This is Part One of the Industry Primers audio program on exchanges and financial market infrastructure, published by Latticework from MOI Global. It is the story of the industry, told for a general audience of lifelong learners. (Part Two digs deeper into the industry fundamentals from an investor’s standpoint. An in-depth industry research report is also available.)
This program runs from Amsterdam in 1602 to the prediction markets of 2026, in thirteen sections. It opens on a December afternoon in 2012, when an Atlanta company most people had never heard of agreed to buy the New York Stock Exchange and said on television that it wanted a London futures business rather than the building or the brand. It then goes back to the night the subscription for the Dutch East India Company closed at Dirck van Os’s house in Amsterdam, with the clause in the capital book that made a share transferable; to the London brokers who paid sixpence each in 1773 to rename their coffee house the Stock Exchange; and to the twenty-four brokers who signed seventy-three words under a buttonwood tree on Wall Street in 1792 and fixed a commission that lasted 183 years.
From there the story follows the club as it becomes property and then a public company. It covers the price of a seat on the New York exchange across a century and a half, and Richard Whitney, who bid for United States Steel on the floor during the crash of 1929 and was sentenced nine years later for looting a members’ fund. It covers Leo Melamed, who crossed Siberia as a child on a Japanese transit visa, answered a classified advertisement he took to be from a law firm, and thirty years later put currencies into a futures market. It covers the paperwork crisis that closed the New York exchange every Wednesday for half of 1968 and produced the depository that holds the certificates still; the end of fixed commissions on May Day in 1975 and London’s Big Bang in 1986; the German government bond contract that moved from a London trading floor to a Frankfurt screen in the 1990s; the two professors who noticed that dealers almost never quoted in odd eighths; the eleven days in 2006 in which a seat on a New York commodity exchange turned into about $12 million of stock; the $9 trillion of Lehman Brothers interest rate swaps that a London clearinghouse worked through in 2008; the flash crash of 2010, and the software release that cost Knight Capital more than $400 million in about forty-five minutes in 2012; the night in March 2022 when the London Metal Exchange suspended nickel trading and canceled a day of trades; and the prediction market that was fined for operating without a license, then bought a licensed exchange and clearinghouse, and then took a $1.6 billion investment from the owner of the New York Stock Exchange.
The program runs about an hour and a half. The written primer, a 223-page report, and its companion 53-slide deck are on the Latticework Substack under the title, Industry Primer: Exchanges & Financial Market Infrastructure.
Part Two of the podcast on the industry, the deep dive for professional investors, is available to members.
This audio program is published by MOI Global for educational purposes only. It is not investment advice, an offer, or a solicitation, and no security mentioned herein is recommended for purchase or sale. The publisher and contributors may hold positions in securities discussed. Figures are believed accurate as of the dates stated but are not warranted; listeners should verify all data against primary sources before relying on it. Nothing herein constitutes legal, tax, or accounting advice.
