NEW YORK (
TheStreet) -- It was an interview with Dick Grasso, the former chairman and chief executive officer of the New York Stock Exchange, on
CNBC that brought into focus the extent to which the advances in globalization and technology have eroded the iconic status of the
(NYX) since the terrorist attacks of 9/11.
On Monday morning, the financial media were spending ample time ahead of the opening bell debriefing in the wake of Hurricane Irene. A natural question for Grasso was how trading could have continued had Irene managed to slam into New York City at full force. The answer? Thanks to advances in technology and moving key systems and backup systems outside the city, the NYSE could have quickly and easily gone fully electronic.
"Lower Manhattan as a processing site is no longer key for the operations of the exchange," said Grasso.
That was both reassuring and somewhat disconcerting for those watching and the panel of "Squawk Box" anchors.
Grasso was immediately asked if the NYSE's future was one in which the exchange didn't need to have an open in the U.S.
"Well, you're right," said Grasso. "Between the upcoming merger with
, they have the ability to put their market to any of those alternative sites. What, of course, we have come to take for granted, unfortunately, is the strength and depth of the New York Stock Exchange."
Grasso went on to say that the NYSE's current management understood the significance of physically opening the market, even if a majority of trading occurred electronically. Still, the
anchors' minds had gone down the rabbit hole along with viewers, reaching an unpleasant conclusion.
"Do you think there's ever a time in the future where we actually, where the NYSE sells that piece of property, that beautiful building downtown," Michelle Caruso-Cabrera asked Grasso.
"I hope not, Michelle, because I think that represents the real icon of American capitalism -- what makes us different as a capital market to the rest of the world," said Grasso. "I know how much the current management, you know, appreciates that and are going to enhance it with their upcoming Deutsche Borse combination."
The NYSE still sees a crucial role for a physical open. "A physically convened market such as the NYSE plays a critically important and vital role in our capital markets, especially during times of volatility such as this past August," said a NYSE spokesperson. "With respect to our contingency plans for Hurricane Irene, if necessary the NYSE market would have remained open with trades processed through NYSE Arca, our fully electronic exchange, which would have been officially designated NYSE while operating under NYSE Arca rules."
The NYSE hasn't been alone in losing clout on the global financial scene over the last 10 years. Its loss of influence was inevitable given the forces of globalization it helped spur. The impact has been felt throughout Wall Street.
Employment on Wall Street has swung up and down with the markets, but has largely been on the decline.
"Wall Street has never regained its peak employment level, 195,400, set during the 'tech bubble' in 2000," said a June 2009 report produced by the New York Department of Labor. Securities employment in the city managed to rise to 186,100 in 2007, making up 6% of the city's private-sector employment, from 161,300 in 2003. However, employment has returned to 2007 levels. In July, the New York Labor Department said the number of Wall Street jobs had fallen to an eight-month low of 168,300.