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	<title>Business &#38; MoneyCategory: Exchanges &#124; Business &#38; Money &#124; TIME.com</title>
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		<title>Business &#38; MoneyCategory: Exchanges &#124; Business &#38; Money &#124; TIME.com</title>
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		<title>What the Boston Bombing Means for the Economy and the Stock Market</title>
		<link>http://business.time.com/2013/04/16/what-the-boston-bombing-means-for-the-economy-and-the-stock-market/</link>
		<comments>http://business.time.com/2013/04/16/what-the-boston-bombing-means-for-the-economy-and-the-stock-market/#comments</comments>
		<pubDate>Tue, 16 Apr 2013 12:23:11 +0000</pubDate>
		<dc:creator>Michael Sivy</dc:creator>
				<category><![CDATA[Bonds]]></category>
		<category><![CDATA[Commodities]]></category>
		<category><![CDATA[Economy]]></category>
		<category><![CDATA[Exchanges]]></category>
		<category><![CDATA[Investing]]></category>
		<category><![CDATA[Markets]]></category>
		<category><![CDATA[Mutual Funds]]></category>
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		<guid isPermaLink="false">http://business.time.com/?p=77856</guid>
		<description><![CDATA[Terrorism poisons everything. The greatest damage, of course, results from the lives that are lost and the people who are injured. Nonetheless, it’s natural to wonder whether an event such as yesterday’s bombing at the Boston Marathon is likely to have a longer-term impact on the economy and the stock market. Anything that makes people more anxious and uncertain about the future has a negative effect on business and on stocks. The bombing occurred shortly before 3 p.m. E.T., and the Dow — which had earlier in the day started to rally from the day’s lows — fell another 120 points in the last hour of trading. Is that likely to be it? Or should investors expect further big losses over the coming days and even weeks? The attack on September 11, 2001, seems to suggest that the effects of a terrorist attack might be long lasting. Following that tragedy, the Dow dropped 1,400 points and needed more than two months to get back to even. However, it’s worth noting that at the time of the attack on the World Trade Center, the Dow was already down 1,500 points from the year’s high. And after the market made up its losses from 9/11, it went on to gain another 1,000 points in the first four months of 2002. So clearly there were other factors driving stock prices. Moreover, not all incidents have such a drastic impact. In fact, it’s possible to divide terrorist acts into four categories with dramatically different economic results: Attacks on individual companies. Terrorism that targets a specific company — such as the kidnapping of employees or the bombing of offices — has a damaging effect on the shares of the company targeted. In some cases, a stock can be hit hard and have a sizable loss. But overall, the effect tends not to be very great. A recent study found that in 75 incidents, the average stock-market loss was only 1% or 2%. Competitors were not affected one way or the other. Attacks on the energy sector.<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=77856&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Wall Street &amp; Markets</primary_category><primary_category_link>http://business.time.com/category/wall-street-markets/</primary_category_link>
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			<media:title type="html">michaelsivy</media:title>
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		<title>Why Derivatives May Be the Biggest Risk for the Global Economy</title>
		<link>http://business.time.com/2013/03/27/why-derivatives-may-be-the-biggest-risk-for-the-global-economy/</link>
		<comments>http://business.time.com/2013/03/27/why-derivatives-may-be-the-biggest-risk-for-the-global-economy/#comments</comments>
		<pubDate>Wed, 27 Mar 2013 15:06:48 +0000</pubDate>
		<dc:creator>Michael Sivy</dc:creator>
				<category><![CDATA[Banking]]></category>
		<category><![CDATA[Bonds]]></category>
		<category><![CDATA[Commodities]]></category>
		<category><![CDATA[Economics]]></category>
		<category><![CDATA[Economics & Policy]]></category>
		<category><![CDATA[Economy]]></category>
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		<category><![CDATA[Europe]]></category>
		<category><![CDATA[Exchanges]]></category>
		<category><![CDATA[Federal Reserve]]></category>
		<category><![CDATA[Financial Reform]]></category>
		<category><![CDATA[Financial Regulation]]></category>
		<category><![CDATA[Government]]></category>
		<category><![CDATA[Investing]]></category>
		<category><![CDATA[Investment Banking]]></category>
		<category><![CDATA[Markets]]></category>
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		<guid isPermaLink="false">http://business.time.com/?p=75881</guid>
		<description><![CDATA[Four years after the U.S. recession ended, the global economy is still beset by problems. The present danger comes from Cyprus – where the sea foam once gave birth to the goddess Aphrodite but now only creates froth in panicky financial markets. The proposed bailout plan for troubled Cypriot banks would impose losses of up to 40% on the largest depositors. And that, in turn, could undermine confidence in the banks of other troubled euro zone countries. Cyprus is only the latest challenge for global financial stability, however. In the U.S., deteriorating urban finances – from Detroit to Stockton, Calif. – threaten municipal bond holders, public-sector workers, and taxpayers. In addition, a rise in long-term interest rates seems inevitable sooner or later, either because of inflation or because the Federal Reserve backs away from its easy-money policies. Higher interest rates would mean big losses for bond investors, and also for government-sponsored entities, such as Fannie Mae and Freddie Mac, that hold mortgage-backed assets. The greatest risk of all, however, may be one of the least visible – namely, the expanding, shadowy market for derivatives. These highly sophisticated investments have contributed to financial disasters from the 2008 bankruptcy of Lehman Brothers to J.P. Morgan’s 2012 trading losses in London, which totaled more than $6 billion. (MORE: The $600 Billion the IRS Can&#8217;t Collect) Basically, derivatives are financial contracts with values that are derived from the behavior of something else – interest rates, stock indexes, mortgages, commodities, or even the weather. Just as homebuyers make only a down payment when they buy a house with a mortgage, derivatives traders put down only a small amount of cash. Moreover, one derivative can be used to offset or serve as collateral for another. The result is that a massive edifice of derivatives can be supported by a relatively small amount of real money. Some derivatives, such as typical stock options, trade on exchanges. But many are simply private contracts between banks or other sophisticated investors. As a result, it’s hard to know the total<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=75881&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Economy &amp; Policy</primary_category><primary_category_link>http://business.time.com/category/economy-policy/</primary_category_link>
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			<media:title type="html">michaelsivy</media:title>
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		<item>
		<title>Why the New York Stock Exchange Sold Out to a Upstart You&#8217;ve Never Heard Of</title>
		<link>http://business.time.com/2012/12/21/why-the-new-york-stock-exchange-sold-out-to-a-upstart-youve-never-heard-of/</link>
		<comments>http://business.time.com/2012/12/21/why-the-new-york-stock-exchange-sold-out-to-a-upstart-youve-never-heard-of/#comments</comments>
		<pubDate>Fri, 21 Dec 2012 10:45:33 +0000</pubDate>
		<dc:creator>Christopher Matthews</dc:creator>
				<category><![CDATA[Exchanges]]></category>
		<category><![CDATA[Wall Street & Markets]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=64882</guid>
		<description><![CDATA[The recent history of the New York Stock Exchange (NYSE) is interesting in part because it&#8217;s an illustration of how disruptive new technology can be. Twenty years ago the NYSE and it&#8217;s relatively young rival NASDAQ accounted for 97% of the total U.S. stock trading volume. Then the rapid development of computer technology, combined with a handful of regulatory changes, enabled dozens of alternative trading venues to sprout up over the past two decades, increasing competition for volume and driving down the exchanges&#8217; profits, ultimately pushing the NYSE  &#8211; one of the most enduring symbols of American capitalism &#8212; towards increasing irrelevancy. So yesterday&#8217;s announcement that a young, Atlanta-based commodity and derivatives exchange called IntercontinentalExchange (ICE) has agreed to purchase NYSE Euronext for $8.2 billion is just another sign of traditional exchanges&#8217; waning importance on Wall Street. What&#8217;s more, analysts believe that the primary appeal of NYSE to ICE was not even its historic trading floor or equity exchange business, but rather for a London-based derivatives exchange it owns, called Liffe. (MORE: High Frequency Trading: Wall Street’s Doomsday Machine?) It&#8217;s not the first time that ICE tried to aquire Liffe. When NYSE Euornext and the German stock exchange operator Deutsche Borsche tried (unsuccessfully) to merge earlier this year, NASDAQ and ICE hatched a plan to swoop in, purchase, and split up NYSE Euronext, with ICE taking the Liffe and NASDAQ taking the rest of the company. As Diego Perfumo, an analyst at Equity Research Desk told Bloomberg News: “When Deutsche Boerse and NYSE Euronext tried to merge, ICE immediately partnered with Nasdaq and tried to poach NYSE away . . . ICE was going to keep Liffe and Nasdaq was going to keep the rest of NYSE . . . What [ICE CEO] Sprecher is after is Liffe.” Why is a derivatives exchange so attractive to ICE while the stock exchanges NYSE Euronext operate an afterthought? Derivatives exchanges are much more profitable than equity exchanges. Felix Salmon of Reuters explains: &#8220;There are lots of stock exchanges, and none of them make much money. By contrast, there are relatively few derivatives exchanges,<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=64882&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Exchanges</primary_category><primary_category_link>http://business.time.com/category/wall-street-markets/exchanges-wall-street-markets/</primary_category_link>
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			<media:title type="html">christopherrmatthews</media:title>
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		<title>Better Safe Than Sorry: Why U.S. Securities Exchanges Closed for Second &#8212; and Maybe Third &#8212; Straight Day</title>
		<link>http://business.time.com/2012/10/30/better-safe-than-sorry-u-s-securities-exchanges-close-for-second-straight-day/</link>
		<comments>http://business.time.com/2012/10/30/better-safe-than-sorry-u-s-securities-exchanges-close-for-second-straight-day/#comments</comments>
		<pubDate>Tue, 30 Oct 2012 18:25:38 +0000</pubDate>
		<dc:creator>Christopher Matthews</dc:creator>
				<category><![CDATA[Exchanges]]></category>
		<category><![CDATA[Wall Street & Markets]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=59460</guid>
		<description><![CDATA[It has been estimated that as many as 60 million people could be directly affected by Hurricane Sandy, but there are a few ways in which the entire country will feel the impact of this powerful storm. One way is through the closing of U.S. securities exchanges for the second straight day &#8212; the first time since 1888 that the country&#8217;s primary stock exchanges have been shut down for consecutive days due to weather. The nation&#8217;s stock exchanges &#8212; like the New York Stock Exchange, NASDAQ, and the lesser known electronic forums like BATS and Direct Edge &#8212; decided in conjunction with Federal regulators to remain closed throughout Monday and Tuesday. The bond markets were active until noon yesterday, but are closed today. Securities markets are expected to open Wednesday, although a final decision will be made later in the day. (MORE: Should the Federal Government Be Subsidizing Flood Insurance?) Until late Sunday night, however, it was thought that the recent evolution of stock exchanges towards decentralized, electronic markets would enable trading to go on regardless of the weather situation in New York. Indeed, even with the decision to shut down trading both yesterday and today, some analysts still believe that market activity could have continued without any problems. As Adam Sussman of market technology consulting firm TABB Group told Fortune, &#8220;Stock trading could absolutely be operating right now . . . I&#8217;m kind of surprised they decided not to trade electronically.&#8221; Once upon a time a crippling storm like Sandy hitting New York City would have undoubtedly shut down financial markets. The last time the New York Stock Exchange was shut down for weather was in 1985, when New York City was besieged by Hurricane Gloria. The broader stock market was so dominated by activity on the NYSE at that time that according to a report in Reuters,&#8221;it could essentially make decisions about the market unilaterally.&#8221; But because so much trading activity has since moved from the floor of the New York Stock Exchange to a combination of electronic<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=59460&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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		<slash:comments>0</slash:comments>
	<primary_category>Exchanges</primary_category><primary_category_link>http://business.time.com/category/wall-street-markets/exchanges-wall-street-markets/</primary_category_link>
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			<media:title type="html">christopherrmatthews</media:title>
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		<title>25 Years Later: In the Crash of 1987, the Seeds of the Great Recession</title>
		<link>http://business.time.com/2012/10/22/25-years-later-in-the-crash-of-1987-the-seeds-of-the-great-recession/</link>
		<comments>http://business.time.com/2012/10/22/25-years-later-in-the-crash-of-1987-the-seeds-of-the-great-recession/#comments</comments>
		<pubDate>Mon, 22 Oct 2012 12:00:34 +0000</pubDate>
		<dc:creator>Christopher Matthews</dc:creator>
				<category><![CDATA[Economy & Policy]]></category>
		<category><![CDATA[Exchanges]]></category>
		<category><![CDATA[Financial Regulation]]></category>
		<category><![CDATA[Wall Street & Markets]]></category>
		<category><![CDATA[1987 crash]]></category>
		<category><![CDATA[market panic]]></category>

		<guid isPermaLink="false">http://business.time.com/?p=52348</guid>
		<description><![CDATA[“History doesn’t repeat itself, but it does rhyme.” This quote, often attributed to Mark Twain, resonates with us for its pithy description of an irony we encounter everyday: In a world marked by rapid technological, political and social change, certain themes remain eternal. Wall Street is not immune to this phenomenon. There have been few periods in its history that have been more dynamic than the past quarter century. Since the 1980s, Wall Street has seen the emergence of computerized trading, the application of advanced mathematical techniques and theories to trading, and the total upheaval of the very structure of the markets on which securities are traded. Yet even with all these changes, the essence of The Street has stayed the same. This may be best illustrated by the great crash of October 1987. Twenty-five years ago this week, American stock markets suffered one of its largest three-day declines in history, with the S&#38;P 500 loosing 28.5% of its value between October 14 and 19.  The total loss of wealth over that period was approximately $1 trillion, according to a Presidential Task Force report on the crash. At first glance the convulsions in the market in 1987 bear little resemblance to the financial problems we face today. The 1987 crash was not the result of a financial crisis, nor did it lead to a prolonged recession. Look more deeply at the causes and repercussions of the crash, however, and you find many that “rhyme” with those of the 2008 crisis. (PHOTOS: Occupy Wall Street, One Year Later: Protesters Return to the Movement’s Roots) For instance, some of the main causes of the 1987 crash were new and untested financial instruments deployed in the market by computer programs. In addition, it was the first modern economic crash to be a truly international phenomenon, as it spread from New York across the globe almost instantaneously. Finally, the crisis of 1987 was coincidental with Alan Greenspan taking over the Federal Reserve &#8212; and Greenspan&#8217;s attitude towards crisis management and regulation greatly influenced the 2008<img alt="" border="0" src="http://stats.wordpress.com/b.gif?host=business.time.com&#038;blog=31173800&#038;post=54428&#038;subd=timebusinessblog&#038;ref=&#038;feed=1" width="1" height="1" />]]></description>
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	<primary_category>Financial Regulation</primary_category><primary_category_link>http://business.time.com/category/economy-policy/financial-regulation-economy-policy/</primary_category_link><featured_image>http://timebusinessblog.files.wordpress.com/2012/10/biz_smith_10221.jpg?w=240</featured_image>
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			<media:title type="html">Trading On The Floor Of The NYSE On The 25th Anniversary Of Black Friday</media:title>
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			<media:title type="html">christopherrmatthews</media:title>
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