American Consequences - January 2018


Information is the greatest commodity on Wall Street. It’s traded infinitely more than stocks and bonds. All investment decisions are made using it (I hope). Sure, there’s some gut instinct thrown in there for good measure. But overall, every buy and sell ticket has some information and analysis behind it. And the way in which information is being provided and consumed on Wall Street is ever-evolving.

By Turney Duff

Look no further than recent history to see how the use of technology has changed the flow of information in the financial industry. In the 1990s, the Internet was taking hold, and it brought with it both opportunity and fear. The world around Wall Street began to speed up. Trades that used to take five days were settled in three, and the ability to communicate and obtain information exploded. The advent of Internet technology and e-mail leveled the playing field for many investors. By 1999, AOL Instant Messenger (or “AIM”) was on almost every professional trader’s computer. It became the fastest way to pass information to a wide audience. And the technology was ahead of its time – texting, Facebook, and Twitter weren’t a thing yet. Its use was paramount if you wanted your finger on the market’s pulse. Trying to conduct business without AIM was like asking a surgeon to operate one-handed. If you

weren’t on AIM, you were two steps behind. Everyone was using it to collect and share information. For a brief period, Goldman Sachs forbade the use of AIM due to the impropriety risks. But that lasted for about a minute when the company saw how it was hurting commission totals. At first, the medium was an advantage for traders. But as AIM’s popularity increased, the playing field was leveled again. After almost a two-decade run, AIM was shut down for good on December 15, 2017. Over the last five to 10 years, we’ve seen a transition toward social media – Twitter in particular – and chat rooms as a major source of information for the financial markets.

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