Within Goldman, there have always been two theories about Thain’s role in the coup. The first is that Thain wanted Corzine out so he could eventually run the firm himself. The second is that Thain had been motivated by a sense of duty. He genuinely believed Corzine’s leadership had put Goldman at risk and took it upon himself to save Goldman from the CEO’s worst impulses.
The advantage of the second theory is that Thain had always been a loyal company man. “People liked him, respected him, thought he was a straight shooter,” says a former Goldman partner. “He was not particularly political.” The problem is that there’s little evidence Thain felt Corzine was endangering the firm. For example, Thain opposed the IPO as long as Corzine was in the picture, then personally embraced the offering once he’d left. It was hard to believe Thain hadn’t come to regard Corzine as a rival. (Thain declined to comment on the Goldman shake-up.)
Whatever the case, Thain would never get his shot at running the company. Paulson consolidated power so decisively that many partners wondered if they’d been right to assume it was Thain and Thornton, rather than Paulson, who had masterminded the coup. “In hindsight, I’ve asked myself whether Hank was more the architect … than people believed,” says the former partner. Thain says he turned down the NYSE job several times in 2003 before finally accepting it. Ironically, given the reasons for Thain’s break with Corzine, one of the factors that surely weighed on his mind was that Paulson didn’t look to be going anywhere. “I am the No. 2 person here,” Thain told The Wall Street Journal shortly after accepting the NYSE job. “This is my chance to be CEO.”
Despite the fact that brokers now place orders using handheld wireless devices, as opposed to the more traditional “slips of white paper,” the floor is still littered with debris. Discarded boxes of breath mints, soda-cracker wrappers, straw wrappers, candy-bar wrappers, crumpled-up paper bags. It’s as though people on the floor need evidence they’re still here. Several times, I saw a specialist jot something down on a small piece of paper only to ball it up and throw it on the floor for no apparent reason.
Watching the action on the floor brings to mind the 1973 movie Bang the Drum Slowly, about a fictional New York Yankees team. One of the movie’s recurring set pieces involves a card game called TEGWAR—“The Exciting Game Without Any Rules.” The joke is that there actually are rules. They’re just not evident to the uninitiated, which is why knowing them can earn you a lot of money.
The New York Stock Exchange can feel like one big game of TEGWAR. Two days before Thanksgiving, I spent some time with a specialist named Sean McCooey, who would narrate the various goings-on at his booth for me as they unfolded. McCooey is a trim, fiftyish guy with close-cropped silver hair that matches a smart silver suit. His family has been doing business on the floor of the exchange for generations.
At one point, McCooey paired up a broker looking to buy 68,000 shares of American Express with a broker looking to sell 80,000 shares. You never want to draw attention to a large order, McCooey explains, because other buyers and sellers will move the price on you. So, instead, both men confide their interest to McCooey, who in turn brings them together. Then, in order to round out the “print,” as it’s known, McCooey himself buys the remaining 12,000 shares. What’s in it for you, I ask? “If I don’t buy those 12,000 shares, he’ll look at me like, ‘Why didn’t you buy those shares?’ ” he says. Translation: There may be a time when McCooey needs to unload some shares, and this guy can return the favor.
Not long before the close of trading, McCooey picks up a dog-eared piece of laminated paper and starts writing on it in erasable marker. “Imbalances,” he says, then clips the paper to the side of one of his flat-screen monitors. It turns out McCooey has written down the number of shares of the stocks left to sell at the close. It’s a little like a sign you might see for discounted bagels late in the afternoon at Au Bon Pain. McCooey has clipped it to his monitor so the brokers will notice it as they walk by.
The long-term question facing the exchange is whether the floor can survive in some form. Ask Thain this question directly, and he will tell you the floor is crucial to the 90 percent of NYSE-listed stocks for which trading isn’t especially liquid—which is to say, when it’s hard to match buyers with sellers. The same is true when the market experiences turmoil—that is, when everyone is trying to buy at once, or everyone is trying to sell, and no one wants to take the other side of the trade. “We have many, many stocks that would trade terribly electronically,” he says. “And so as long as the specialists and brokers continue to add value, which they do, I think the floor is viable.”