Collaborate or Perish!: Reaching Across Boundaries in a Networked World by William Bratton & Zachary Tumin

Author:William Bratton & Zachary Tumin [Bratton, William & Tumin, Zachary]
Language: eng
Format: epub
Tags: Business & Economics, Decision-Making & Problem Solving, Management
ISBN: 9780307592422
Publisher: Crown Business
Published: 2012-01-17T00:00:00+00:00

WAITING FOR VERIZON

On Tuesday, September 11, 2001, when the World Trade Center in New York was destroyed by a terrorist attack, the New York Stock Exchange closed. This massive, proven, beautifully architected platform stayed dark for four straight trading days, longer than at any time since the Great Depression.

The attack exposed a hidden risk—not from terrorists, but from beneath the platform itself: telecommunications. Although ready to trade, no traders could buy or sell via the NYSE’s platform. Telecom service to and from the platform had been destroyed underneath the collapsing Twin Towers. The crisis made collaborating to fix it not only attractive but imperative.

The 9/11 attacks had decimated lower Manhattan. Even so, by Wednesday, September 12, most traders were ready to get the financial markets up and running. Like the New York Stock Exchange (NYSE) itself, their primary trading floors were mostly unscathed, even those just blocks away from Ground Zero. Others, more directly affected, had quickly switched to backup sites.

By Thursday, September 13, the Federal Reserve was eager to get trading going, to pump liquidity into the markets and keep the global economy humming.

“If the market can trade,” Jill Considine, the head of the Depository Trust & Clearing Corporation (DTCC), told the Fed, “we will clear and settle.” Before the attack, DTCC processed more than twelve million trades daily for all the major exchanges—trades valued at $105 trillion each year. In New York and London, DTCC staff had been hard at work through Wednesday night clearing and settling the backlog from Tuesday. By Thursday DTCC, like many in the business, was good to go.

There was only one problem: 90 percent of the lines running from traders to the major exchange floors ran over Verizon. And most of them were down. Telecom was out.

On that clear September morning when the world changed, giant concrete slabs tumbled from the disintegrating Twin Towers of the World Trade Center and slammed into the Verizon Central Office exchange (CO) at 140 West Street, crushing cables running from the CO into and out of Wall Street. Steel girders free-falling dozens of stories sliced five stories deep into Verizon’s basement vaults, shattering water mains and flooding the CO’s basement. Power was lost. No one could even find the manholes, let alone start repairs: the concrete slabs and steel girders had jammed against the building, creating an impassable set of ruins.

The NYSE lost a thousand lines instantly. Throughout Lower Manhattan, the toll to telecom was huge: two hundred thousand voice lines, one hundred thousand business lines, and 4.5 million data circuits. Ten cellular towers had been destroyed.

Without their telecom, traders from firms like Goldman Sachs, Lehman Brothers, Merrill Lynch, Morgan Stanley, and Salomon Smith Barney couldn’t connect to the NYSE, and via the NYSE, buy and sell securities. Wall Street was disconnected and the global economy was on hold.

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