NEW YORK ( TheStreet) -- Last summer, when I visited TheStreet.com's Wall Street office on my way to an assignment, I noticed the area around the New York Stock Exchange had become something of a movie set, that it was no longer the center of trading but a stage where trading was discussed.
I was more right than I realized. It's clear now that Wall Street is indeed obsolete, replaced by computers and software, and that the actual ownership of things is less important than the casinos of risk built on top of them. The deal Getco and ICE are computers. The don't sleep. They mainly trade esoteric instruments only dimly related to actual ownership of anything. The trades are usually pre-set by software algorithms, not by humans at all. Despite the 2008 market crash, and despite Knight's own example of software failure, global trading keeps moving into this dimly regulated computerized netherworld, a virtual casino where fortunes are made and lost in a heartbeat, and where cops are almost guaranteed to be several steps behind the robbers. The instruments on which trading is based are futures, options and other derivatives, not real commodities, not real stakes in companies, but imaginary instruments on which traders' software programs can get more action. The trading volume of the New York Stock Exchange, and the value of its exchange, have been falling for years because the virtual casino provides more, better, faster action. But we're losing the point of trading at all. Companies need capital, commodities need markets, all sorts of entities need debt financing. Who is left holding the bag when the casino has finished its work? What is the value of individuals trading a market that's rigged by software and lives in the clouds? Merry Christmas, Wall Street. Now disappear. At the time of publication the author had a position in MSFT. Follow @DanaBlankenhorn This article was written by an independent contributor, separate from TheStreet's regular news coverage.