I read the news today, oh boy
About a lucky man who made the grade
And though the news was rather sad
Well, I just had to laugh
A day in the Liffe – a broker’s memories
Over the last weekend I watched a good, not great but good Gangster movie called Sexy Beast which features Ben Kingsley playing a foul mouthed London criminal called Don Logan . Don Logan has difficulty uttering a sentence without swearing often using multiple repetitions of words in dialogue such as “Not this time, Gal. Not this time. Not this fucking time. No. No no no no no no no no no! No! No no no no no no no no no no no no no! No! Not this fucking time! No fucking way! No fucking way, no fucking way, no fucking way! You’ve made me look a right cunt!”. Oddly enough this dialogue transported me back to my days on the Financial Futures floor as a broker and in particular one client on one day .
The day in particular was the day that Britain was ushered out of the ERM in disgrace and the client in question was the Euro Dollar Dealer at a British Clearing Bank . Peter , known to all and sundry as Nosher ,was a huge trader and afraid of no one and no institution in London , Chicago or Tokyo . .At the time the London clearing Banks were just starting to realise that their ability to dominate the London markets had come to end with the growing influence of the large American trading houses such as Salomans , Goldmans, Lehman . Nosher didn’t care and would get on the phone and scream a torrent of abuse at whoever had the misfortune to answer the phone, normally me , and growl a buy or sell order out . Somewhere I have an old cassette of him screaming a string of abuse at me . It may seem odd that I have kept this old recording for 25 odd years but it always reminds of what a day on the floor encompassed.
I would normally wake at 5.30 in the morning, amazingly I often still do , to catch up on the news . In 1992 it was a different world as there were no 24 hour news channels and so I would rely on the fax that our office in New York, with the closing rates, had sent over and listen to a BBC news programme called “Dawn Traders”. This would be followed by a call to the Tokyo office of the Prebon Yamane where a friend would give me a feel for the market. After digesting this and 3 cups of black coffee with the dog walked I would answer the knock on the door where the driver would be with my partner Bunker and off we would go. Now I should just explain the driver. At the time the Government were running a scheme called YTS (youth training scheme) to get kids off the dole queue and into work. My partner Bunker and I decided to employ one whose main job was to drive us into work and then take the car back and collect us at the end of the day. This served two purposes it got us to work and more importantly avoided mini cabs and for me the embarrassment of the banter with the driver when occasionally my partner would claim “ I’ve got suits in my wardrobe worth more than this car mate “.
Having arrived on the trading floor at about 7.30, after a delicious Bacon Bagel from Birleys next to the exchange , we would check our position for out-trades and errors and start working out where the market would open . How were the opening prices calculated back then? We would call the FRA (Forward Rate Agreement on interest rates ) and Swap desks of a money broker who would give us a run-down of the prices that they were trading and we would then calculate where the markets would open taking into account whether the yield curve had changed and if so whether the spreads between months would have widened or tightened . Having done this we would hit the phones to our clients and tell them our views and try and pick their brains on how they saw the market opening. Our clients ranged from our overseas offices, to banks and finally locals (an independent trader) and other floor companies who may wish to disguise their orders by using us . After 25 years I can still see the dealing board and remember the codes for our clients. For example button 4 was Kop ….who was Kop? Kop was a Hedge Fund in Bermuda whose dealer was Jerry Peele and as any upstanding Brit knows the first police were formed by Robert Peele and known as Peelers but this of course may draw attention to who we had on the other end of the phone so we were amazingly inventive and change this to Kop which of course is modern slang for police!
By the time the first pits opened at 8.20 we had all our buy and sell orders ready and our pit trader knew them. Danny, (Danny The Rot, so called because at 18 he was as aggressive as a Rottweiler), was ready with his cards and the junior trader behind him was using his hands to communicate the pre-market orders . In the booth 3 of us were on two phones each to our biggest clients whilst a junior also had two phones one to our overseas offices and one to Prebons, the money broker. At the time a voice commentary was quicker than the screens and also could add in colour such as the size of the order and who was buying. I must say it was one of the most awful jobs going as the money brokers would be dealing off the prices and if he or she gave a wrong quote the would have a telephone launched at them . It sounds awful behaviour and it was but I still see my old yellow jacket (Junior traders and Runners had to wear a yellow jacket ), David , at Football matches and he holds no grudges. Well apart from the motorbike story which I may well expand on in the next column!
The market erupts as the bell goes into a cacophony of noise, numbers and colour with what seems likes bodies flying around as traders are physically pulled from the pit, hand signals flashed in and fills shouted back. As each fill or part fill is given as few words as possible were screamed down the clients squawk box often using cockney slang. The client would just hear something like “monkey at 48 done “which translated to “You’ve sold 500 lots at 8548”. Or possibly a part fill “Ayrton done working 90 “ meaning you’ve done 10 lots ( Ayrton short for Ayrton Senna meaning Tenner ) and I am still trying on the other 90 .
All day long this seemingly chaotic madness would go on and I can only liken it to music such as when the Beatles were at the most experimental or the primal noise and aggression of The Who, not being a great classical expert perhaps Shostakovich mirrors it as well. Whilst the noise was like The Who the colour was like Kandinsky at his wildest – just a blur of jackets with each colour representing a company and a role on the floor. Buying and Selling often multiple times for the same client within minutes as the news or rumours of news changed the feel of the market until at last the closing bells start chiming from 4.00 . No lunch breaks, no coffee breaks anything but standing shouting, gesturing and screaming for 8 and a bit hours. By the close of business you were too tired to eat and just want to make sure that all your trades match up and either get home or get to the Jam Pot for a few pints. At this point I must come back to why I still have a cassette after all the years.
It is not that I hold Nosher’s verbal garbage in particular high regard; although he could be a very funny man out of the market over dinner it is because it reminds me of what it took to be a floor broker. At the end of the day with Britain’s withdrawal still up in the air we were reading back to the clients what they had bought and sold to make sure that there had been no errors and no unwanted positions . All the phone calls were taped so that any dispute could be settled by the evidence that tape revealed. This particular tape had maybe 30 uses of a particular F word and a dozen or so where various people are described as useless C***s including myself , Norman Lamont and John Major and probably my father for fathering me! During this string of expletives there is an order of “ Buy 50 at 48 “ and a couple of seconds later the response “filled” from me . Peter thought he had bought 50 lots when in fact I had heard only 50 at 48 which meant sell in our terminology. (We were very strict and a client had to say paid for and sold at).Having listened to the tape I was wheeled down to see the chief dealer to explain the error who, thank god, accepted that we were right and that the order had been given incorrectly. That was about £60,000 pounds saved.
By 9.00 we were still sorting and matching orders but it seemed clear that we had had a record day in terms of volumes traded and had only a few errors .Bunker and I got into the car and went home hardly able to speak just ready for a TV dinner and bed with prayers that our punt came good .