Dear PGM Capital Blog readers,
First of all we would like to use this opportunity to express our deepest sympathy to all those people who have been affected by storm Sandy, that hit the North Eastern States of the USA, on Monday 29 2012.
What the USA media based on sensation called “Super Storm Sandy” or “Franken-Storm” was called by the National Hurricane Center “Post Tropical Storm Sandy” as it reached landfall as can be seen from below chart.
As a precaution and consequence of Storm Sandy, the New York Stock Exchange and NASDAQ both remained closed for trading on Monday October 29 and Tuesday October 30th 2012, this for the first time since the events of September 11 2001.
In 1985 it was hurricane Gloria, a category 1 hurricane, that hit New York and forced the NYSE to close on September 27 of that year.
The last time the New York Stock Exchange had to close for two days for weather related reasons was in 1888.
Ladies and Gentleman, we are currently living in 2012, in the flat-world and knowledge age, in an era where traders don’t have to be present physically in an exchange to be able to trade on behalf of their companies or clients. Which means that in today’s world floor traders are only there for traditional purposes. It is also worth mentioning that currently most of the volumes on the markets are based on electronic and automated computer trading.
It is therefore completely unacceptable for an investor that in this electronically dominated Flat and Global world, the NYSE as well as the NASDAQ were closed for two consecutive days for which not even electronic trading was possible.
On top of this, major institutional and international investors may lose their confidence in the USA markets and exchanges.
The decision of closing the NYSE and NASDAQ is even more questionable considering the fact that the COMEX, NYMEX and Globex, all based in New York City, remained open both these days.
This event clearly shows the poor quality of USA’s physical, electronic and technological infrastructure, which in the end will lead to the USA losing its status of Economic super power and financial capital of the world.
During our most recent presentations and lectures we have always stressed to our audiences of the need to have a globally diversified portfolio and access to trading in several global markets.
The closing of the NYSE as well as the NASDAQ on Monday October 29 and 30th proves that we are right, because only those with access to non-US exchanges were able to trade on behalf of their clients or in their own portfolios.
What most people forget is that you can only sell a security on the same market where you bought it. The events of closing of the NYSE as well the NASDAQ on Monday and Tuesday October 29 and 30th due to a Post Tropical Storm which prevented people from trading in New York, proves that unless New York upgrades its physical and electronic infrastructure to present world standards, it does not deserve to be called the financial capital of the world and consequently diversification of your portfolio out of the USA is higly advisable.
We hope to have informed you satisfactorily and look forward to being at your service
Yours sincerely
Eric Panneflek