tv Andrea Mitchell Reports MSNBC July 8, 2015 9:00am-10:01am PDT
how vulnerable are we to watching our financial markets get frozen like this? >> reporter: well, we're finding at least part of the financial market frozen today, chuck. thank you very much for letting me come on here. but i want to remind your viewers, this is not all the financial markets. the nasdaq is still trading, although they'll probably take some action because when one market is down, they don't want to go out with another market fully open. there are electronic markets that are trading here. what has happened and the little that we know chuck, is this. the new york stock exchange came out with a statement a couple of minutes ago saying there was a, quote, gateway connectivity issue with some of its servers. basically the pipes that lead from some computers to another appear to be having an issue, which has halted the trading in all new york stock exchange stocks that are traded on the floor. now, this is new. the reason i'm distracted here guys, is it looks like the wall street journal's website is also down right now. if you go to wsj.com, a colleague point this out to me
just off the air right before you guys came over to me wsj.com is also not working now. so apparently we've got united airlines, chuck, we've got the new york stock exchange and now one of the most read financial publications in the world appears to not have its website working. are they related? probably not. but the reality is this it's going to cause speculation. you know that as well as i do. >> well there's that and it could very well be so many people wanting to know what's going on the wall street journal can't handle the traffic. we can't eliminate that potential there. tell me this brian. how up to date is the software at the nyse? how often are they upgrading? that's the part of this i think that obviously most of us don't know. >> and i don't know the exact answer to that either chuck. i do know this the new york stock exchange is always tweaking their software. probably like our offices here at msnbc and cnbc are doing, all these add-ons. the nasdaq as i mentioned a few
minutes ago, a couple of years ago having a three-hour outage because of some computer systems issues here. if it's a connectivity gateway issue, i guess the plain english speak for that might be there's an issue with a router sending traffic one way or another. not sure on the software question but i do know this and tamron alluded to this before she came over to you, chuck, which is this. we're talking about moving tens of thousands if not hundreds of thousands of americans by plane around this country or being able to execute stock sell and buy orders on the leading capital market in the world. when those two things stop it really does call into question sort of the sanctity and the security of major corporate systems across america. >> let me bring in ron insana in here, a long-time cnbc anchor and now contributor on all of our platforms when it comes to the economy. ron, you brought this up first, i think. we're not saying there's a connection. >> no. >> not only that united
airlines the more we've been reporting on this this morning, there have been complaints that its system has been out of date for some time. that this is an old system. this was a system being held together by chewing gum, to use a bad metaphor. that is not the case with the nyse. >> reporter: no. this is a highly up to date technology that has been reworked over the last several years to become almost a completely electronic exchange chuck. the floor population, which was back in the late 1990s totaling as many as 3,000 people is down to about 400 to 500. so this is now an electronic routing system. we have multiple exchanges really that exist in parallel with the big board. the nickname for the new york stock exchange. in fact if you take a look at the new york stock exchange today versus where it was in let's say, the year 2000 they have about 14% market share in listed stocks stocks that trade publicly that are affiliated with the nyse compared to 85%
back at the start of this century. so it's a different exchange than it used to be. there are a variety of exchanges, electronic communications networks ecms as they're called that trade stocks. so the new york stock exchange is no longer the hub necessarily, but it is central in many ways to what goes on on wall street. and again, it is principally, as you're looking at my colleague on the floor trying to figure out what is going on it is still principally the centerpiece of stock trading in the united states, along with the nasdaq as brian was mentioning. and these outages have occurred from time to time. very different from the flash crash. we have seen technological or technology glitches create these systemwide outages. at some point they will in fact as brian suggested, have to harmonize trading. you don't want one market down and the other markets trading simultaneously, although having those other markets does give investors the ability to buy and sell away from the new york
stock exchange without being completely locked out on what has been a fairly rough day so far. >> i was just going to say there's huge global economic news that are potentially driving markets between what's going on in china and greece. brian, explain to viewers now, the dow is not the nyse. the dow industrial average is the combination of stocks that trade on different exchanges but explain why we're seeing movement. is that because nasdaq is open and because other exchanges are open? >> that's right. in fact to ron's point you have a couple of atlantic platformelectronic platforms. now there's about 20 markets out there, chuck so you've got some electronic trades happening. the nasdaq sort of rather bizarrely, does actually trade some new york stock exchange stocks. it's called tape a. it's kind of like if you booked on united but you went on an american plane because they had some kind of a deal that's the way it works there, so stocks are trading. the stocks that are not trading are the thousands that are listed on the floor of the new
york stock exchange. you can see in your view there these posts. you look above it and you see those digital boards that the camera is focusing in on. they have company names and tickers. those stocks on the floor are not going to trade. now, i do want to give you some new information. this morning there was a technical problem with new york stock exchange trading. it was very small and at 10:37 a.m. they sent out inote saying our problem with connectivity and the gateway has been resolved. so that was an hour before trading halted in all stocks. so it seems, chuck, that whatever problem the new york stock exchange had this morning, they thought they solved. they clearly did not. >> absolutely. all right, brian, thanks for that. let me bring in our justice correspondent, pete williams. obviously immediately when there are major interruptions in technology that happen one would assume homeland security
dni, things like that and the intelligence community is trying to figure out if this is an outside force. pete, what can you tell us? >> reporter: well i've talked to two federal officials about this and the early indication they say is they don't see an indication at this point of a cyber attack. they don't see any relationship between these two failures. but they're still looking at it. there just is no early indication that they're connected or the result of a cyber attack. it's still very early in this chuck, and it's going to take some time to go back. you know what happens when there's one of these events is the experts sort of in essence get a snapshot of what happened at the moment it happened and then try to trace back and, you know, sort of look at the videotape and the instant replays and see if they can see anomalous behavior that preceded it. you know all these systems are subject to attack all the time and so they have to see if there's something unusual,
something related. what was it that succeeded. what are the fingerprints of it. and so this takes some time. the instant readout is they don't see them as related, but obviously it's something they're looking into. >> who's on the front lines of this in the government? is this the fbi, is this homeland security? is this dni? who's on the front lines of this? >> reporter: frankly that is a huge issue because the lines are not well delineated. obviously it's something the nsa is watching the national security agency. it's something that private security firms are watching. it's something the fbi is watching. it's something that homeland is watching. there's lots of government agencies with a little piece of this and that's something of an issue. but everybody has got their own people that do this but the private sector is heavily involved in here too because we're not talking about government websites, we're talking about the private infrastructure, which points out, of course what people have been saying for well over a decade now, which is most of the
infrastructure in america that we depends on every day is not in government hands, it's in private hands. >> pete i appreciate that report. let me go quickly back to brian sullivan and ron insana. brian, do you know how quickly, when nyse is dealing with something like this are they looking for the government's help on this? are they reporting this? we're now seeing because of what's happened at sony and what happened at target and some of these other places are we seeing where some of these private enterprises are looking for the government's help to make sure this isn't cyber terrorism? >> i think they're going to have to do that chuck, because there's going to be a lot of answers that need to be given given the magnitude of this outage. they probably will look to everybody for help unless they can point to something specific and say aha, this is what went wrong. it was our fault or some software upgrade glitch we don't need to involve you. otherwise they'll have to notify the s.e.c. and other government organizations involved in the regulation of the capital
markets. what i thought was interesting to pete's point is that post-9/11 the new york stock exchange sort of dispersed its computer systems. obviously the nyse is located downtown on the famous wall street but the computer systems are out in new jersey and some other areas. so i guess for me the company would be and i'm answering it in the ether to nobody is we've got these other systems set up in case something happens. why are all the systems apparently down at one time. shouldn't some of these backup systems have kicked in? that's a question that i've got for maybe somebody else that's out there. >> and this is not just post post-9/11. after sandy there was concern that you cannot -- lower manhattan shouldn't webe left this vulnerable weatherwise. >> you've got computers in new jersey but one more thing, guys. chuck, this is really becoming a seminal day for the global capital markets because we were
down a couple hundred points because of what happened in china. china suspended trading in thousands of stocks early this morning, basically overnight and during the day in china time. many companies suspending the trading of their own stock because that market has lost 40% in one month. let me put it a different way. i'm sure you guys have talked about greece a lot. china's stock market has lost 15 times the entire greek gdp in just 30 days. you have major halting issues in china mostly related to the decline and now we have a halting issue on the nyse because of some computer problem. >> let me bring in ron insana. has brian pointed out earlier, the wall street journal's website is down. we're not sure if it's related or not but obviously on a huge financial market day is it because of traffic flooding. as you can see we have a screen shot here or is it something else. ron, the specter of china here
china has been behind a lot of the hacks that have been disruptive to us and here now their market was driving a lot of the global trading, a lot of the reason why the dow itself was down today. you can't help but ask yourself you know, some people are going to wonder if there's a connection there. >> reporter: that would be an incredibly mockachiavellian move. shanghai shares are down between 30% and 40% in three and a half weeks. and this hodgepodge of efforts that they undertook last night to try to halt the slide in the markets was one of the most amateurish efforts i've ever seen in 31 years of covering financial markets. we have systems in place if we want to halt trading and we impose circuit breakers not like what's happening at the new york stock exchange at this moment we have a very kind of long developed system of how to slow or put the brakes on a
serious market decline that go back to the crash of 1987 and in fact even farther back really to what happened in 1929. china on the one hand allowed companies to request trading halts in their own stocks. company executives were going out and saying listen we don't want our stock to trade today so 1400 different companies. about 40% of the value of the chinese market did not trade last night. then they raised what they called margin requirements on individual investors who had been buying stocks aggressively with borrowed money. that just forces them to sell more so they sell in hong kong instead of china. then they're offering liquidity and providing more money to the system to keep it moving fluidly. it was the most conflicted set of efforts i've ever seen in my career. >> is that a reminder ron, that this is a very immature capital market essentially? >> reporter: yeah but they're pretending not to be chuck. this is the part i think particularly with people here at home who keep being sold on the idea that you need to be in the
chinese market or have exposure to china. china is still acting like an emerging market not like a developed market. and it is largely a domestic market over the last several months. millions of chinese have been buying stock with borrowed money, 90 million individuals buying stocks and they're witnessing -- listen if this were happening here we would call it a crash. if china is trying to create some sort of sleight of hand and divert attention from what's going on there as you suggested or asked -- >> i want to be careful of that. i'm just -- you're already seeing that kind of traffic on social media. >> reporter: cyber is going on every day in every company in the united states as i said earlier to tamron. i've spoken to cfos of fortune 500 companies and they see bad actors in their systems every day. that's bad guys who want to steal money and people who just want to disrupt the system. >> you can go to our own i.t. folks here at nbc universal. >> reporter: this is happening at the government too, right.
>> speaking of the government. let me go to the white house. chris jansing, our senior white house correspondent. chris, this is one of those occasions where my guess is the white house is watching and observing, but what actions are the government taking and what actions are they thinking about? >> reporter: well you know very well, chuck, first of all, in terms of right this second they're working to get something to us in advance potentially of the briefing which is scheduled for 1:00. given everything that's going on i'm sure will get pushed back a little bit as it often does. but you know what the bigger picture is and that is that the president has been calling for cyber security. he talked about it at the g-7 at some length about it as a national emergency. and there are parts of this. one part of it is the concern about bad actors that you were just talking about and all the breaches that have happened here, even with federal employees, the hack that affected as many as four million federal employees and that pushed the call again for congress to take some action. the second part of it which the
president has also talked about, particularly in terms of the federal government but also obviously affects many of the systems in the corporate world is that they are dealing with a lot of very old systems. we don't know what has happened here yet, but there have been pushes for the last three years for congress to do something about cyber security and it's always gotten held up. held up sometimes because of other things that they wanted to attach it and privacy concerns about how the federal government should work together with the private sector. so that's something that is going to be raised once again here, chuck. >> and also as pete williams pointed out, who's in charge of this. in fact let me go to the normal anchor and host of this show andrea mitchell who has been on duty in vienna as we wait to see if there is a deal with iran. andrea, you reported out the china hack and what happened with the federal government a few weeks ago, and again this is -- nobody is saying this is a hack, but now the way we treat
these, i think the assumption is you've got to rule out a hack before you figure out what's going on. >> reporter: i think that's exactly right, chuck. look, the government has been very careful about not accusing china publicly except for the head of national intelligence at an intelligence conference a week and a half ago in washington. he said, yeah china did it in effect and he said that he wishes that we were as good as china at attacking their government. he said if we could do it we would. presumably that was tongue in cheek, but the fact is that both sides do it. look, we are here covering the iran talks and one of the reasons why iran was so vulnerable and what slowed down their nuclear development we believe is that israel and the united states with u.s. help hacked the iran nuclear program and inserted you know a computer worm into its centrifuge development slowing down those centrifuges.
all countries do that. chinese hacking into the u.s. government has so crippled the hiring of intelligence officials that a couple of days ago clapper had to put out a statement saying that they went to paper, paper forms, rather than the online application form for background checks for everyone with a security level, security level and higher so this is a major deal that the u.s. government has been confronting, and their systems are not as sophisticated, i can tell you, as the nyse. they are in the intelligence community, but not governmentwide on procurement because the stock exchange after 9/11 completely revamped and updated as part of -- as part of moving out of lower manhattan and moving a lot of those facilities, as ron was just suggesting to new jersey and brian sullivan. that is part of the new security. and that also goes of course for the federal reserve and all the rest of the financial networks. >> let me go back to chris jansing. to me this is a central question
for the white house because here today we have had a major airline, one of the three largest airlines totally shut down for a time. and the most important financial market in the world shut down right now. and there isn't a lot of confidence in our ability to deal with cyber terrorism. pete williams said when i asked him who's -- who takes the lead when something like this happens. there wasn't a good answer. at what point does this become -- the president has talked about cyber terrorism. at what point does he say okay guys, let's crack down. we've got a cyber issue. some of it is terrorism related, some of it is about hacking some is about infrastructure but there seems to be something here that's missing as far as the federal government is concerned. >> reporter: yeah, and if you talk to the white house about this issue, they will point to the cyber security summit that they held earlier this year in the silicon valley. they say that this is something that the white house and that the president in particular has been doing a big push on. that there's a working
relationship between those experts in the private sector and the federal government. but, you know you have a bill that gets put forward both you know pushed by the white house, pushed by members of congress and you can't get basic things accomplished. and so it's going to be interesting to hear what we're able to get from the briefing today. but there's no doubt about it. when you look at the three things that you're talking about today that happened and you look at the economic impact it becomes an even bigger question about what does that do to people's sense of security people's own sense of here we are in a recovering economy still and does it make people -- how much more nervous does it make it. what does it do to spending. the ripple effects have yet to be seen and i'll leave that to the cnbc folks. but certainly is something that you have to raise and be concerned about if you're the president of the united states and you're trying to keep the economy moving. >> brian sullivan the financial impact of something like this obviously i think pretty hard to
measure. and in fact if anything maybe money is being saved today because more people wanting to be selling off because of the news in china so there's no way to speculate i think the impact of the shutdown market. but what does it do to traders? what does it do to the psyche? >> well the basis of the capital market system has to be confidence. i think we can all agree that wall street has had a bit of a consumer confidence problem now for a number of years. we have this thing called the flash crash four years ago where the market fell about 900 points because of bad trades that were made. the nasdaq down in 2013 and now this. you need to have confidence. you're going to give somebody your money, you need to have confidence that their systems are going to work. but it's bigger than that. i think to andrea's point, if you're going to get to a tin tube and take to the airs 40,000 feet up you need to make sure that the computer systems of any airline are working. i understand that united's issues were simply with the
ticketing part and booking part of the story. and i don't want to have a particularly orwellian view but now that our lives are almost totally controlled by computers, we need to have confidence in those systems. google for example, they want everybody in a driverless car in ten years. if we are not convinced that those systems are going to be safe and secure one does wonder, by the way, what that will do to consumer confidence. i just on a personal note i just hit a button on my computer and i got the blue screen of death. i just wanted to point that out. so i don't have confidence in one system right here. >> well, let's not hope this moved into nbc universal or any of our issues as well. ron insana do this larger point of i have no doubt there are some people watching us and saying you know what, we are tying our lives too much to digital -- to the digital age. we're too vulnerable and we can't move if somehow the power
went out and we couldn't use our phone, we couldn't make transactions, we couldn't use an atm machine. it is, to the alarmist out there, a day like today is a bit scary. grounded airline, biggest market in the world shut down. >> reporter: yeah. chuck, i agree. listen i am in that regard -- i would love to see a greater floor presence at the new york stock exchange because during moments like this, one of the beauties of the specialist system that existed for a couple hundred years where there were individuals making markets in stocks is they were responsible for making those markets. if they did shut down the stock they had a good reason. there was an orderly process by which it was shut and then reopened and this recreates a disorderly environment. i was on a flight coming back a couple of weeks ago from charleston, south carolina and we turned andersen minutes-- around
17 minutes in the flight which did not engender a lot of confidence in the folks on that express jet. we don't know whether it was a computer issue and germane to that one plane. but when these things happen it does make you wonder whether or not we are indeed in financial terms where our entire financial system now has effectively gone digital. and in real terms in life whether we're too dependent on the technology that we've created and whether some of it is so complex that we ourselves can't necessarily understand the implications of what we created. when you talk about the people who are kind of the end of the worlders and the doom and gloomers, they talk about systems, even elon musk and others suggesting that we can create artificial intelligence that is dangerous to us. this is where those questions start to come in. listen, i don't want to put today's activity into that category and united and the new york stock exchange may be entirely unrelated and solely just technological glitches that occurred but it does raise questions about our dependence
on technology and what happens. you can go back to an old "twilight zone" episode where lights go out in the neighborhood and people lose their minds because everything that they're accustomed to having at their fingertips suddenly disappears. that creates uncertainty and fear in a variety of environments. >> let me bring in bill griffeth here from cnbc. bill, what are you seeing and the impact on traders. who's doing the trading right now? i mean is this about big hedge funds that are having to decide okay maybe we need to do something differently today or we're going to pull back. what is going to be the impact? >> well let me put something in perspective here chuck. yes, once upon a time the new york stock exchange was the only place where you could trade stocks but that's by far no longer the case anymore. let me be clear. stocks are still trading right now. >> no, we're watching the ticker on screen right next to your
head showing movement. >> the glitch we're talking about is only at the new york stock exchange. but the new york stock exchange trading floor is only one trading platform that exists today. there are other platforms owned by the new york stock exchange that are all electronic. those are still trading right now. the nasdaq market system it's up and running still at this point and it's trading some new york stock exchange traded stocks as well. the fact that it's the new york stock exchange trading floor that's having a glitch that's unusual. they're still trying to figure that out. what that means is you have a little less what we call liquidity in the market right now. in other words not as many shares are trading. so when you ask about those hedge funds and the decisions they're having to make maybe they trade a little less today. maybe they divert their trading where they would normally put it at the new york stock exchange trading floor, go to some of the other trading platforms. but they are still able to trade stocks today. so i just want to be clear about that. the headline makes it sound
difficult. >> ominous. >> which it is but it's not cataclysmic at this point. >> what is the percentage? back when i was growing up the nyse was everything. is it 50% of publicly traded companies in america these days? what is the nyse in comparison to all the other markets now? >> i don't know for the whole market, but i do know that within all of the trading platforms owned by this company that runs the new york stock exchange the new york stock exchange trading floor itself is only 25% of those platforms. that does not include the nasdaq. so from that perspective the new york stock exchange does not play as big a role as it used to because of the proliferation of these electronic trading platforms that exist out there, some of which are still related to the new york stock exchange and many of which have nothing to do with the big board. >> big griff etteith, i've got to let
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what's in your wallet? we are back covering breaking news. the new york stock exchange the largest stock exchange in this country, is right now got halted trading. we've got some new information. it's actually good news in this respect, brian sullivan who's still with me who works for cnbc, in that the nyse says this does not appear to be anything from the outside but an internal problem. what more can you tell us brian? >> that would be good news chuck, if that is indeed the case and that is new information coming into your newsroom as well. listen, you guys have talked extensively about was this some sort of an external threat. is this an attack on the new york stock exchange. did united airlines whose computer systems went down for a few hours earlier today, suffer the same kind of thing. the one thing that we have to
talk about with the new york stock exchange, and i think bill griffeth alluded to this a couple of minutes ago, we don't know how big of a deal this is. yes, all stocks have stopped so it seems like a big deal but remember the new york stock exchange will halt trading whenever everybody does not have access to the market. they want to make sure that if somebody over here wants to buy or sell a stock, that they can do it if this person can't. so they want to make sure that everybody has equal access to the same buy and sell orders. if parts of the market get cut off, they will oftentimes say okay, guys we're going to shut everything down just for a little bit to make sure that all players have an equal playing field when it comes to buy and sell orders. chuck, to your point about this being perhaps an internal thing would be indeed good news at least from the macro cyber security aspect that you have talked so much about already. >> brian, let me ask you this. was there thoughts this morning given to what china was doing in its panic last night, the china government and what it was
doing, before any of this happened, was there thoughts this morning of slowing trading down with some of the american markets because of concern of sort of a flooding to sell or overreaction to what's going on in china? >> no they're not going to do that and i'll tell you why. even if somebody may have thought that chuck, here's the thing. there are so many different markets out there. bill griffeth referred to this. there is the new york stock exchange. there are the electronic trading platforms on top of the nyse. there are these things called dark pools you guys may have talked about over the last couple of years. michael lewis wrote about them two years ago. you've got the nasdaq. so all these different trading systems are out there right now. so if there was some thought of hey, let's do this or let's do that, it would have to be a coordinated effort between many different groups many of whom have while albeit the same goals, not necessarily are the best competitors. some of them are pretty cutthroat with each other so i'm not sure that would be able to happen. guys, we do want to reiterate that trading is indeed happening. that is why you see the dow component moving because those
dow stocks many of them are trading either, a, on an atlantic electronic platform or, b, through the nasdaq. that's where you're still seeing live trading. again, look at the video of the new york stock exchange right there, guys. >> i know. >> it's already slowed down much over the last couple of years. it used to be crowded with women and men. now there are not -- far 2350ufewer traders. but for those of us who live and breathe financial markets, that is a tough scene to watch. >> i want to reiterate this. you said that the new york stock exchange put in some provisions when there's something like this so that there isn't a whole bunch of trades in queue that all of a sudden the switch gets turned back on and it has this unusual impact on the market. they shut down open trades. they're not going to allow them. explain that. >> thinking about it i want to
use a gummy bear analogy. do you know those gummy bear dispensers. i have an 11-year-old daughter. when the gummy bears fill up and you do this they all fill into the bag. if there's too many in there, maybe they go all over the place. all i can think about is buying candy for my daughter. the new york stock exchange doesn't want to have that big backup. they don't want that buildup because they don't necessarily know what we call in wall street parlance the order flow. how many gummy bears are sort of -- i'm not trying to make light of it but it's the metaphor that i could come up with off the top of my head so they're killing all the open orders. if you're out there and put in an order to buy 50 shares of ibm or something like this that order will be wiped away. you'll get a notice from are whatever account saying this order has been cancelled. if you were trying to sell stock summary summarily, you may not be able to do that if it was one of those new york floor listed stocks. but remember a stock is sort of
a fungible item perhaps like those gummy bears. a share of ibm is the same here as it is over there so you don't have to buy or sell a stock that is on the floor of the nyse. you could live in some computer server. i think to our earlier discussion, chuck, not only is business virtual, but i think we can all agree that currency and money is almost entirely virtual, which makes it susceptible to this type of stuff. >> and very quickly, you are -- obviously the markets were expecting a big sell-off today because of china. is the sell-off going to be slowed down on sped up >> if you know that chuck, please let me know. >> exactly. there are a lot of guys out there speculating on that probably right now. >> i will say this. i heard andrea mitchell make the point that the recovery is still fragile. the u.s. economy has done reasonably well. unemployment 5.5%. we are expecting the federal reserve to give their meeting minutes, why they made the decision at the last meeting that they did, that comes out at
2:00 eastern time today. that was going to be the headline of my show but obviously i think we know what the main topic is going to be. i think we can say this though, chuck, with accuracy. with what's happened in china, china has lost over $3 trillion worth of market cap in 30 days chuck. that is more than was lost in the entire dotcom bubble bursting 15 years ago. we know the problems with greece. and i think given all these global issues the fact that the dow is down what 200 points on a day where china halted trading in 1400 stocks says a lot about the resiliency of the u.s. consumer, our capital markets and perhaps the global optimism that others have in us. it will have to wait and see whether or not this type of thing does maybe dent that confidence just a little bit. >> the confidence and stability of the american markets versus everybody else. all right, brian sullivan thank you. stick around. let me read the official statement that the new york stock exchange just put out. the issue we are experiencing is
an internal technical issue and is not the result of a cyber breach. we chose to suspend trading on nyse to avoid problems arising from our technical issue. nyse listed securities continue to trade unaffected on other market centers. when we come back we'll have more on this. it's now -- i think we're getting close to an hour that the nyse has been shut down the trading floor has been shut down there. obviously some parts of it are still open. we've got that donald trump exclusive interview that's going to be coming up. a lot of breaking news. let's sneak in a quick break and we'll be right back. i've go t the solution. well, we have 30 years of customer records. our cloud can keep them safe and accessible anywhere. my drivers don't have time to fill out forms. tablets. keep them all digital. we're looking to double our deliveries. our fleet apps will find the fastest route. oh, and your boysenberyy apple scones smell about done. ahh, you're good. i like to bake. with at&t get up to $400 dollars in total savings on tools to manage your business.
expected wait time: 55 minutes. vo: in the nation, we know how it feels when you aren't treated like a priority. we'll take care of it. we put members first. join the nation. thank you. ♪ nationwide is on your side ♪ still tracking the breaking news out of wall street. the new york stock exchange, the floor itself shut down. some trading is taking place on other markets. the fbi has now put out a statement. the new york stock exchange says it's an internal glitch. the fbi has its own statement out that they have reached out to the nyse offered our assistance. they have said it is a technical
glitch. no further law enforcement action is needed at this time. the fbi will continue to monitor the situation. let me bring in pete williams our justice correspondent. pete, you've also reported earlier no connection between united and nyse just could be a bad coincidence and a reminder of our technical vulnerabilities. >> reporter: well, let's review what we know. united airlines says it was not a cyber attack. they say it was a router that failed this morning that had several applications running on it and that they don't believe it was the result of a cyber attack. the stock exchange itself has said that it was an internal technical issue, not the result of a cyber attack so that therefore, they suspended trading. three separate federal law enforcement agencies that have looked at this say they don't see any sign of a cyber attack. and one independent commercial computer monitoring firm that we've talked to says it sees no signs of a cyber intrusion. what does that tell you? i think all the arrows are point in the same direction at this
point, that it doesn't look like it was anything other than a nasty coincidence. >> and this is happening today and highlighting this issue of is it infrastructure. we know a lot of people have been clamoring on capitol hill between cyber security concerns and infrastructure concerns. it's hard to believe that the new york stock exchange doesn't use the most up to date software. it doesn't feel like that would be pan infrastructure issue. united, on the other hand, we've got plenty of reporting that indicates that could be an infrastructure issue. >> reporter: well, they've both had their computer problems in the past. this is not the first time it's happened to an airline and it's not the first time it's happened to united. you know, we live in a complicated world with all these interrelated systems and these things do fail from time to time. components fail software fails. it's not to say there isn't a big worry about cyber and the same questions we were asking is, well gee, is this all
happening at once. the federal government was asking itself too. but the bottom line is how many minutes into this now, it doesn't look like it's a cyber attack. it doesn't look like these two failures are anything other than a very unhappy coincidence. >> let me go to chris jansing over at the white house. she got a little bit more new information of the what have you got, chris? >> reporter: the president has been briefed on this situation with the new york stock exchange and obviously the treasury department is keeping an eye on it as well not just them but also the s.e.c. so this is obviously something that the president and his team is watching very closely. now, this statement was put out just about simultaneously at the time that we learned that this doesn't appear to be an external attack so obviously that changes the calculus here as well but i don't think it changes the conversation very much. when you have something like this that brings about this sort of heightened concern, heightened anxiety and raises the question that you just talked about which is investment not just in cyber security but
also in infrastructure what does that mean here for the federal government and for the infighting that's been going on in congress about some cyber security bills. it's also worth noting that the president among the executive orders that he has signed over the last year one of them involved cyber security. but again, we'll hear more at the briefing that's scheduled to start about 15 minutes from now, but the president has been briefed on all this and is being kept up to date. >> let me go to andrea mitchell. andrea, the larger issue here the alphabet soup of agencies that have some -- that touch some issues of cyber security then there is infrastructure issues that aren't necessarily tied to intelligence agencies the government plays a very aggressive role on the cyber security front but less so on the infrastructure front. explain. >> reporter: exactly right. and in fact the fbi director james comey, was testifying at a hearing today and he was saying
that encryption encryption that private businesses need is hurting the fbi and law enforcement abilities to go after isis because isis is managing to get around -- they're using encryption in other words, on twitter and in other ways on social media to recruit and getting around the ability of our intelligence agencies to penetrate the encryption of isis. this is commonly available encryption, that corporate america wants but that is actually hurting law enforcement. so basically law enforcement is saying that the privacy concerns and the encryption concerns that private citizens have and that corporations have are actually hurting their ability to go after terrorists. that said, the senate intelligence committee, democrats had long ago put out a bill and that bill has been sitting there for months and months at the hill. i think at the white house briefing chris jansing will hear a lot from the white house about the fact that there has been a complete blockage of action on
the hill on legislation that is all but complete. >> let me go back to pete. i know that he's been reporting on this. this sort of alphabet soup aspect of this of who in the government -- which agency is point when it comes to this issue of just making sure that the country's technology is working correctly versus the security aspect. there really isn't one agency or one entity that is the point. >> reporter: perfectly fair question. back to square one for a moment. there's no -- there doesn't seem to be any cyber security aspect to what's happened here today. these are internal equipment or software problems at these two institutions, so again, it's not a cyber security issue but you've raised this question about infrastructure just like bridges crumble and roads buckle routers fail and software glitches. there's nothing much the government can do about that to insist that the private sector
has best practices. they can't even as andrea says get a bill passed through congress to require what information the companies and the government will trade with each other when something like this happens. what we have now is largely a cooperative effort. because congress hasn't yet, despite the government's demand for it hasn't done anything about that yet. but there's nothing the government can do to tell united to have better routers or to tell the new york stock exchange not to have these problems. chuck, if i can, i just want to talk about what andrea mentioned here, which is the fbi director's -- do we have a moment for this? >> yes. actually the fbi director today is concerned that corporate america is too encrypted. >> reporter: right. it's totally different than what we saw here today. what the fbi is concerned about is that isis sending its message through twitter largely, trying to appeal to people in the western world, especially the
u.s. striking up a conversation and then immediately saying okay, let's get off twitter and let's get to what'ssome other program that is end-to-end encrypted. the program is scrambled from the time it leaves the sender's device until it's received by the receiver's device and there's no way for the fbi to look in between and see what they're saying. comey said we're trying to find needles in a huge hay stack that are becoming invisible. so the question for congress is is there some way for the companies that control this to give us a way in when we have a court order, when we have a judge's order that says let the fbi wire tap this. the concern he has right now is that the companies say i'm sorry, even if you come to us with a court order, we've designed the system so we can't do that and comey wants some answer to that problem. >> and the customer demand is for more protection not less.
>> reporter: yes. >> so corporate america has to in this case an apple or something, they're responding to customers' demands on that. pete williams i know you want to do more reporting. before i lose brian sullivan you've got your own network to go back to work on. is there any estimate yet of when they think they can resume trading? >> no estimate yet, chuck. in fact a comment from the s.e.c. securities and exchange commission, just coming into cnbc moments ago saying no comment at this time. obviously the s.e.c. is aware of this. they are monitoring this as well. and to go back to pete's point, just a couple of final points before i hop out of here for my own show which is this. number one it's annoying if you can't access your netflix or your amazon. but if you can't make a flight maybe for a job interview, you're trying to get to a funeral, you're trying to macake a sales call these are real problems costing people time and money in their lives. this is the capital market. it is supposed to be the most secure and stable capital market in the world. the final comment i'll make is
this. other the last ten years the new york stock exchange has suffered a lot of job losses. a lot of men and women who worked on the floor. i've been going there for more than 15 years. they have lost their job as electronics have invaded the capital markets. and keeping that floor open always part of the story had been this. because we had the women and men there, we've got that last fail-safe. as we're seeing from our video, when the computer system has now gone down the men and women have also been unable to do their job as well so i think this is another blow not only for confidence in sort of systems, but confidence perhaps in part of the financial system down on the corner of wall and broad. hopefully the new york stock exchange can get this thing up and running. i've got to get up and running for day 2:00 show on cnbc thank you. >> you've been very helpful to me. let me read that statement from the s.e.c. the chair is mary jo white. we are in contact with nyse and closely monitoring the situation and trading of nyse listed stocks. while the new york stock exchange is working to resolve
the situation, the nyse and nyse market stocks continue to trade normally through other trading venues. the other big technical glitch of the day has to do with air travel. united airlines has presumed operations after a computer glitch grounded some 3500 flights this morning. we have new information from united airlines. they are blaming a router issue for the computer problems. thousands of passengers are still feeling the ripple effects that are stuck waiting at airports delays snowballing throughout the day and no place is probably feeling it more than where my old pal, john yang, is at at chicago's o'hare airport. o'hare always a madhouse, must be more maddening today, john. >> reporter: it is. the lines are picking up. this is sort of you're seeing it looking like the midday crunch here. this is sort of the second ripple effect. you have the flights this morning that were delayed and this is the time when those flights that were delayed would be arriving to make up new
flights going out of here. you're seeing delays up on the board running around two hours because the most common comment on the departure board here is awaiting aircraft. they're waiting for flights to come in to make this up. the lines are building here on the concourses. i just took a little tour of the gates here. the customer service lines are building. and you talked about some of the real life effects of all of this. i've been talking to people who are going to miss meetings business meetings wiped out, family vacations will be delayed in some cases, although the people are saying that they're happy that they'll be getting this eventually. but it will be a little bit delayed. and this is going to go on through the afternoon and into the evening. as flights are delayed, connections missed all because of this computer glitch at united airlines. chuck. >> i want to follow up on this
john with united. a producer was telling me earlier that there have been united employees warning about sort of an issue here with their computer system. that it has been sort of a little out of date. >> reporter: yeah, i have to tell you i'm a frequent traveler on united. i come through this very lobby quite a bit. and i have had united agents talking about ever since they made the switchover the united/continental merger there were a lot of problems with merging that computer system and they have been saying that they sort of update this they try to update it as it goes along and they have had problems. this is not the first time this sort of thing has happened. i can remember within the last month or so being delayed because there was a problem with the customer service computers connecting to the reservation system, sort of delaying being
checked in and that sort of thing. i mean this is all sort of word of mouth, this is all hearsay, but it is a topic of conversation among united employees. >> and that's the part of this that is going to have a lot of folks digging into this a little bit more. john yang at o'hare airport. john, thanks very much. by the way, we do have good technology news to report. "the wall street journal" web page is back up. ron, today is a reminder of just how connected our lives are and how quickly we can be put at a stand still physically and financially. >> reporter: yeah it's become a very large issue. even though today has been deemed not to be a cyber security issue among the three institutions that experienced technology outages and even though people are looking deeper into that it does tell us just
how reliant we've become. when i started in the financial business back in 1984 there were thousands of people on the floor of the new york stock exchange. the chicago mercantile exchanges just this week stopped floor trading in exchange for computerized activity. so that presence of human beings that was on the floor in the financial community over the last couple hundred years is almost virtually gone at this point. and there are those days like today when you kind of wish that there were humans dominating the floor who could make orderly markets and who could in fact if they needed to halt trading for legitimate reasons and reopen it in an orderly fashion. these events become somewhat disorderly. as as we have spoken earlier in the day, with the proliferation of exchanges, the new york stock exchange now has anywhere between 14% and 25% market share of the listed stocks that it does business in and the rest are done on electronic
communications networks. the dow as you mentioned continued to move chuck. that's because several years ago dow jones and company decided to put several nasdaq stocks into the dow which were never there before, so microsoft, intel, now apple, they're in there. so the dow will move as those stocks move in unrelated fashion to what's going on at the new york stock exchange. >> do you see the volume though? >> reporter: we're hearing that the volume is curtailed. as long as there's no trading on the floor of the new york stock exchange, there is no volume. the volume is traded away as they like to say at the big board to these electronic communications networks these large market-making operations that exist entirely separately from the new york stock exchange. or as bill pointed out earlier partially owned by the big board as well. so the reliance on technology can be disturbing. it is something we have to live with and it is an infrastructure requirement in the united states that we bolster up our electronic grid, the technology that we use to affect all of this type of activity.
>> all right, ron insana you've been a great partner for me this hour. i appreciate it. as we go to break, we're still waiting on the new york stock exchange to fully get back up to speed. a technical glitch is what they say, but there's no timetable on when they'll be back up and running. united airlines is back up and running but obviously now experiencing a lot of delays on that front. we'll have a lot more on this as well. as i promised you early, we still have that donald trump exclusive. we'll be back, stay with us right after this. brav esrm. it's full of cool stuff, like my second in command... and my trusty bow. and free of stuff i don't like. and in my castle we only eat chex cereal. chex cereal. it's full of delicious crunchability. no artificial flavors, and it's gluten-free. and that's something even my brother ... sister can understand. mom, brian threw a ball in the house! congratulations. you're down with crestor. yes!
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