Thursday, February 25, 2010
Was hanging w/the guys at Rabbitwerks in San Francisco and we were able to shoot photos of the Singapore International Monetary Exchange (SIMEX) hand signals. It'll take a few weeks for us to edit and match text (got some other projects taking precedent) to each handsignal but they are very, very comprehensive that I learned from a longtime SIMEX trader during my trip to Singapore earlier in the year.
Posted by Ryan at 8:50 PM
Wednesday, February 24, 2010
A 'saying' that I often heard was that "there are old traders and there are bold traders but there are no old, bold traders." It took years to fully understand it and in general it's true except for very rare exceptions. I thought of this recently when I was rereading articles on the original King of the Wheat Pit, Benjamin Hutchinson who was commonly referred to as "Old Hutch" on the trading floor in the late 1800s. Perhaps the greatest pit trading book, The Pit by Frank Norris was largely based upon "Old Hutch." For a read on a much different era, I submit the following New York Times articles from that era, all linked in pdf files:
THE GREAT SPECULATOR FAILS.; MR. HUTCHINSON LEAVES CHICAGO AND HIS TRADES CLOSED OUT.
April 30, 1891, Wednesday
HAVE NOT FOUND "OLD HUTCH."; EXCITEMENT OVER HIS DISAPPEARANCE SUBSIDED ON THE BOARD.
May 1, 1891, Wednesday
"OLD HUTCH" HAS HAD HIS DAY; THE FAMOUS GRAIN SPECULATOR COMPLETELY RUINED.
August 28, 1893, Wednesday
B.P. HUTCHINSON DEAD.; Passed Away at Lake Geneva, Wis. -- Once Leading Grain Speculator in This Country.
March 17, 1899, Wednesday
and somewhat related, an article which ties some of the grain corner stories together:
Battle of Giants for Wheat Supremacy.; " Big Jim" Patten, the Latest Figure in Grain Speculation, and the Men Who Oppose Him.
October 27, 1907, Sunday
Posted by Ryan at 10:02 PM
Wednesday, February 10, 2010
I always felt there were two great mysteries of trading pit memorabilia and now experience tremendous relief at uncovering both, first there was the excellent Charlie D video and just as intriguing was what happened to the trading jackets of Barings Bank from the SIMEX trading pits.
For years I wondered and every attempt to discover the fate of the trading jackets always came up short. Inquiries to various trading floor staff I used to put my SIMEX orders through were fruitless as even the former Barings workers claimed that they no longer had their jackets. Recently I learned there is a good reason why because after the bankruptcy was announced, the jackets were left hanging in the coat room, eventually got collected and then were shipped to London w/other Barings items which the liquidators held onto for over a decade before being dealt with.
In April 2007 Nick Leeson's personal jacket was first offered briefly on ebay by the bankruptcy liquidators KPMG but the top bid of 16,100 GBP fell short of it's reserve price and was subsequently sold to Paul Taylor, a London investment manager for 21,000 GBP. Although that is a quite rich for my interest, I was traveling and didn't realize the jacket not only surfaced but changed hands until after it was finalized. Upon inquiry, I was told that there were no further jackets available and thought that was that.
Later in 2007, another jacket surfaced at a charity event titled the Distressed Investing Dinner and that Barings jacket was subsequently auctioned for 4,000 GBP.
It was fate however, that a London based collector of financial history contacted me recently to share his wonderful acquisition of the remaining six Barings jackets. And by fate, I mean that he wrote me while I was on vacation in Singapore and my hotel view was overlooking both Leeson's former office building (Ocean Towers) and also the site of where the SIMEX floor once stood.
And just past the former SIMEX floor is the infamous Harry's on Boat Quay which Leeson used to frequent. I myself am partial to Penny Black which is the pub next door.
But anyways back to the jackets....
The collector I corresponded with is a wonderful steward of financial history and was kind enough to share some photos below. He also opened the possibility of a museum or exhibition being able to borrow a jacket for display. If any entity would like to enquire about the potential, either post in the comments section or email tradingpithistory 'at' gmail.com and I'll be certain to forward on the request. I do not believe that any further Barings jackets exist beyond the eight which I described above but if there are any further Barings jackets, I'd love to hear of their certified history.
Baring's jackets are easily some of the most sought after and rare pieces of trading pit history and with all the recent scandals such as REFCO or Lehman, hedge fund implosions or other derivatives disasters such as Metallgesellschaft, Barings stands apart by having it's scandal begun and ended on the trading floor.
This blog will continue to revisit the Barings story in the future as more time becomes available so do check back.
Posted by Ryan at 8:30 PM
Tuesday, February 9, 2010
There have been a number of inquiries about where to find photos of the LIFFE trading floor and a good resource is the LIFFE Facebook page where numbers of people have submitted photos they previously took. The content is open to the public w/out it being a necessary requirement to sign up for facebook and I hope everyone is respectful of the site so it remains open.
Posted by Ryan at 3:07 PM
Sunday, February 7, 2010
Had a chance to rewatch Rogue Trader on DVD and here is a gross overanalysis of some observations I made:
10:45 the Delifrance was across directly from the entrance to SIMEX and traders walking in back were going to the actual entrance.
12:05 entrance to trading floor was a bit absurd that everyone was briefed minutes before beginning work on the trading floor. I understand it’s the movies but still was a bit ridiculous.
19:30 Leeson discusses the error and hiding it w/a clerk which wasn’t true as he didn’t inform anyone of the problems.
20:33 The trader which one of the Barings brokers fights with is Danny "Bubble" Argyropoulos, a real life friend of Leeson’s on the SIMEX floor, and I believe the trader holding him back is Rob “Ches” Lemming who was formerly employed by Barings.
22:38 again the clerk informs Leeson of the errors which is false as only he know of it.
24:00 the name and firm of the large customer were changed.
26:38 most ridiculous part of the film when the traders high five and hug each other after filling an order. Never happened since the trading began in the pits back in the mid 1800s.
28:00 again shows clerk complicit and knowledgeable about breaking even in the error account which no one else knew about.
30:25 Bubble has a few words w/Leeson as he walks on the trading floor
30:55 I don’t think anyone trades like the large customer did supposedly on the yacht.
31:33 legging the option spread was again not discussed w/others on the floor
32:55 bonus of 135,000 pounds on 10 million in profit, it’s amazing how little a slice employees get at banks
37:55 Bubble is said to work at a different firm than he actually did and is depicted as a drinker when he was in actuality a nondrinker
40:00 Bubble wasn’t with Leeson when Leeson got arrested for mooning some women at a bar (pretty sure he wasn’t atleast)
1:02:18 Barings offices were located at Ocean Towers at 20 Raffles Place (shown early in the movie) and not the indicated address. Moments later he misspells “Spear Leeds and Kellogg” as “Speer, Leads and Kellagg” but this is likely on purpose as SLK probably didn’t like being depicted in the movie, even innocently.
1:03:31 The cut and paste document forgery doesn’t get mentioned by Leeson in his autobiography and is a great omission on his part although documented in other books about him.
1:10:45 Bubble is depicted as trading outside of the pit which can’t happen, I know that it wasn’t an actual trade depicted but still…
1:22:05 Bubble can be seen in the background flashing handsignals on a trading desk to the pit
1:22:40 Leeson yells, “sorry, money” to one of his superiors and I find that as the second most ridiculous part of the movie because the concept of actual, real money wasn’t really ever mention on any trading floor as if there was a taboo against it.
1:36:00 Probably the third most ridiculous part of the movie was Leeson saying and signaling “two fifty bid on 100” to the photographers upon arrest in Frankfurt.
-With exception of Barings jackets, no other firm jackets were actually depicted although the most of the local traders wore red. At the CME most locals also wore red because it was the free jacket that was issued upon becoming a member.
-The trading floor depicted is not the actual SIMEX trading floor which was much darker, dirtier and crowded.
-The electronic quote boards were poorly depicted in the movie as it was lots of small numbers rather than one huge number on the board.
I know there are even more points of the movie to overanalyze but it's gonna have to wait until I get to view it again.
Posted by Ryan at 12:42 AM