Euronext group provides clearing and information services.
Not too long ago, Euronext merged with NYSE Group to form NYSE Euronext, the 'first global stock exchange'.
Euronext was formed on September 22, 2000 in a merger of the Amsterdam Stock Exchange, Brussels Stock Exchange, and Paris Bourse.
In December 2001, Euronext acquired the shares of the London International Financial Futures and Options Exchange, which continues to operate under its own governance.
6. Deutsche Borse: $2.74 trillion share trades
Deutsche Borse AG is a marketplace organiser for the trading of shares and other securities. It also is a transaction services provider. It gives companies and investors access to global capital markets.
Deutsche Borse was founded in 1992. The headquarters are in Frankfurt, Germany.
More than 3,200 employees of the exchange serve customers in Europe, the US and Asia. Deutsche Borse has locations in Germany, Luxembourg, Switzerland, Czech Republic and Spain, as well as representative offices in London, Paris, Chicago, New York, Hong Kong, and Dubai.
FWB Frankfurter Wertpapierborse (Frankfurt Stock Exchange), is one of the world's largest trading centers for securities. With a share in turnover of around 90 per cent, it is the largest of the German stock exchanges.
Deutsche Borse AG operates the Frankfurt Stock Exchange.
In 2001, Deutsche Borse tried to merge with the London Stock Exchange, followed in 2006 by a takeover bid, both rejected by LSE.
7. Borsa Italiana: $1.59 trillion share trades
The Borsa Italiana S.p. A., based in Milan, is Italy's main stock exchange. It was privatised in 1997, and was acquired by the London Stock Exchange in October 2007.
Borsa Italiana has managing responsibility for Italy's derivatives markets and its fixed income market.
Milan's Borsa di Commercio (Commodities Exchange) opened under a vice-royal decree on 16 January 1808 and it operated under public ownership until 1998.
It was sold to a consortium of banks, and operated under a S.p. A. holding company between January 2, 1998 and an all-share takeover by the London Stock Exchange on October 1, 2007.
8. SWX Swiss Exchange: $1.40 trillion share trades
SWX Swiss Exchange is Switzerland's stock exchange, based in Zurich.
The main stock market index for the SWX Swiss Exchange is the SMI. The index consists of the 20 most significant equity-securities based on the free float market capitalisation.
The exchange also trades other securities such as Swiss government bonds and derivatives such as stock options.
The SWX is the first stock exchange in the world to incorporate a fully automated tradingsystem in 1995..
The SWX is the joint owners of the Eurex, world's largest futures and derivatives exchange along with their German partners Deutsche Borse. In July 2004, the Swiss Stock Exchange rejected a proposal of merger from the German company.