From Rhino Poo to blue Smarties the games we played

I walk 47 miles of barbed wire

I use a cobra-snake for a necktie

I got a brand new house on the roadside

Made from rattlesnake hide

I got a brand new chimney made on top

Made out of a human skull

Now come on take a walk with me, arlene

And tell me, who do you love?

Bo Diddly

I was sitting at my desk in the dealing room earlier this week, juggling a Mandarin from hand to hand, on one of those Wimbledon or World Cup days when the whole world grinds to a halt to fully absorb the sporting drama. As it often does my mind drifted back to the days when it would have been equally acceptable to launch the Mandarin across the dealing room at any broker not paying attention, as it was to eat it, and betting wandered into my thoughts. Not betting on whether I could wake up a sleepy broker with a Mandarin, or even Horses as tradition would have it, but wagering on anything, literally anything.

In these days of rolling news and sports channels playing in dealing rooms and the advent of social media I no longer see or hear some of the old games we played. I’m not talking of marbles or spinning tops but the games that cantered around trading and on occasion would involve several companies and possibly countries. Not bloody FIFA 2018, but proper games that were the forerunner in many ways of spread betting. I for one cannot stand my brain being inactive and I suspect that this is a common thread amongst my peers and colleagues. From 5.30 in the morning I’m up and the brain is whirring , for example I’m writing this at 5.45 on a Saturday morning before going for a dip in the Sea ( more about the reason behind that next week! ). Whether it is because I went to school on a Saturday and have that discipline or its because I just want to get on with enjoying life I don’t know, but the brain whirs and whirs. As such a dealing room was the best environment for me that I can imagine.

The thrill, noise and general buzz from the day to day business were fantastic whether it was a market reacting to economic or political news or just general tidying up at the end of the day in the overnight market it was adrenalin city. But those quiet days when the markets were becalmed, as much as a yacht in the doldrums can be, just had to be livened up. Sometimes it would be a Mandarin chucked across the floor or less dangerously a ball of rubber bands but the real fun were the games we played. Not Scrabble or Chess but money market games. Later in my career on the futures floor we would play pound note poker which was a bastardisation of Liars poker that Michael Lewis wrote more eloquently about than I ever could and indeed at $1m a Dollar Bill probably 50 times larger than we ever did and let’s be honest John Gutfreund and John Merriweather were in a different league to all of us in terms of wealth. We also would pile up maybe 15 One Pound coins and then bet the roll ( it was the done thing to carry at least £2000 in £50 notes) we had in our pocket whether when knocked over there would be more heads than tails. Simple games but not nearly as much fun as trading Rhino shit.

Bear with me and I will explain. Imagine dozens of brokers in the mid to late twenties all with brains that just can’t sit still sitting in rooms across the City, Europe and New York becalmed and bored. All of us taking pride in making  two way prices ( a two way price is one which a bank can buy or sell from without issue)and all looking for something to do to prove we are sharper than the guy sitting opposite. Some days we would play spoof, a word one hardly dare mention these days and on other days par to hundred which I guess was just a derivation of spoof. The real fun, though, was in Rhino Shit. The cry would go up “ Oi shag, got a price in a bucket of Rhino Shit “ ? Sane people would of course ignore that question but remember these were hardened money market brokers and traders who were oft regarded by the rest of the City as Shag brokers. Hard, quick but often times bonkers. A price, to those of you who have never worked in dealing or broking, means what level are you prepared to buy and sell a bucket of Rhino shit. Sounds simple? It does till you understand that you had to stand by the price and be prepared to deliver the foresaid Rhino poo if you got the price wrong.

Somewhat similar to the children’s game of pass the parcel the skill was to buy the rhino shit from say Danny on the Lira desk at £10 and pass it on to Nick at a bank (who would be blind on the price) at a higher price and pocket the difference. Sounds easy? It does doesn’t it ,really easy, until you find out that London Zoo sells every type of shit apart from Rhino shit as they were conducting experiments on it . So what do you do as you have to so as not to lose face , deliver it or make a cash settlement on the difference between what you sold it at and the price that the buyer deems to be fair. Not Elephant Poo , not Bear poo but Rhino poo.

The items traded weren’t always that tricky to deliver. There was a dealer who used to attend auctions, at a guess for items left on trains, and I remember buying 100 police whistles which luckily Gary Bone and I turned that weekend at a Kokomo concert at The Winning Post in Twickenham. Well apart from a couple which I would drive clients mad with by blowing them down squawk boxes when I was bored and wanted an order. Mind you that was better than Humming The Dam Busters tune down the box to our Hamburg office in 1996 after they had been flooded, but that’s a whole new chapter . All these games were fun, taught you how to deal and at times stretched your imagination.

As a mentioned earlier the markets in those days were made up of numerate , quick witted characters who loved a challenge and the only degrees we  cared about were the those that related to the proof of the alcohol that we consumed. This is where Blue Smarties come in and they reflect how our minds were, and hopefully still are working. The call was for a price in 200 Blue Smarties. Immediately a messenger (this is pre internet when deals were delivered by hand by messengers who believe it or not were often retired footballers!) was dispatched to buy twenty packets of Smarties. The tubes were emptied , and of course the plastic tops were fired around, and a count was taken of the average number of blue Smarties per tube and a price calculated. So let’s say there were 10 per tube then the cost would be 20 tubes of Smarties. Easy price to work out. You would buy at 19 times the cost of a tube and sell at 21 times the price of a tube. The price got hit and hit till it was trading at one times tube .Each time the seller received the money and had to make delivery. It was only the next day when the Blue Smarties arrived we realised that we had been had ….one packet of Smarties and a can of blue spray paint had been a good investment for one canny broker. The moral of the story? Always check the details before taking delivery.

Those of you who have read all of this, and I hope that you enjoyed it and will share it, maybe wondering why I’ve chosen the lyric I have . Apart from it being one of the great opening lies to a song it just begs the question to be asked  “ Price in a 100 Cobra Snake neckties , please shag “.

Richard Matthews, who began his career in 1973, is a former trader-broker in the London money, futures and foreign exchange markets. Twitter @dickiematthews5

The worst two jobs in the financial markets.

Pressure pushing down on me
Pressing down on you no man ask for
Under pressure that brings a building down
Splits a family in two
Puts people on streets
Written by Queen and David Bowie

Richard Matthews 17th June 2018

Whilst I was standing waiting for my morning coffee a couple of weeks back the manageress was muttering to one of her suppliers about how she couldn’t live with the pressure. At 7.30 in the morning and a shop bereft of customers, apart from me, where was the pressure? Being a Sunday and having a naturally kind disposition I will be generous and suggest that maybe she had had a row with her partner? Or the District line was late again or perhaps taking in my sunny persona first thing was too much for her to handle? Do I really buy that or was she just suffering from the inability to take any kind of stress that seems so prevalent these days amongst the younger generation?
Baristas, Roasters, house blend, maps where the coffee came from are all far cries to the cafes where we used to buy our coffee from in the morning. From my first days in the City up till the late 90s getting a coffee was just what it said and the only question shouted at you was “Sugar”? That was it, simple. I’m not in any way suggesting that the coffee isn’t better but sometimes I just want a simple Coffee. I don’t want to have a discussion over where the bloody bean came from or indeed give them my name although I do enjoy doing so at Starbucks using my nickname and then watching the Barista shout out it out.
The old staff in the sandwich shops, which always seemed to be owned and run by Italians for some reason certainly didn’t ask your name and didn’t really care as they prepared a toasted fried egg sandwich or some other cholesterol raising delight. They just served you and then got on with preparing the staple sandwiches which they would sell later. Simple sandwiches, Cheese and Tomato, Sandwich spread, Ham and Tomato or maybe the really exotic Prawn Sandwich. All freshly cut and piled up with not a shred of cling wrap in sight and any old dishcloth used as protection from the flies and fag ash that were certainly flying around. No thought of Health and safety or indeed healthy eating but boy a bacon sandwich for breakfast and a slice of bread pudding never did anyone any harm, did it?
The pressure associated with sandwiches was not generated in the shops where I presumed tidy fortunes were being made on the back of cash transactions and in the secondary market of Luncheon Vouchers*. LVs were given out as a perk and at the beginning of the month there would be a healthy market in them with the serious lunchers selling them with the juniors and back office employees bidding for them. It certainly ages me that the LV that I can clearly remember was for 15p and I guess the market would be 12p-15p. Oh what fun but nothing compared to the fun of the dreaded sandwich run.
The City, certainly was, a meritocracy and it didn’t matter who you were, who your Dad was or what school you went to you started at the bottom. In the Futures markets that meant you wore a yellow jacket and ran errands, a runner, and in the money markets you started as a board boy which is how I started. I guess a board boy for those not familiar with a dealing room is somewhat like the guy who marked up the board at an old fashioned bookies pitch. The dealing room would always have a long white board (I think that it was actually a black board with chalk when I started) which was dived into rectangles, nothing like the massive electronic boards in the Futures Market. The rectangles would represent different time periods for example in the deposit markets the different time periods from overnight, Thursday/Friday , weekend through to five years would each have their own rectangle. These were in week segments to start with then as the maturity became longer maybe quarterly and eventually in years. In the rectangles we would chalk up the bids and offers from the various Banks with price and size. The idea being that a dealer could glance up see the price and depth of any period he was quoting and also be able to reference whether the guy he was quoting could actually deal. For decades these were the dealer’s failsafe reference points. Even when Reuters started a similar service no electronic screen could show the depth or change so rapidly.
That job as well as being my first job after being about a month in the dealing room was pressure for as I am fond of saying prices aren’t door numbers …they move. It taught you to concentrate and also taught how markets moved and what banks (names) could deal with each other and how a two way market worked. None of this “I’m a buyer can you help me” it was a vicious market where we brokers was expected to make a price blind not knowing whether the bank was a buyer or seller or indeed whether the bank could deal with your counterparty. If the broker got the price wrong he was duty bound to make up the difference between his price and where the market actually was. The scream of difference was not a sound anyone liked let alone the board boy whose fault it always appeared to be. Nothing to do with the dealer spoofing the market or not reading the right price…no it was the board boy’s fault who would then suffer abuse I wouldn’t hurl at Spurs let alone the violence of anything at hand being thrown at them ( normally a spare white board rubber). Quite similar to school in my youth really.
That was pressure but the real pressure for a board boy was the dreaded sandwich run. Seriously I loathed 10.30 approaching as that was the time that the brokers could either face solids for the first time that day or decided to they needed a stomach liner before the magical time of 11.30 when the bars opened. I still remember over 40 years later as a shy kid (err well not many of you knew me then so I might get away with that) standing there trying to scrawl down the order or more often than not just guessing and trying to blag it when I returned with the wrong order. My memory wants me to think that it was dozens of sandwiches but actually it was probably for a dozen people each of whom had maybe two types but still some would want pickle, some loathed lettuce or tomato, some wanted packets of cigarettes as well .Every order was different but in fairness it was always finished with “Get something for yourself” and money thrown at you. You would get to Pepe’s in Mason Hall Avenue and your mind would go blank trying to remember if anyone wanted a Penguin chocolate bar for desert at the same time as trying to remember the cost of each person’s order whilst you nervously felt to see if the £20 note was still in your hand.
The sandwich run of course taught you a lot about being a broker, as did being a board boy. You learnt to remember a series of orders, how to add up in your head rapidly and lets be blunt how to blag. If you experienced the sandwich run as a junior you will know what I mean. Say for example you’re been asked to get an Elephant Bollock sandwich you would return with a straight face and just say sorry I couldn’t get it as the shop had run out of brown bread. Of course it was harsh but both you and the older brokers learnt lessons about your character and ability. But without doubt there were benefits as the junior who took the senior broker seriously when he said “Get something for yourself” and bought himself a Hermes tie from the change of the money given to him for the sandwiches…..I wonder what company he ended up running ?

Jagger, Football and the Futures floor

The thrill is gone

It’s gone away from me

The thrill is gone baby

The thrill is gone away from me

Although, I’ll still live on


By Richard Matthews June 3rdI’ve been thinking a lot about the Rolling Stones this week and have even tried to understand You Tube in an attempt to watch them as I get increasingly excited about going to see them for probably the last time. I am genuinely excited about this and my mind started drifted to what has driven them on for so long. Let’s be honest they haven’t made a great record since the early 1970s yet 40 years later they are still selling out stadiums and getting old guys like me excited. Surely it can’t just be the huge sums of money that they make it must be the buzz from performing that drives them.

As some of you know a few of my relations are in the performing arts as are a couple of my friends. I have never asked any of them the question whether it’s the fame or the fortune that drives them. I did however ask my old school chum Nick Feldman, of Wang Chung fame, how he could go up on stage in front of thousands of fans and his reply was illuminating when he said “Well you did too, when you were on the floor”. Now, I am certainly not claiming I had thousands of fans on the floor, that was for some of my better looking colleagues like Bunker or Prentice, but I did get a great surge of adrenalin on occasions.

The scoring of THAT goal by Marco Tardelli and his reaction or the roars for an encore for Mick Jagger are easy to identify with as ultimate moments of excitement but the selling of a big clip in the market ? Surely not! Well perhaps there are similarities. They are moments of high excitement which lift you and more particularly the actors up from the drudgery of the day to day. Markets are the same and indeed when it comes down to it 99% of the time they are bloody boring and to me that is where the stress came in. Like the drum solo or Arsenal’s long periods of sideways passing, markets can become becalmed in the doldrums. Impossible to explain but that’s the market.

This is not to say that any of us sat idly by doing the Daily Telegraph crossword or playing par to 100, no the quiet markets were in a way when the stress came out. Stress was and is got out oftentimes through humour. A quiet morning in the money markets was the same as a quiet day on the futures floor. I wrote a little about Batsey last week and his love of attempting the wall of death in the pit. Now Batsey is a lovely guy and still a little eccentric but out of all the people I’ve worked with there was one truly bonkers personality, Adrian Scott-Jones. I worked with Scotty, who was more often than not just called Loopy, at R P Martin in the mid 1970s and stayed friends with for many years after. I’ve already tried to write a story about some of our joint luncheon exploits but my editor ( well Debbie my wife, my official PC barometer) told me I couldn’t recount the story so it was cut . Let us just say that when God created Adrian he emptied the draw called eccentric and placed the contents into Loopy’s personality, then rubbed his hands together sat back and grinned. In excess of six Foot, immaculately dressed always with a starched collar and highly polished Brogues Adrian looked every bit the Stockbroker. But he wasn’t he was a money broker or as a stockbroker would look down his nose and say “a shag broker”.

In the 1970s R. P. Martin was one of the top Money Brokers in London and this is where Adrian practised his special brand of madness. RPM were situated on the corner of Gresham Street and Coleman Street just by Guildhall and with The City Circle conveniently located within 100 yards and a back door straight into Shorts Bar. Just to really fill in the picture we had a messenger , Charlie, who used to wheel a tea urn around in the morning to re-fill your mugs but he also always carried a bottle of Vodka for those in need. Wood Street police station was also nearby where at the time the Police stabled their horses and when it was quiet you could hear the horses trotting by. On hearing them Loopy would get his hunting horn out ( just what every broker kept in his bottom draw) , open the window, start playingand then scream“ away the Foxes , away the Foxes”. I can still see him running down the street doing the same dressed in a full Thawb (Google it – I had to!) that he had brought back from an early trip to Bahrain and also the occasions that the Police would pay us a visit. Adrian like all of us lived for the trade. Sadly the last I heard of Adrian he had taken it all a bit too far and was languishing in a Federal Prison for one trade too many- boy that will be a challenge for his cell mate- Loopy if you read this I still love you shagger!

Hitting a spoof bid in the overnight market and watching it collapse or lifting a large offer just before an interest rate move  came out was rewarding . Fun , profitable and made you feel good but nothing compared to the thrill of open outcry . The buzz of the pit and floor watching for a hand signal from you and the noise that came back when you had read the market right and had the market on the run were , or should I say are , unbeatable. To quietly talk to a client, explain that the market was long, thin of bids and being spoofed and for them  to believe you was half the battle but to hear those words “ your amount is my amount “ or more prosaically “ sell the fucking lot” was only half the fun. To actually nod the order in and watch the market collapse, hear the noise and see the panic for me was as good a thrill and rush as any performance in a concert could have been. And do you know what the really good news was? I never had to sing.

Looking back is easier than trading back.

I think I’m goin’ back

To the things I learned so well in my youth
I think I’m returning to
Those days when I was young enough to know the truth

Carole King/Gerry Goffin

I was going to write about being under pressure this week inspired by the waitress in a local coffee shop who was moaning at 7.30 in the morning, in an empty shop, that she was under stress. Hmm, I thought, that’s stress but not as I understand it. I had even worked out in my mind about using the great David Bowie song under pressure to open the article. Luckily I mean the transcript of the first verse not my shower time rendition and then talk about how we reacted to pressure and let the steam valves open. This of course would feature various hostelries from Shorts to The Hole in the Wall bar, thank you Danny Elsey for the nudge, through to the more rock and roll relaxation techniques that were employed.

Tempting, really tempting, and indeed as with lunches there are a cornucopia of stories but the thought of having to change so many names was a bit too challenging for a Sunday morning so the stories of Big Val and little Tony n the City Circle or Maggie in The Cock and Woolpack will have to wait a while. I am still going to look back but to a time and a market where to be as hard as nails wasn’t always quite tough enough. I suspect that all brokers and traders have a league table of speed and aggression that the various markets in the City represent. For example , and this is only a personal view, the broking of Local Authority loans ( where I started) was and probably still is the bottom of the food chain followed by Sterling interbank up through Dollar Depots to Spot FX . I can only talk about the days that the markets were still in their pomp and dealing rooms were filled with noise and voice broking was the only broking we knew. All these markets I worked in and , rightfully or wrongly , viewed the aggression of the money markets one up from say the Stock market , Lloyds or the Gilt market .For me though the hardest , fastest and most unforgiving markets were the futures markets.

It’s hard to sometimes to reconcile, let alone explain, the aggression of a market and the happy memories. You literally stood and shouted your orders for up to eight hours and tried to physically intimidate your counterparty. The first pits used to open at 8.02 we had all of our buy and sell orders ready, our pit trader knew them and was shouting along with the other traders selected orders pre market from 8.00. Danny, (Danny The Rot, so called because at 18 he was as aggressive as a Rottweiler), and Jonny Staf were ready with their cards to record trades and then throw them back to the junior trader behind them who at the same time was using hand signals to communicate orders to the market . This carried on till 4.02 in the afternoon. 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 gave a wrong quote they would hear “Exocet !!” as I launched a telephone at him . Worse still was that when he really hacked me off and it was raining I would make him go and sit on my motorbike to keep the seat dry.

Some of it sounds awful behaviour and it was and I’m not proud. I still see my old yellow jacket (junior traders and Runners had to wear a yellow jacket), David, at Football matches and he admits although we were brutal it was a great training. David holds no grudges and has had a highly successful career in Bond trading. Well no grudges apart from the motorbike story, oh and the Pheasants and he did mention the £20k loss. He almost deserves a column to himself!

There are two things that really stick out to me only one of which I knew at the time. This is the humour. A times  it was Batsey ( named after Norman Bates of Psycho) running around  the Short Sterling  pit at break neck speed pretending he was on a motorbike or the more childish humour of attaching a nylon transparent fishing line to the back of a fifty pound note and then as an innocent runner bent over to pick it up jerking it away. On really quiet boring days the more craft conscious of us would fashion working spurs from trading cards which would be attached to an innocent traders shoes who would then walk around to yelps of Yee-hah. I can still hear the communal singing  whether it was a rendition of “ Don’t cry for me Argentina” for Jimmy Two names, as he entered the market after an evening of debauchery, or the humming of the twilight zone before the release of  Non-Farm Payrolls. 3000 people humming or singing in and enclosed space was quite magical. Not as moving though as the two minutes silence observed every year for Remembrance Day. It didn’t matter how fast the market it stopped. This still sends a shiver down my spine when I remember it. It didn’t matter whether you came from the East End or the West End or who you worked for at certain times we all came together.

To me though, the most amazing thing to come out of the market is the friendships. Remember this was a market where you stabbed someone in the front if you got the chance. Nothing sneaky if you didn’t agree with someone you did what you had to do. I am ashamed of a lot of my actions down there –my finest moment was certainly not cutting the phone cable of a rival broker just before a figure (sorry Jaffa my old cocker). Actually even the nicknames could be vicious. Jaffa? So called because he couldn’t have children, in other words seedless. But you know what? If I saw him again we would have a good laugh about it. Err well perhaps he was the exception.

I am feeling reflective this weekend , partly as the I’ve been glancing back at what I have said about the markets and Italy for the past few weeks ,but more pertinently because I’ve been in contact with four people who worked for me back in the 1990s. Always a little worrying when you haven’t seen or spoken to someone for 20 years and you recall stories like the one about David I mentioned earlier but this is not a plea for them to just tell me nice stories of the old days its actually the wonderful camaraderie that is felt between all ex floor staff be they the lowest of the low to the very top we all shared an experience which was unique sometimes the worst job but as memory brings a sepia tone for many the greatest days of their lives. I just hope I am remembered for being a decent boss on more days than those when I was a bastard. As I managed to sit opposite one on a train recently and he still got in contact with me despite me obviously having a conversation without recognising him I cant have been that bad!

All my favourite words start with F !

Abide with me, fast falls the eventide

The darkness deepens Lord, with me abide

When other helpers fail and comforts flee

Help of the helpless, oh, abide with me

Henry Francis Lyte / Will Henry Monk

By Richard Matthews May 20th 2018

I have been thinking a lot about my late father this week. I often think about him when I’m in The City as he spent most of his working life in and around Ludgate Hill but this week it was the approach of the Cup Final that got me remembering. Not because he was a Chelsea supporter, although like me when it comes down to it and a London team is playing he would support them, but because he just loved football and adored the whole day of the Final. From breakfast onward the television would be on and filled with the build up to the kick off and 3.00. From David Coleman presenting live shots of the façade of the hotel whilst telling the viewers what the players were having for breakfast through ”Jeux sans frontiers” Cup Final special to the team coach we both loved it. The real highlight was to spend the day with him and go.

Luckily we went to several finals together and suffered together the indignity of losing 3-1 to Swindon in 1969 (I know it was only the league cup but it still hurt) and the high of beating Liverpool in 1971 a day that we would never forget. He loved the game but also the ,marching band of Marines at half time, when he would stand stock still and although he never said anything he was clearly remembering lost friends but more than anything he loved the singing of the National Anthem and “Abide With Me”. We sung “Abide With Me” at his funeral and it never fails to move me, I confess I had a tear in my eye yesterday when I listened to it being sung and remembered him and indeed my late father in law whom I watched the last Cup Final with. I was surrounded by rowdy family who didn’t know the significance to me but they reminded me that life goes on. My father was a quiet man not adverse to dishing out the occasional clip round the ear, as he would say, but he was a man who worked his way from the depths of Docklands, in the Isle of Dogs, to a successful career and I’m sure he gave up much of his life to educate his family and give us a better start in life than he had.

Every year he would take two weeks holiday and we would fly to Pisa, in Italy, normally arriving in the middle of the night on a cheap flight and of course the hotel would be shut so we would sleep in the garden. This was in the days of exchange control and if my memory serves me well the airport in Pisa was still under US military control when we first went in 1960. We would take a packet of porridge for the hotel owner, Signor Bandinelli. Odd you may think but he had been a prisoner of war in Scotland and developed a taste for it. The holiday consisted of lovely long days on a beach with warm water and treats of an Ice Cream and occasionally a hot slice of Pizza. I can still see the old man with a pith helmet who lugged a huge heated box along the beach or maybe Bomboloni or fresh Coconut as a snack. I developed a deep love for Italy and indeed in my early teens for a beautiful girl that played football on the beach which led me to buy the Dino I wrote about last week and its subsequent theft.

What a sense of achievement my father must have felt from learning to swim in The Thames in the time of the First World War to taking his family to swim in the beautiful warm Ligurian Sea.

That’s four words starting with F then. Father, football, Ferrari and Forte dei Marmi. My favourite word starting with F is of course the word the rhymes with duck. A word I hardly used before working as a broker but quickly learnt that it has extraordinary wide use and is indeed one of only two words that can be used as a noun , adjective and verb. The other of course rhymes with the pre Euro currency of Ireland. Let us be clear here it’s a word that I never heard my father utter although he must have thought it on many occasions at Highbury, particularly when Willie Young was playing, but using its past participle ( F***ed for those not educated !) is how Italian politics now appears to me .

I’ve written several times how the Italian elections may prove a watershed point in both their own future but also Europe’s. A country that has had 65 leaders since the war is not sending out the right signs of stability and sooner or later this had to come to a head and implode. The impending unholy coalition of extreme left and right populist parties which I keep seeing as a horse-shoe is all of a sudden almost, and may indeed be by the time this is published, a reality. Never mind has been the attitude towards this, Italy will muddle through it always does. Emboldened by the failure of Le Pen and other populist leaders the markets have ignored for too long the real chance that this time Italy was going to be different.

The BTP/Bund spread widened as I have predicted but actually why would you buy Bunds any more than BTPs? Be under no illusion the policies which are coming out from the two parties threaten all of Europe. With Merkel weakened in Germany and now the target, rightly in my opinion, of Trump’s disdain due to their unwillingness to make the 2% NATO contribution that they should and Macron fighting battles at home the Euro looks very vulnerable and with noises off from Italy I would be wary of holding any Euro paper, Bonds or Stocks. As Bond yields increase in the US the trade must surely be to buy Dollars and watch yields increase. We have almost a virtuous circle as I have described recently. The Dollar rises in value as there is a flight to quality, money floods in and companies create new jobs which can’t be filled which causes wage inflation and interest rate rises and guess what? The Dollar rises some more as the 10yr yield rises. Easy when you know how, they say ……..

Richard Matthews, who began in career in 1973, is a former trader-broker in the London money, futures and foreign exchange markets. Twitter @dickiematthews5

Red Car,Yellow Car those were the days !

Oh Lord, won’t you buy me a Mercedes Benz?

My friends all drive Porsches, I must make amends.

Worked hard all my lifetime, no help from my friends,

So Lord, won’t you buy me a Mercedes Benz?

Janis Joplin 1970

By Richard Matthews May 13th 2018

I wrote about my old friend Freddie Martin a few weeks back in relation to business trips and visiting Ireland back in the 70s and was delighted when the old boy got in contact with me this past week. Delighted not only from the prospect of meeting up but also from his question “Did you know I got your old company car when I joined R.P.Martin?” In truth I didn’t and I hereby apologise for the state that it was probably in, dented, stinking of cigarettes and probably a few empty bottles rolling round in it.

Let’s be clear on one point. I love cars, always have and always will. From my first Dinky, Matchbox or Corgi toys through Scalextric to the real thing. Despite always wanting a metallic blue car I seem to have always veered towards red and yellow and preferably Italian. Indeed the car that Freddie was referring to was a bright red Alfa Sud Sprint Veloce. A gorgeous car with a lovely throaty flat four boxer engine. It sounded great went well and as all cars Italian, in the 70s and 80s, was reluctant to start if there was even a spot of rain around. Never mind it got me around in some style and indeed I seem to remember getting it to France whilst endlessly playing Avalon and Layla on the cassette deck. It was of course a company car.

Company cars for much of my career were not only the fastest versions of that model but also the cheapest pay rise that could be given. Tax efficient to the employer, cheap to finance through leasing and status granting to the employee. What was there not to like? On the surface not a lot, certainly from the employees point of view not a lot, not a lot if you were thought highly of anyway. But from the employer a whole host of potential problems. The era that really was interesting was the Red Porsche 911 period when all of a sudden Thatcher’s children started earning big bucks in the City. A red 911 became a status symbol not only for the driver but also for the commentator as it seemed to highlight all that was obnoxious in the City.

Out of all the cars I was responsible for giving to employees, and indeed having myself, I can’t actually remember anyone actually wanting a Red 911. Black with a whale’s tail ( Bunker) certainly, Silver (mine) Blue soft top(mine) but never red. There may have been a Red 924 come to think of it but the bête noir of the media I don’t recall being responsible for. I do though remember the fun and games that the cars ensured we all had. Looking at it from an outsider’s point of view the employer and employee agreed what car was going to be given, the employee accepted a lower salary (yippee) took the car and everybody was happy. If only it was that simple. In broking, for that’s all I can talk about really, nothing is ever simple and everyone is always looking at the angles and of course we were all young. Probably too young to appreciate what we had and consequently every problem imaginable came about. From the predictable Monday morning calls when a nervous voice would say “Can you just talk to such and such Police station” to the inevitable “I’ve had a little accident“.

If you are given something, however much you deserve it, you will never respect it as much as if you bought it. Fact. I’m as guilty as the next man for the way I misused company cars and I hope that you realise that it was just down to youthful exuberance. It was of course the same youthful exuberance when Papa T, Stick and Scrapper Harris (I bet you can’t guess why he had that nickname) carried a Mini up to the first floor of the Runneymede hotel during a company outing? Nothing to do with the industrial quantities of Beer that had been consumed. Company cars were used for every reason from impressing girlfriends who had the use of pool cars to creative business opportunities. In one instance the girlfriend of a senior colleague of mine managed to slam the car into reverse on the motorway, thankfully she didn’t think a pool car was destined for the nearest swimming pool. The most creative use was, without a doubt, spotted one morning outside the original Futures market at The Royal Exchange.

We had a dynamic young trader called Danny the Rot not because he was rotten; oh no he was thus called because he was as ferocious as a Rottweiler. Tall, ginger and with a sharp tongue and a brain to match he was still a teenager when we gave him a BMW 320i as his first car. I suspect he hadn’t actually passed his driving test but never mind. We were standing, as we did, pre market outside the Royal Exchange when we saw Danny’s car turn up. Out he gets, as does his Dad, and we all think how kind of Dad. Next, Dad walks to the boot, gets a plastic bag out attaches it to the boot and carefully places an aerial onto it and sets off for his day job as a mini cab driver using our car. Oh happy days and they normally were until the employee left and on occasions they disgruntledly would drop the car keys down a drain. Not Danny though he was always behaved like gent, well to me anyway.

I worked my way up through various cars until I bought my dream car a Ferrari Dino in the early 90s. I had always wanted one since I saw my hears desire, well a pubescent boy in Italy was allowed to dream, get out of one in Forte Dei Marmi in 1969 and eventually I got one as the prices plummeted in the early 90s. I lovingly rebuilt it and changed its original colour of red to yellow and to complete the dream I drove it to Italy and parked it at the very spot that I had last seen this girl. I got out, breathed in the scent of pine trees and sun oil and thought “ I’ve bloody made it “ and went to lunch only to return a few hours later to find that it had been stolen. I did get it back a year to the day later and actually have a good idea of who stole it but that story can wait.

In present day Italy the seemingly endless wait for a resolution to the Italian election seems to be drawing closer with all the usual suspects being involved even Berlusconi seems to have taken political Viagra as he rises back into prominence. I could write thousands of words about what the outcome will be and still be nowhere near correct so all I am going to say is that a horseshoe alliance of left and right seems increasingly likely and any thoughts that Italy will muddle through as normal will be misguided. There is every likelihood that an anti- Europe, anti-euro, pro Russia, Populist Party will come to power in the heart of the community.

I’ve written mostly about cars this week and Italy still manufactures the most beautiful sounding cars but not even this fact justifies the 10 year BTP yielding less than the 10 year US Bond. That is as about as logical as Australia competing in that travesty called the Eurovision song contest and must surely point to more USD strength .

Have a good week and if you enjoyed this please share!

Richard Matthews, who began in career in 1973, is a former trader-broker in the London money, futures and foreign exchange markets. Twitter @dickiematthews5


Now I know some of you will want to know if I still have the car. Sadly no, and yes I sold it too early but as they say you never go bust taking your profit too soon.

Marbella, Madrid, Fatima and a Nun

By Richard Matthews May 6th 2018

It is always incredibly pleasing when an article you’ve written is well received and doubly so when people featured in it contact you to express their agreement, amusement or just plain satisfaction with what you’ve written and last week was one of those weeks. Friends who I have not heard from in years contacted me and reminded me of stories associated with TITS whilst others reminded me to have no regrets and to be honest I don’t have too many. Just good memories of people such as lovely Lucy from Easy computers who tried to help us, the “Dinner Ladies” who were the women who brokered mortgages from part of the office led by Heather from IMS and parties where Cheesy encouraged people to dive though inflatable rings in the swimming pool. A ring that not even Lucy,who miraculously squeezed into her clothes, could have squeezed through.

I reflected on all this memories whilst I was in Madrid this last week and more pertinently about someone who never visited the office, Douglas. Now Douglas was a neighbour of mine up in the mountains of Granada but not just any neighbour he was the most extraordinary friend and on occasion’s dangerous drinking partner. He came from the south west of England and had the burr to his voice that identifies people from that area. A big man of maybe Six foot two or six foot three with a handshake or more often a slap on the back that sent shudders through the body. Bearded always immaculately dressed and rarely without a cigarette puffing away. He was part of an extraordinary group of people that I had first encountered when I moved to Spain from the UK. Ranging from heiresses to a retired Latvian smuggler and his American wife Phyllis …who had been a book keeper in a casino in Havana. Need I say more?

Douglas, pronounced Dooooglas by every Spaniard was different. Doug loved a pretty woman and indeed one evening over a long supper tried to seduce, in order of appearance, my mother in law, my sister in law and our daughter all to no avail. I’m sure he won’t mind me mentioning that he was, as the Spanish say, a Viejo Verde. He had several passions, alongside chasing women, including rose gardening in the nude by the full moon (his garden still has over a thousand species of roses) whilst living by an Ermita ( Spanish for an isolated chapel) to Fatima and every year he helped to finance her Saint’s day but our joint passion was football. He had wonderful connections in football with Real Madrid and through these into Telefonica. Telefonica were, and probably still are, a living nightmare to deal with and in the end destroyed TITS as they were unable or unwilling to supply a decent internet connection for us but not without Douglas trying every contact he had to help me and boy did he have some contacts. I will forever be grateful to Douglas for trying to do this and I remembered him this week as the last time we were meant to go to football together was the last time Arsenal played in Madrid in 2006 when they came away with a famous result and he cancelled at the last minute only to die eight months later.

Douglas always tried to get me to look beyond my own nose about Spain and realise the connections that it had through South America and to see that was really where the business opportunities lay. As anyone who has ever visited the Casa de Contratación in Sevilla will tell you the Spanish Empire was every bit as big and influential as the British Empire and those old ties via language and institutions still run deep. With the news of Argentinian forcing interest rates up to 40% last week the reverberations will surely be felt in the Spanish banking and industrial sector.

Those of us with long memories will cast our minds back to the 1980’s and the lost decade caused by the Latin American debt crisis. It is obviously too early to compare what is happening to that dire period but the risk of contagion is certainly real. After the U.S. employment and earnings figures last week showed virtually full employment in the States and wages starting to increase the threat of US inflation returning and encouraging a more hawkish stance from the fed is certainly upon us. Reading the numbers and taking into account the empirical evidence there seems to be a shortage of skilled workers which will exacerbate the inflationary fears as “tax” dollars return to the States and create further demand for labour. There are already some signs of emerging markets being pressured as dollars fly the roost and as I wrote earlier in the year the LIBOR/OIS is worth watching as rates rise and fears of a Latin American default hit the market.

A time for safe haven investments and currencies appears to be on us and Sterling will of course be caught in the crossfire. Things could turn really ugly for targeted currencies if Donald Trump ever decides to reinforce his trade with an infantry of interest rates which cannot be discounted. All of course a long way from the beautiful Ermita that Douglas used to live beside and pictured at the start of this column. It seems apt to write about Fatima’s acolyte this week as next Saturday is Fatima’s day and hopefully will be celebrated in the style that Douglas brought to everything he did and may she continue to look over us. Oh and the Nun? Well all I can say is that Douglas had apparently attempted to seduce a Nun one day only to be rebuffed at the last hurdle when he revealed to her that the key to his heart was her making love whilst in her habit which proved to be a step too far.

Richard Matthews started his journey in broking in 1973, is a former trader-broker in the London money, futures and foreign exchange markets Twitter @dickiematthews5

Postscript ….

I was never really sure of Doug’s surname as it seemed to change on quite frequent occasions. I heard one day that he had fallen from a Plum tree where he had climbed to pick a particular Rose for a woman he was having supper with. He never recovered and died a few months later in October 2006 at 63. I went to his funeral where it turned out he had 5 ex-wives (he had only ever admitted to two) and one of them had stroke at the wake. Gone but never forgotten.

Trading in The Sun – my dream that went it’s acronym up

And it seems to me you lived your life

Like a candle in the wind

Never knowing who to cling to

When the rain set in

Elton John – Bernie Taupin 1973

By Richard Matthews 29th April

I wrote last week about being in the right place at the wrong time which probably should translate to right idea wrong time, for those of us in the financial markets, which is way too often the case. I don’t tell jokes well and to be honest I transcribe them in an even worse manner but as I am on holiday, and the joke is related to timing, I will make an exception this once. Here goes. There was many years a young married couple who decided to start breeding chickens in their flat in London. They started with a couple of chickens that laid eggs and the business grew and grew with more chickens laying eggs and they constantly reinvested into the chickens till one day they had could afford to, and indeed needed , to move to a larger property . They scoured the market and found a lovely beach front property with a huge basement where they and their chickens could live and they moved there. The business continued to grow for they were very good chicken farmers and soon the whole basement was full of chickens. Then one night a storm came and the sea crashed onto the beach and surged over the sea wall and flooded their basement and sadly all the chickens died. The moral of the story? They should have bought Ducks.

I moved to Spain in about 1995 and in an attempt to make turn two years garden leave into a Spanish version of the Good Life. I purchased a beautiful Cortijo way out in the country and indeed bought  Chickens along with  Goats , Rabbits even a Pig  at one point along with dozen of Orange trees and Olive trees from which my dream was to produce fantastic Olive Oil . Now this isn’t the VENUE to discuss the fun and adventures I had there, indeed those stories could form a book of their own, but that was the main reason I was in Southern Spain. The whole dream, become a successful farmer, write a book about is and make a TV series. Well it didn’t work and ironically one of my neighbours did write a book, Driving over Lemons, about the area, which drove hundreds of English people to the area and ruined it. So as I always want to go against the crowd I left the small holding in the tender care of a local farmer (big mistake number one) and decided to go to the coast and start a trading arcade for day traders.

By the turn of the century open outcry had all but ceased and trading had become almost exclusively electronic in other words the floor had gone. But traders being traders new communities sprung up where they basically rented space and facilities from businesses and came to a communal office and traded away. I guess the easy way to describe the business was that the facilitator rented a large office, supplied the infrastructure from internet to clearing and then diced it into individual chunks which when added up were greater than the outlay. In other words profitable and indeed it was and is a great business model. I took the idea one step further and opened the first trading arcade in Spain in Puerto Banus, Why not? Trade all day and enjoy the benefits of a great lifestyle what could go wrong with that and on that thought Trading In The Sun was born.

         Trading In The Sun, or TITS as it was known by all and sundry, started in a small office next to a trendy restaurant called Terra Sana in partnership with Jimmy Two-Names and with the support of Sonny Schneider and three of his traders Scotty, Cheesy Collins, a lovely man  with warm dancing eyes set in an inverted  inverted Dairylea Cheese triangle of a face, and Soapy Drew all great fun people. Three of the nicest people you could wish to meet who were joined by others who would visit at Holiday time such as Porky and Max . Fantastic flats were rented in Banus and we got going. Well we almost got going but I had overlooked the vagaries which are Telefonica and despite their promises the speed of the internet never lived up to what was really needed. We tried and tried to get the infrastructure right and a few more traders joined but eventually I gave up the ghost as competition from the tax friendly centre of Gibraltar just down the road was too much.

Some jolly japes were had by all and some great Runyonesque characters appeared such as Jimmy G the wonderful estate agent, Drunken Duncan the IT consultant, Pedro the most English Spaniard who was our landlord and Helen, the somewhat eccentric Scottish accountant. I hope all those reading this that were part of it will agree that we all gave it our best shot but in the end TITS had to go TITS up. Personally I have some regrets especially that I sold the business and the buyer reneged on paying me and still to this day parades around as large as life in a Bentley whilst living in Sotogrande maybe now Simon’s conscience will prick him. You live and learn and as I look back my mind goes back to the joke at the beginning and I realise that I should have bought ducks or in this case chosen Gibraltar over Puerto Banus but it was a great experience.

I am reflecting on this adventure rather than the markets this week as I am back down in the area and decided to have a look at the old shop, now a hairdressers, where TITS started. Sitting next door  in Terra Sana I was feeling sad that a great idea was so close to working but located 40 miles too far East. However, Debbie, my wife pointed out that if we had not tried to have a crack at making it work our son Jeremy would never have made a friendship with a fellow golfer who he met whilst he was working in Spain which will last a lifetime let alone having lived a teenagers dream as JezzaBanus. And the boy with a bald head and three spikes of hair to compliment his personalised graffitied (sic) jeans became the man our daughter married and has three children with. It all goes to show that there are more important things in life than the markets and being on holiday and ignoring them is one of those things.

This column is dedicated to Julie Taylor who worked as a PA for Trading in the Sun and sadly died late last year. She was sadly a candle in the wind.

Posters by Tommy Rockett ..the boy with spikes instead of  hair.

Richard Matthews, who began his career in 1973, is a former trader-broker in the London money, futures and foreign exchange markets. Twitter @dickiematthews5





From Bettys to Bunds via Leeds

Right Place wrong time

I been in the right place but it must have been the wrong time

I’d have said the right thing but I must have used the wrong line

I’d have took the right road but I must have took a wrong turn

Would’ve made the right move but I made it at the wrong time

Dr John Rabbenack

As the train pulled out of the station sounds like the start to an old blues number but when I add in Harrogate station it becomes clear that this column is not so much about Mississippi Slim but more in keeping with a singer who could be called Dales Danny. I digress. As the train pulled out of Harrogate Station on Friday evening I sat, relaxed and reflected on a good couple of days of business which included seeing old friends and the making of new friends. I checked my ticket on my I-phone and glanced at the first station and with an awful sinking feeling realised that I had got on the wrong train and was heading for Leeds instead of York where my connection to London was to be. I spent the rest of the journey to Leeds trying to work out if I could make Leeds and then head to York and still make the train which I could if I was able to sprint from platform 4 to platform 18 in 2 minutes. My decision was made when dozens of Yorkshire cricket fans, who looked like they had enjoyed their day in the sun as much as I had enjoyed my day working, boarded the train at Headingly and the arrival time was delayed by 5 minutes.

Having left my headphones in the hotel, what a great trip, I had plenty of quiet time to reflect and realised that right place wrong time is so often what happens when you trade or try to reflect on the markets. Without doubt I had made a classic market error in taking the wrong train. Over the years we had countless errors when hand signals were misread or often in my case just wrong. Red Dec would be traded instead of Dec, buy signals instead of sell signals flashed into the pit or 15 misheard as 50. To avoid the worst of these problems various tricks were used such as “that’s 15 half of 30“ and the discipline of saying that you always  “paid for and sold at” taken from “4 for 40 , 50 at 5”. Seems unimportant but if a client said “I buy at” the noise and speed of the market meant you may just hear the word “at” and execute a sell order. It happened on occasions, tapes were listened and arguments made, we would always be really tough on protecting our position. Well tough and commercial… you couldn’t afford to lose too many lines. I should perhaps explain that clients were called lines as they utilised one of our supply of direct phone lines which covered our overseas offices and clients as far afield as Bermuda and Singapore. Dialling a number was too slow. Some mistakes though were looking back just hilarious even if they did cost us six figure amounts and sometimes they settled the discussion over a person’s competence.

Back in 1990 (I am sure I will be corrected on the exact date) I was jointly running Babcock and Brown’s futures business when the powers to be decided to purchase the noble house of Fulton Packshaw who had their own headstrong futures team including some great brokers and some, let’s be honest, journeyman. The day the deal was concluded we sat in the boardroom listening to Colin “two chairs” Taylor telling us how good his team was and that he was going to take over the running of the whole business from us. Now Two Chairs, named thus because of the size of his backside, was a very bright man but even his brain could not foresee what was going to happen next. It was the Tuesday after the takeover and followed bank holiday. To give the full picture I need to add that over the previous weekend the FTSE and Bund pits had swapped position. Unfortunately the trader at Fulton’s forgot this and when he received and order to sell the FTSE, on the close, he ran into what he thought was the correct pit and hit all the bids that were showing and walked out pleased as punch. It was only when the trades were checked that the mistake was realised and as the client had to be filled he was left long FTSE and a short Bunds. Sadly for him the client was right and the FTSE collapsed overnight causing the Bund to rally. An expensive mistake but we it gave us the opportunity we needed to really take control. This we did and at the next board meeting we cemented our control with a comment was along the lines of how can you run a futures business when you don’t even know where the pits are?

Harder to make errors these days but fat fingers happen and trades still get put on back to front and with the market volatility the way it is at present that could be a painful exercise. Bonds in both Europe and the States are knocking at new levels and the key 3% yield is being tested in the 10 year USD Bond sending shivers down the spine of the equity markets. It feels that with nearly full employment and a Trillion dollars set to return home inflationary fears may be well founded and yields will climb at the same time the 2 year against 10 year Bond spread continues to narrow spreading fears of a recession in 2019. With 37% of the S&P 500 set to report next week equities could be fun.

This side of the water King Macron looks increasingly isolated in his wishes for a more federalist Europe with the power of the populist parties increasing and Merkel not appearing to be interested and his reforms will struggle. In the UK it increasingly feels like there are two hopes, no hope and Bob Hope, of resolving the intractable problem of the Irish border. Combined with the pressure being exerted by the House of Lords for the UK to stay in a customs Union with Europe the prospect of a hard Brexit is increasing which, and I may be the only person who thinks this, would be good for sterling.

To corrupt Dr John’s song at Harrogate Station I was in the right place but got on the wrong train. Not for the first time and anyone who knows me well will know that really , and I’m not joking , anything further up The  Old North Road than Whetstone I am jiggered. But did I get home before the cup semi- final? Thanks to an understanding ticket office I managed to get a connection from Leeds and arrived back in London only about 10 minutes later than planned. Next week I am going to Marbella , an area I know well, for a few days break and no doubt whilst I am there I will reflect on my days of living and working there and a another case of right time wrong place.

From Amsterdam to Zagreb I thought I had seen it all, but I was wrong


I’ve been everywhere, man

Crossed the deserts bare, man

I’ve breathed the mountain air, man

Travel, I’ve had my share, man

I’ve been everywhere

Johnny Cash

By Richard Matthews April 15th

Business travel, business meetings and business lunches are inextricably linked. Indeed Lunches and suppers form an integral part of the business trip. As the song says “I’ve been everywhere man “ and I have been everywhere on business from Amsterdam to Zagreb (I impressed myself with that fact!) and enjoyed wonderful hospitality and made many great lifelong friends in all the places I have visited. Some trips you look forward to more than others and if I’m honest the choice between visiting Chicago or Bermuda in November was, as they say, a bit of a no brainer. Thankfully I had a client, actually a great friend too in Bermuda, who of course needed regular visits. Bermuda a beautiful place but also the only place I’ve ever been seasick and having been so discovered a passionate dislike of deep sea fishing. One of my erstwhile colleagues there used to insist that I turned my back on him every time I saw him as he claimed he only recognised me by the back of my head as he was so used to seeing it hanging over boat’s railings.

I was reflecting on business trips this week having spent the day in Luxembourg, and as always with business travel, an inordinate amount of time at airports. As I left a rainy London on Tuesday morning I was not expecting to sit in the sun in the charming Place d’Armes in Luxembourg enjoying lunch but we did. As I sat in the airport waiting my flight I reflected back on some of the trips that I had made. To be honest some of the places, Hamburg, for example I am biased against due to the relationships I had there, and Paris. Well Paris a city I love but a city where we had a fractious relationship, whilst at REFCO, with our sister office. Actually fractious doesn’t quite do the relationship justice. Horrendous may be a better word .Never mind though it still memorable for many reasons and in particular for a visit I made as a money broker. Whilst I was a broker at Babcock and Brown Tony Two-Names ( Anthony Llewelyn-Davies) myself and Terry Barnard visited Paris . As we drove in from the airport Terry turned to us and said “Amazing how many branches of Macdonalds there are in the capital of food“. Tony and I looked at each other quizzically and then suddenly Terry exclaimed “ Look there’s another one” We glanced out of the cab window and we spied a large M advertising the Metro.

I have been always enjoyed travelling from a young age when I hitchhiked around Europe and remember my first business trip to Belfast in the 70s where we stayed in the Europa Hotel which at the time was reminiscent of what a hotel in the Lebanon was like on a trip in the 90’s. Great times and memories which include having great fun in Dublin where we went fishing in The Westbury hotel with Papa T. True The Westbury, fantastic hotel that it is , offers many things but not a trout stream . God knows why we thought it might but then we did discover Vodka and Lucozade as a hangover cure. Having been everywhere over the years I thought I had seen everything. Well I was wrong and before this column turns into Trip Advisor there is one more story I wish to relate.

I got a call this week to meet two clients who were visiting London, from Hong Kong, at The Mayfair Hotel. Nothing unusual in that and being around the corner from Langans I was more than happy to pop up and see them on Friday morning. It was only on my way up there that I got a text saying “come to room 335”. Odd I thought but hey, never mind let us see. I went up to the third floor, found the room number and knocked on the door which was quickly opened by…a Nurse. Now to be honest I wasn’t sure whether they had got into a fight the night before and she was caring for them or she was part of the previous night’s entertainment and that they were still partying. Then I walked in to be presented with the two guys on intravenous drips. As I mentioned earlier Vodka and Lucozade was about as adventurous as I ever got when it came to hangover cures but apparently the new idea is to replace the vitamins you’ve lost drinking with a NAD drip. Well they tried to convince me it was the best thing to do and having seen them again on Saturday they did look a thousand times better so it looks like there is something in it.

Certainly Sterling this week looks like it’s been on a vitamin drip and reacting well. Europe’s travails continue with the union standoff in France seemingly slipping over to Germany now where there have also been strikes. The French rail workers and Air Crews are trying to coordinate strikes indeed one of the people I met in Luxembourg had only made the meeting as he had got so fed up with trying to travel by plane or train in France he hired a car. In a throwback to 1968 Students are also striking as they fear that the government will increase University Fees which at present are only €184 per annum at The Sorbonne. Sterling should continue to benefit from these problems including the increase in Right Wing anti Europe populism on the mainland of Europe. As a secondary factor it now appears clear that the UK will benefit from a good trade deal from Europe for no other reason than Europe needs the money that we will be asked to pay for it with. Do not be surprised if Sterling approaches €1.20 in the short term, indeed some chartists, including my muse Sir A, are looking for a substantial move back towards it’s all-time highs in the €1.40s over time.

As with all things in life though be prepared for a shock. With Putin and Trump shaking their fists at each other, like the cartoons of Presidents Chernenko and Reagan did in the video to Two Tribes in an earlier era, there is the potential for a huge error of misjudgement in Syria. Whilst this posturing carries on safe haven currencies should remain attractive and the stock markets vulnerable and maybe in need of more than a NAD drip.

And just in case you thought I was exaggerating….

Richard Matthews, who began his career in 1973, is a former trader-broker in the London money, futures and foreign exchange markets. Twitter @dickiematthews5

This column is the opinion of the author.

You gotta serve somebody but what are they like?


You may be a business man or some high-degree thief

They may call you doctor or they may call you chief

But you’re gonna have to serve somebody, yes you are

You’re gonna have to serve somebody

Well, it may be the devil or it may be the Lord

But you’re gonna have to serve somebody

Bob Dylan – “Gotta serve somebody”


Rather how one feels after a four course lunch I fear that I am suffering from too many columns about lunching and dining out. Certainly my body is creaking having entertained a lot last week, even considering I don’t drink and am very careful with what I eat, which is not to say that it wasn’t enjoyable. Both the food and the company were top drawer but this is not a restaurant review column (although that would be fun) but it’s starting to get  like one. Similar to a boxer who has had one too many fights or a luncher who has had one too many drinks it is a subject that is getting a little wobbly on its feet.

However before I totally leave the subject of lunch I wanted to use a story that Spencer Campbell, a man with a memory like an elephant, reminded me of and being lazy I am going to quote his email pretty much verbatim. To set the picture there was an Aussie called Ryan Crowe who had come to London to find fame and fortune, missed both and ended up working in the Options pit for SeaGrayFosh and my birthday twin Jimmy Two-Names ( James Campbell-Gray) – a true legend in his own lunchtime. As Spencer narrates “One afternoon Ryan puts in a request to fly to Copenhagen the next Thursday to meet a client for lunch on the Friday and spend the weekend entertaining him. Upon his return flight he arrived at the UK airport only to be quizzed by the immigration officer on his working visa status! After checking through his bag they asked if they could read his diary, to which he replied “but of course” having nothing to hide! “What does working at the wine bar on Wednesday refer to here?” they asked! “Oh that, I help out a friend on Wednesday night as a favour, I get free drinks and can chat up the chicks” he proclaimed! “I am sorry Sir but that is a violation of your working visa for the UK and you will be deported back to your home country, Australia!” Since it was a Sunday he was unable to reach the firm and was then on an indirect flight to Sydney via Bangkok. After landing in Bangkok he managed to call the office and spoke to Jimmy Two-Names who said “where are you? You missed the open?” “In Bangkok” “Must have been a good weekend then” came the reply, laughter ensued! He explained and they offered to get lawyers on the case for a swift return, he turned down the offer stating he would have returned not long after anyway and went back to Australia for good!”

I had a very pleasant sojourn with an ex-boss of mine last week, Richard Reinert, where we discussed several plans but mostly reflected on some of the characters that we had worked with, or for, which encouraged me to reflect on leaders. As Bob Dylan sings where ever you are in the business cycle whether you are the lowest of the low serving your first boss or a high flying CEO serving shareholders none of us escape. Whatever industry or profession you have chosen you will get caught, even back to your school days, and the nature of your bosses from teacher onwards decides your life and enjoyment of it. Now that I am rapidly approaching my dotage I look back and realise that there are only two types of bosses, well in broking anyway, those that believe that their way or the highway is the route and the caring sharing type who hope to obtain success by employees wanting to please them.

David Buik, who I court favour with a photo of Johnny Haynes, was without doubt the latter and the best boss and mentor that I’ve encountered by a country mile. His embrace of an employee as a person hopefully softened some of my harder edges. It’s interesting to note that Jon Delaney , that I now work with was trained by John Ruskin who I trained and you can see some “ Buikisms” come through- third generation no less. David was and still is a great luncher in an era where lunch occasionally overlapped with corporate entertainment at sporting events, which is again now less common, and here the patronage of the boss would come into play. Indeed David Buik was very understanding (or was it controlled fury) when a dozen of us got out of control at Highbury. It was the launch of the new boxes above the North Bank and Arsenal were trying to sell one to Prebon and had gifted the evening, including unlimited booze to us. David knowing that we had a large Arsenal following in the futures team passed the invite to us. Unfortunately the box was directly above the away fans that had travelled down from Newcastle. I am still embarrassed at our behaviour and will refrain from repeating the car keys story. I say no more than the police were called, I was carpeted and ironically we bought the box. I suspect from guilt but never mind we made full use of it.


Bosses ,leaders corporate entertaining and indeed accountants are subjects I will return to but as I’m off to The Emirates with my Grandson shortly I better talk a little of the markets. The most unsurprising headline of the week was “ No government formed in Italy “  this saga will run and run and the longer it runs the more unsettling it will become with the two extremes of the political horseshoe attracting each other . The election in Hungary has seen a resounding victory for the anti-immigration right wing party led by Orban and spells trouble for Brussels .Meanwhile Macron is taking on the Unions starting with SNCF. Les cheminots are fantastically well paid and have jobs for life however if France is to move truly forward how the country reacts to this their Thatcher moment is crucial. Fifty years after the near revolution in France in 1968 it is a different country but the support for the reforms appears to be still split pretty much 50/50. Not only is this crucial for Macron at home but for his ambitions to be seen as the true leader of Europe, now that Merkel’s star is no longer in the ascendency, when the European parliamentary elections take place in May next year.

It would be really pushing it to believe that Trump is a caring boss and what feels like very basic negotiating tactics with China are starting to unsettle the markets. Let me be clear China has abused its power but only as it has been allowed too. By imposing harsher and harsher tariffs on China Trump may be just pushing his luck a little too hard and China will hit back. They are a country not known for backing down. Although the 2/10 US Bond spread steepened a bit last week a full scale trade war would not only seriously hurt stocks but could well push the world into recession. The thought that haunts me most is that some say it was tariffs in the 1930s pushed America into a depression. The stock markets feel very vulnerable and for those that follow the technicals they look very bearish.

As all good bosses and leaders know there is a fine line between encouragement and bullying and it’s a hard line to walk. Few people that I have worked with have achieved this mix and thankfully workplace bullying is now virtually non-existent. What is really sad is that even fewer politicians have been skilled in the fine arts of leadership in the years that I have been in the market. Chancellors of the exchequer have fared even worse but then none have behaved as badly as my old account Mike “Marigolds” Lee did and I will return to him next week. As they say a man deserving of a book to himself.

Four course lunches are bad for the digestion

You were the best in town
Just by chance you crossed the diamond with the pearl
You turned it on the world
That’s when you turned the world around

Becker and Fagen

I wrote last week about the demise of Directors lunches and the general shortening of lunch hours to err, well an hour . An hour at the desk eating a sandwich which really does nothing for your digestion or your client relationships. There are, of course days, when you are too busy to get out and then grabbing a snack makes sense indeed there were days on the floor of liffe when you just didn’t leave your booth. Those days especially in Winter seemed particularly tough when for maybe two or three days at a time you didn’t get to see daylight as you came in when it was dark at 6.30 in the morning , didn’t leave the windowless trading floor all day and went home at 6.00 in the gloom of a London Winter. Don’t get me wrong here, I’m not complaining just observing and there is not one old floor trader worth his salt who wouldn’t happily go back to those days.

The friendships that were born out of the constant socialising that we indulged in have lasted me a life time and as ive said before the major joy of writing these columns are the names that reappear. As if to illustrate this I was contacted by Andrew Linden last week. Now Andrew, Sapper to all and sundry thanks to his links with the HAC, and I haven’t seen each other for over 40 years but somehow he read my column. How did he find it? God knows but Sapper will reveal all in the near future I hope. Sapper, when I last saw him was an aspiring FX broker in, I think, the now long gone Dollar/Peseta market. I drifted off to futures and ended up as I am whilst Sapper now runs “educational” tours of London called  Perhaps he has contacted me as he wants to expand into a ? If that’s the case, Sapper, I’m your man.

In-lunches weren’t the only dangerous venues we encountered back when we were kings of the markets. There were several restaurants, at the risk of being repetitive, that are forever imprinted on my liver. Let alone pubs, but those especially  “The Bermuda Triangle” of The Deacons, The Green Man and The Mithras can wait awhile. Restaurants. Where do I start? From the Grill and Cheese in Throgmorton Street where I first learnt how to entertain from older brokers we progressed to the more lethal venues such as The City Circle where Richard Reynolds tried to control gay Tony and Big Val and the Paris Grill. Oh yes the original Paris Grill where ties were fair game. Seriously, if exception was taken to the tie you were wearing it was unceremoniously cut in half and pinned to the ceiling. I write this with trepidation as one of my colleagues with a good memory has his eye on a particularly nice tie of mine.

In my very early days wine bars were all the rage and Balls Brother’s must have made a fortune in Gutter Lane and Moore house along with the more traditional , now sadly all victims of the redevelopment of the City , bars such as Coates and the most lethal of all Capitaz where only dry biscuits were served as food. Eating dry biscuits of course had the desired effect of encouraging you to consume more and more wine. Of course things went wrong and colleagues got into terrible states and scrapes. Who can forget “Battling” Bill Hempsell constantly returning after lunch to the broker’s  office who had sacked him for directing the traffic in Moorgate ?Wrong offices returned to by great characters, but of all these misdemeanours the one that sticks in my mind was by a broker with the apt nickname of  Pondlife. If you met , you would know why he gloried in the name. Now one afternoon the character in question had way too much to drink in The Green Man and unfortunately had an accident in his trousers. Luckily he had his Trench coat on, which concealed the mess,  and he rushed into Austin Reed in Cheapside where he grabbed a new pair of underpants and trousers , pushed to the front of the queue and paid for them. He then dashed down to Cannon Street and jumped on his train home, retiring to the on-board loo he rapidly stripped off and threw the offending items out of the train window and opened the Austin Reed bag only to find that in his rush he had picked the wrong bag up and inside it was a jumper. It must have been an interesting conversation with Mrs Pondlife when he eventually got home naked as the day he was born under his treasured trench-coat.

The one thing I learnt about lunch was that a four course lunch, unless you count a Trou Normand as a course, was always too much food and would cause indigestion for hours after. Like an overfull luncher the markets are trying to digest some major issues and find that they too are starting to have trouble. At the moment they are presented with the full four courses and not a freshening sorbet in sight. The cash markets are still moving and the OIS spread still seems wide whilst Gold is in backwardation which I am reliably informed , thank you Spencer Campbell , that it is being used as a short term guarantee. Combined with the inference of flight to quality from the OIS spread this is worrying and it is to be hoped that it is just the internal battles at Deutsche which are causing this.

The tech sell off looks set to carry on as investors query the business ethics of the FANGS and there is the Spotify IPO hanging over the market. It’s hard to see how Spotify ever makes a profit but I guess the big guys in the music business need it to counterbalance Apple. Then there is Tesla who I feel will go down in history as the company that changed how we view cars at the same time as never turning a profit as the big auto manufacturers come to play. Sad for Elon Musk that he has expensively proved a business cae for others to follow. All the time the USD 2-10 yield curve flattens and points to a recession in 2019.

Finally, similar to an Eton Mess for dessert, Politics seems as fraught as ever. With much of France on strike , Italy still trying to form a government with two radical parties Germany arresting the Catalan leader and Trumps tweets now being seen as catalysts for market sell offs volatility looks like it’s here to stay for a while. Perhaps it’s time to dust off those old floor trader’s Doc Martins and  start those walking tours of great lunch venues ….but where to start and what to call the tours?

Richard Matthews, who began his career in 1973, is a former trader-broker in the London money, futures and foreign exchange markets. Twitter @dickiematthews5

This column is purely the opinion of the author and is not an invitation or recommendation to trade.

Long lunches are a long time gone




Long ago, Far away

These things don’t happen

No more, nowadays

Bob Dylan 1962

Johnny Jones, a lovely man and one of the great Pit Traders used to shout at 11.30 every day “Bars open Johnny” and still when I glance to the clock at that time I can hear him . 11.30 was the start of lunch my favourite word and my favourite meal. What a word lunch is. It conjures up a world of possibilities and host of memories and sadly now the memories of long City lunches are pretty all that we are left with. A world where the choice is between still or sparkling at the table, as if the places were occupied by fish, is a long way from the days where lunch started early , if you were in the barrel, with a Moscow Mule in The City Circle and finished with Kummel, Port or Madeira. But what days and I only wish my memories hadn’t been destroyed so much by overindulgence, however I will always remain thankful for those who gently prod the lobes and remind me of stories as Mike Tagg did last week.

One of the great joys of writing these columns is how friends from years ago call or email me saying “But you must remember ….” Ping goes the brain and I’m back and so is the memory. Now Mike and I go back several decades to the great days of City lunches, indeed when London ruled the markets and had scant regard for the U.S. opening, and his memory was jogged by my mention of Peter Shafto. I discussed Peter’s interviewing techniques last week which nudged Taggy to mention Peter’s wife. I would normally not be so ungallant as to discuss another man’s wife but in Peter’s case I must make an exception. Maggie , or Cookie, was a stunning South African blonde of fierce temper and one can only imagine the tempestuous relationship they had. Maggie was the cook at R.P.Martin at a time when every institution had Director’s cooks and dining rooms.

Lunch at Martin’s was unpredictable and certainly never dull whether it was Barclays Bank or London Borough of Camden being entertained they were lively all afternoon affairs. The senior broker would hold court and the wine would flow as if prohibition was about to start, but the real star turn was Maggie. Now she was from memory a pretty good cook with a winning smile and quick wit about her which was all good till you criticised her food. My God you were brave . naïve or foolish to do so . Or possibly all three. There would be a moment of silence and her whole demeanour would change and then the explosion of abuse occasionally culminating in the dish that you had criticised being picked up and dumped on your head. Salad or Soup it didn’t matter it was picked up and emptied on you. Now younger readers may be incredulous and I just wish I could remember the name of the dealer at AP Bank who was drenched in soup as he would verify this story and more!

It was not only the so called “in-lunches” that were so entertaining we would occasionally venture to the West End , more so in the 1980’s, where unshackled from the strict City behavioural codes and with a different audience the show would begin. Angelo , Maitre ‘D at the time at The Savoy Grill would turn a blind eye due to the huge tips would be a stopping point as would Simpsons and Joe Allens in Covent Garden . Further west there was, and is, a restaurant called  Monpeliano’s in Knightsbridge where an erstwhile colleague Adrian Scott-Jones, known as loopy to all and sundry,  used to really get into West End life. Loopy, was the maddest of all the people I have worked with. He almost certainly had Tourette’s but on his day was an incredible Dollar Deposit broker and there are many an unprintable story about him. God we were obnoxious and I’m not proud just thankful I knew when to stop, unlike too many of my colleagues.

Whether it was a City lunch or just a bunch of friends lunching at Langans, a venue with a lexicon of stories of its own , it has always been my favourite time of day. Indeed it was over a lunch in Switzerland that I fell in love with a girl who was to become my wife and being my wedding anniversary I better mention that lunch as my best ever ! Lunch, a time where the drudgery of the morning has gone and the excitement of the evening is just being thought of. A time to reflect and look forward and after this last week the markets feel as if they are taking a lunch break. Brexit seems like it’s on track and certainly in the UK there is at last an acceptance that we are leaving with less talk of a second referendum. Mrs May has had a good couple of weeks whilst the Labour Party seems determined to make itself as unelectable as possible. Elsewhere Dollar deposits remain bid,  increasing the costs of funding, and Deutsche Bank pays out huge bonuses to its staff. Not that I’m making any sort of connection there.

Drinking habits change, as do attitudes, but it does feel like the markets are digesting a huge lunch and have absorbed too much good wine. There are the signs of some ructions coming and my fear is that the markets have been partaking of too much Port and that all hell is about to break loose. Whether it’s Tariffs, Italian politics or some unseen threat that is the needle that finally pricks the balloon their feels like there is too much risk out there. As we approach a long Easter Weekend I think that it is worth remember two market catchphrase that have relevance this week. Firstly “long weekend –reversal of trend” and secondly the Tony LaPorta dictum “ Thou shalt not loss thy ass on a Friday “( or Thursday this week) . In the coming days I would recommend de-risking and squaring off on Thursday and use the weekend to take stock. And my best piece of advice?  A nice quiet lunch on Thursday in Langans. If that’s possible.

PS I do not, contrary to rumour, own shares in Langans.

A force of nature replacing old interviews

By Richard Matthews 23rdMarch 2018

As my index finger circles over the keyboard searching for the right letter, like a hawk looking for a field mouse my mind is often pulled out of the window to distraction. As my wife skips pretending to be a pantomime horse, to amuse our dog, I’ve noticed how quiet the world is this morning. A kind of hush has fallen and the animals have become hermits as a storm approaches. Not a spring storm but the last kick of winter is coming in. I love the excitement of a storm be it in the markets, in nature or just in daily life. Too often we drift along and accept life without thought or challenge until it turns round and bites you or in some cases just hits you firmly between the eyes.

As I sat in a boardroom on Thursday last week there was a hush as the combined executives waited to hear a presentation on recruitment. Recruitment. What do I know about recruitment? Personally I was interviewed by Peter Shafto, a Director at R.P.Martin in 1975, who simply met me in their boardroom , which as they often did then doubled as a bar/dining room. As this tall striking man walked into the room he simply got two glasses out, asked me what I liked to drink and on hearing Vodka, simply said in a cut glass accent, “I like a boy who drinks Vodka”. He then poured out an enormous drink , undid the knot on his tie and retied one end around the glass and used the other end of the tie like a silk pulley to guide the glass to his lips. I looked at him in astonishment and he said “If I don’t do that I spill too much. When can you start?” I started a month later and I’m not sure he knew who I was for a long time.

Forty years later I recalled this story twice last week once because one of the guys I started with strode back into my life Mike Tagg imaginatively nicknamed Taggy. Probably the only other survivor still involved in the markets who can recall recruitment policies like the one I’ve just described. I’m sure we had a trainee on one desk who only realised after a month that he was in the wrong office when he wasn’t on the payroll. He had come to the fourth floor on his first day instead of Simon and Coates on the third floor and we had accepted him in. I wonder if what happened to him? The broking equivalent to Paddington Bear. The other time, this week, I thought back to our old recruitment policies was when the force of nature Lee McQueen strolled in.

For those not familiar with the television show “ The Apprentice “ it is a talent contest that brought fame to not only Donald Trump but also to Lee who won the show in 2008???. His background is in recruitment although he without doubt would have made a great broker and he has reinvented the search for new employees and was pitching for a contract. He has several interesting ideas which not wanting to steal his thunder I won’t reveal apart from to say he really made me think. Does the employer chose the right candidate and does the employee chose the right employer. His processes are aimed at making the process more scientific, although they resemble a massive television game show they do make sense.


In the early days of broking in the interbank markets we just wanted to make money and enjoy life. I can her the refrain “I’m a money broker and I’m OK, I work all day and drink all night….” (The rest of which is censored) and it was true work hard, drink in Draycott’s and play harder. Our recruitment policies, and many still are, were based around hiring from the existing talent pool or the relatives of it. Some hires were impulsive like the ticket tout we hired at Refco, or the shoe shine boy that Salomon’s hired, these were based just on personality and drive. Personality and an ability for mental arithmetic which certainly Darren ( Dips) Cottrell , who loves to repeat the title of this piece, had both in spades. Unless the gene pool in a broker’s office is shaken up, thoroughly, you end up with too many similarities of style which breeds two things I can’t abide. Arrogance and laziness. I may be wrong but I would love to follow some of the youngsters that Lee unearths as I feel they will be exciting prospects in whatever career they chose, for sure they will have better training than I received which consisted of learning two facts. “Buy low, sell high” and “The secret of good broking is accurate quoting”, both great bits of advice but not entirely scientific.

The markets are sitting in a hush as well and one gets the feel that a force of nature is heading their way. Dollars  are still being searched for in the deposit markets and a story is going around that there are not enough dollars in the system to be repatriated and synthetic dollars are being created. Hmm sounds like a bit of scaremongering to me but the rates will go higher. Whether the OIS market is warning us of something nasty lurking around the woodshed I’m not sure as the CDS market looks quiet calm but none the less perhaps we will see a flight to quality currencies like the Swissy and Bill and Ben.

The observant of you will notice that this column isn’t published by Livesquawk anymore. Some new exciting opportunities have arisen and even at my grand old age I can’t resist a challenge. It seems apt in the same week that the truly great broker and visionary businessman Michael Spencer is considering his future that I do. Now I am not fit to be mentioned in the same breath as a man who has raised £140m for charities and been at the forefront of broking for three decades but it neatly allows me to close this column with a comment about him. I’ve been the other side of the table to Michael a couple of times and walked away happy, which is the secret to a good deal, but also I was under no illusion who was far and away the shrewder and brighter of the parties and it wasn’t me. Indeed I had several opportunities to work with him and each time turned the offer down for no other reason than I thought I knew better. On reflection I didn’t. So here is a little hint for the CME who are rumoured to be buying NEX. Remember in negotiations with Michael, if you don’t know who the sucker in the room is, it’s you.

Richard Matthews, who began his career in 1973, is a former trader-broker in the London money, futures and foreign exchange markets. Twitter @dickiematthews5    website:

The division bells are starting to chime.

Bells have always been important in my life. From the first bells I heard in my Teddy’s ears, called Rawhide for some odd reason, through the fact my dad was born within the sound of them through to the daily closing bell of the market they have always resonated. I started thinking of bells when I met up with two old colleagues indeed great friends this week. Not alarm bells although the assault I got from one of them certainly had me alarmed by the ferocity of his friendship. It was a story that they reminded me of that featured Bells. A stag party for a legend called Nelson who at the time owned Bellfinito held at The Belfry golf club, and a Pit broker nicknamed Dips. I should say now that Dips was called thus for his unerring ability for always buying the market dips and not the fact he could occasionally be dippy.

The full details of the stag are of course not fit to be published in public or even on my website but suffice to say copious amounts of liquor were consumed. The highlight of the tales was a story featuring Long, a very tall and very good spread trader, an empty bag of crisps and a lady of dubious reputation. I can say no more apart from it ended up with the shower overflowing as the resalted crisp bag blocked the plug hole. Or was it the clingfilm from the loo ? Sorry to dangle these details but those that were there know the story and those that weren’t…well you can always ring me. The part that really stuck in my mind was that of Dips who turned up at the party in disguised as a woman with a false nose,  female wig and of course fashionable high heels. Now consider that Dips is a Bermondsey Boy at least 6ft 4ins, with a voice more akin to Joe Cocker than the Queen. I hope you will have painted a picture of this great guy appearing. I hear you question why he had dressed up like this? Simply why? He had parted company with the broker the day before but was determined to attend the party and thought that the drag outfit was sufficient disguise.

Of course it was no more efficient as a disguise than Europe is using over the Italian elections. They, as I must say I warned, were a triumph of populism over common sense. It almost like horseshoe politics where the two opposing sides, simply left and right, join in the middle and find common ground over subjects such as immigration. Of course a country that is the birthplace to both Machiavelli and Leonardo the shenanigans in the background that will now play out will be hard to follow but will have a profound impact on Europe. With Renzi suffering a major setback and Berlusconi falling short it’s the new bambini, Luigi Di Malo and Matteo Salvini who hold the cards. Amongst all the horse trading that will take place, over many months, there is the spectre of the Italians running a parallel currency, based on THE ISSUANCE OF PERPETUAL T BONDS, to the Euro. What could possibly go wrong? Ah well as least Mutti is back in power, just.

The division between Southern and Northern Europe was, and is, always going to be a problem. If the North is epitomised by Luxembourg and Germany, where I visited this week , than The City of London also has problems larger than I had thought. Much larger. I last visited Luxembourg some twenty five years ago when I stayed with a broker friend who was locally famous for playing the piano. That is playing the piano so badly that the local Restaurants used to ask him to play at closing time to hurry people out. Whether his playing has improved I don’t know, as he has retired, but what I can report is that it’s a different country. Modern, open to do business and accommodating to anyone especially it seems those coming from London. The short, but frighteningly expensive Taxi ride from the Airport downtown was more than enough to convince me that the City has a problem. The infrastructure of institutions we are so proud of is also there for all to see and as you drive past every major financial institution all housed in gleaming modern office blocks the point sinks home. A different world to the sleepy backwater that it was. If you need further evidence just stand on the roadside for 15minutes and count the luxury cars. Easily as many as Knightsbridge.

Good news and bad news from Europe and a feeling from everyone that I spoke to was that it was a great mistake that the UK was leaving Europe and that it will be punished for doing so. Sad I’m afraid and if I was the other side of the channel I would take the same attitude. I do however feel that we are fast approaching the closing bell and that the UK will be left with little option but to walk away.

Whilst we gaze at our naval and fret over European fishing areas and the fate of the Euro important events are happening with the Dollar. Not just the potential impact on European car makers of Mr Trump’s impending trade war but the impact, that I wrote some time ago about, that the changes to the US tax system are having. I am not as great a follower of data as I was once was but two little snippets have caught my eye this week and both I think are reflections of the flight home of US Dollars. Firstly the USD LIBOR/OIS* spread has widened dramatically from 25 to 44 in the last week . Is this a sign of liquidity drying up in USD? Interestingly the Euro, Yen and other majors, spreads have stayed pretty tight. As commercial paper is sold to enable repatriation of funds there has been a flood of attractive T-Bills to finance the US government which has acted as a carrot at the same time that the Fed is pulling back from QE and rates are edging up acting as a stick.

This alone would be seen as a solo cloud on the horizon but the HKD has taken a pounding and is at its lowest level against the USD for 33 years. The HKD has been pretty much pegged to the USD for all those years so a meaningful move is of interest and whilst HIBOR has weakened the carry trade has widened to 103 basis points the widest since 2008 what could possibly go wrong? As the repatriation of Dollars gathers pace there will be more spots of local difficulty and the challenge will be joining the dots quicker than anyone else to see if there really is an impending crisis. For sure the dots that are already joined are looking like a bell but it’s certainly not one from a Rawhides ear.

The LIBOR/OIS spread is the difference between LIBOR and the Overnight Index Swap which oftentimes is based on the Fed funds rate. This spread can be read as an indicator of a flight to quality as the spread widens commercial paper is being shown as increasingly less attractive than Government paper.

General Tariff and his trade troopers are on parade

Arbitrage. To me a lovely sounding word, a woody word as some would say, with all sorts of possibilities and I love the way that the word turns to arbitrageur to describe someone who partakes in the business of arbitrage. I first learnt about arbitraging from a lovely, if somewhat eccentric, man called Hugh Newcomb who was a director at R. P. Martin and would come up with the most extraordinary ideas to create profits. One of these was to watch the contango on Copper and when it steepened too much we, the money brokers, would pile in and correct the price. The commodity markets couldn’t always take the volume as we would have, oftentimes- someone like Barclays looking to lend three months deposits and the volumes on Copper were relatively small. It didn’t really matter though as we showed we thought and looked sideways. Hugh was also famous for sporting the most extravagant facial hair in a style that used to be known as Bugger’s grips and probably the least said about that the better. Oh and nearly bankrupting The Scottish Co Op but that’s for another day.

Arbitrage has been in existence for as long as markets and came to the fore again in the early days of the futures market. The Euro Dollar price in London was 25bp different to the price in Chicago. For the life of me I can’t remember why or which traded at the premium, and be quiet in the cheap seats I did know once.  All afternoon half a dozen brokers would sit on the phone to Chicago trying to take advantage of this spread by putting on positions when the market moved out of line and unwinding when they came back in. Maybe making two ticks as they did so and alongside the profit it also created volume in a fledging market. Despite the fact it drove the Euro Dollar locals mad as I tried to get orders filled and distracted from their personal positions it made profit. I whole heartedly apologise to Tony, Welly, Bucky and the rest for being a pain.

I started thinking about arbitrage after hearing President Trump announce his decision to impose tariffs on Aluminium and Steel this week. I guess it was the price differential in those markets that made me think about this and how they really are imperfect markets. The shock that greeted this announcement was surprising as Trump has stated ad infinitum that his plan was to make America great again and he does appear to be a man of his word, politically at least. It also, as importantly appeals to his heartland vote. It will be interesting to see whether this ban benefits the core voter or harms the Auto industry more. An Auto industry that has been dependent on cheap aluminium and has exceedingly complex cross boarder supply agreements that will be damaged.

At first reading the tariff imposition was aimed to benefit his blue collar vote. Look beyond that and at China despite their exports to the US in Steel and Aluminium are pretty minimal this is an opening shot. Is it a coincidence that the come in the same week that President Xi has pretty much appointed himself Emperor Dictator for life? I think not. China looks like they, as always, are playing a longer game. A game that involves helping North Korea  as well as “investing” heavily into the Philippines in exchange for a “peaceful” expansion in the South China Sea’s islands. China is with these moves as well as the construction of the new Silk Road threatening American dominance economically and militarily and this is what Trump is reacting to. In a further announcement President Trump tweeted on Saturday that European tariffs on US cars were unfair whilst they can export unhindered into the US which would damage the already beleaguered Volkswagen group and by association its German Banking allies. The Hausfrau has put together a coalition but if German car makers suddenly lost the UK, an uber-hard Brexit could cause this, as well as the US markets, German Banks would come under increased pressure and further questions about the viability of the largest would be asked.

Prior to Trump’s announcement on Saturday regarding European Car makers there was a chain of thought that he may well retreat and that he was only sabre rattling. I’m not so sure now and my mind goes back to the attack in Davos that he made on Europe and their attitude to the US. Barnier and cohorts may find that the UK appears an easy country to bully. His latest tactic is to orchestrate a collection of has been and never weres as a fifth column, it is almost insulting to the intelligence. I mean really who apart from European leaders think that Blighted Blair or Major, at his most creepy, are anything other than discredited busted flushes? Trump and The US are a different matter as not only does Europe rely on the US as a huge export market it also relies on The US to protect it with disproportionate contributions to NATO and as such will find the US much harder to negotiate with.

The imposition of trade tariffs was made under the auspices of National Security which seems extraordinary whilst for all intents and purposes I fail to see that The US is at war. As a second guess, not always easy with Trump, this was the only route that he could his wishes through. How the WTO react will be crucial as if they accept the move it means that any country could in theory site National security as a the reason for tariff imposition. As in all wars the escalation to an all-out trade conflict could be quick and damaging to the fragile recoveries that we have seen. Previously we saw Bush and Obama implement limited anti-dumping rules but nothing like the imposition of a 25% steel and 10% Aluminium tariff.

I thought I had seen it all, apart from World War, in my decades in The City. I’ve heard the rattling of sabres before over trade but this time it feels like they have been sharpened and the troops sent armed with them to the stockade. The message will be heard loud and clear across the world and must worry his neighbours such as Trudeau. However seeing him parade his family in India like extras from a Bollywood film one wonders if anything concerns him, certainly not image. These are worrying times for world trade and as a consequence the fragile economic recovery that we have seen and by association the stock Markets. I wonder with the 2year 10 year yield was telling us something back in December and will it now invert portending a recession? Sadly I feel darkness is drawing in and only history will tell if it’s for a lifetime or it’s just a short night time. Hey ho perhaps I should retreat to my youth and spend the afternoon in The Arbitrageur for some cheer……

It ain’t what you do but it’s the way that you do it .


By Richard Matthews February 26th

Normally when I publish, writing that word still gives me a huge buzz, a column I like the feedback that I receive. The reactions are normally pretty good and most often are just people disagreeing with the view I have. Now that’s OK, as when I set out to write my aim is to make people think , to question what is going on around them . This week however I received more comments than about anything else I have written. Nearly all friendly, some very amusing and some unprintable. Not unprintable for any other reason than the comment or story contained, how shall we say it, factory floor language. In a world where most programmes have a viewer warning concerning everything from, nudity , flashing lights to outdated attitudes it is refreshing to remember a simpler time when you could call a spade a f*****  spade and not offend . This is not to say that we never offended anyone and as we would say they (normally) got what they deserve and it is hard to imagine how we would have survived the pressure without venturing into some eccentric behaviour.

The stories that I was reminded of are a testament to the fondness that Andy is held and before I move on it would be remiss of me not to give a flavour of how we worked and also engage with another Liffe legend. There can be no argument that we broked under pressure in a challenging environment, the ringing in my ears from Tinnitus reminds me every day of this. The pressure would mount gradually till every participant be they brokers, fillers, runners or observers just wanted to get the trade done and move on. We as brokers just wanted orders of round large numbers which were easy to signal in and let’s be honest easy to remember. To encourage this we would threaten clients that if their order wasn’t big enough it would go in the draw. Unwary clients would ignore this advice and subsequently find out what “going in the draw” meant. The phone receiver would be unceremoniously thrown in the draw which would then be slammed shut four or five times. After this the phone was recovered and whistle blown down the microphone. The noise must have been horrendous and imagine it being relayed round a dealing room on a squawk! All because the dealer, more often than not a trainee, had had the temerity to issue a small order. In other words he dared not to pay us enough.

Andy and I worked together at a company called LCF the acronym most accurately translated as Lose Cash Fast for those of us learning to trade, although there were some less complimentary versions which I won’t go into .The company consisted of outcasts from every market in the City. The characters are just too many to cover off in one go but suffice to say a company with an accountant, a lovely,  lovely man now sadly passed away, who would fit straight into a 1970s caper such as Minder , was an extraordinary place where the commodity and money markets overlapped . We used to joke that if we had company cars they would be magic buses – practical but outrageous with constant arguments over the fares. Many of us passed through LCF and I still remain friends with quite a few and one or two who read this column. It was in fact one of, if not the first, of many companies started to enable locals to trade. Out of the many Locals that went through its doors there was none more aggressive and hungry than Terry Crawley better known as Terry the Till.

Terry, from the very first time I asked him to execute orders was different. He wanted to win and as you can expect by his moniker win he did. He would stand alone with no backing paper taking the largest banks in the world on in the BTP pit. I later became friends with a day trader who used to trade BTPs for Nomura who was full of admiration for how big Terry’s cojones were. Towards the height of his fame a profile of him was written up in, I think , The Evening Standard describing his abilities and making a guess at his earnings …something along the lines of “ Former carpet fitter from Bermondsey becomes millionaire”. It may have been more accurate to say each month he added another million. Talking to him shortly after the article, actually listening as you didn’t really talk with him, he described how he had got dozens of begging letters before describing how one guy had written asking for his tools from his former trade as a carpet fitter . He was outraged that anyone could expect him to give something away even his old carpet fitting tools. I do however think that this was faux outrage because he was and is a decent guy and I wager the guy got his old tools. I better say that as my step-son caddies for him at Queenwood!

Terry would swear with the best of us and when fined £1000 for using the F word in the pit he would get £5000 , or five bags as he would say, out of his pocket and repeat the F word another four times before throwing the money at the pit observer saying “ That’ll pay for five” . What would he say now as the elections loom in Italy? I suspect something similar and it’s interesting to note that there are some large shorts in the market although when a hedge fund announces he is short it oftentimes means he was short and is now covering. What could go wrong in Italy a country with a dark heart where appearance matters so much but also a country that’s not known for its political stability? And as I write this the outlook in Germany is still uncertain. Uncertainty is what we love and it could be about to increase some more. The European elections last year just about scrapped through a semblance of normality, despite strong showings but “populist” parties and the markets are expecting normality to continue. Will it? I have a sneaking suspicion not but Super Sunday will decide by which time the standoff in the US 10year may also have been resolved and the shape of the yield curve determined

Elsewhere in Europe everything looks good. Well it does if you ignore the upcoming Spanish pension crisis, ongoing issues in Catalonia, Latvian corruption scandals and the reality that Brexit is going to hurt a lot of net takers , oops I mean beneficiaries, and no one really knows how to fill that gap. Dangerous times and one of the more surprising movements is that Bitcoin and other cryptos have held pretty good and there is talk that they are replacing gold as safe havens, personally I think that it is too early to say that but I am surprised how resilient that they have been and from a personal note how much interest there is in them. Oh and I did get paid on my trade so I am more enthusiastic!

Characters from the old markets are increasingly replaced by machines and the emotion and humour disappears. I’m glad to be old, it was my birthday this week so perchance that’s why I’m looking back to a time of meritocracy where a carpet fitter could become a millionaire trader by living on his wits and aggression. A simpler time when your accent, race, religion or sex didn’t matter and was not politicised. I’ve been looking back to a time when brokers would walk into a bar and order 6 pints of beer for one nervous guest. I’m looking back but also looking forward to an exciting new venture and some serious market volatility in the near future.

In the land of the blind the one eyed is ki


I live near Romney Marsh and my wife and I delight in taking our dog, Pepper, for walks along the nearby beaches especially in winter when they are all but abandoned by tourists. There is something Dickensian about the marshes and you half expect to bump into a latter day Abel Magwitch. We chose different parts of the coast depending partly on how hungry we will feel by the end of the walk and what will available to tuck into. Along Pett Level, near Rye, the beaches are deserted and the tide goes way out. The main attraction though is not the beach or its deserted beauty but a pop up restaurant called The Red Pig. A pop up restaurant with a difference mainly because it is run by an old broking partner, Andy Forbes-Gower.

Andy was one my first true broking partners in the futures market, a renegade with a renegade’s brain and outlook on life. If the whole world said the market was going up he, often correctly, would call the market down. Whether this was for the sheer hell of it or some inner intuition God alone knows, and as my mum would say he ain’t telling. We spent several years drinking, working , drinking and drinking some more and made several hilarious business trips to Dublin ( there is a year’s worth of stories on those trips alone).The markets were a different world in those days and we would enjoy long loony lunches together often followed by a wonder back to the floor whilst singing . I’m not proud of my behaviour but it was on reflection just boyish enthusiasm. Some days we staggered back after several hours of beer and would be unable to focus on the numbers on the screen. Andy inevitably would cover one eye with his hand, to help focus , and declare “ In the land of the blind the one eyed is King “

Beware the Ides of March

Often the markets are blind and not even seeing the reality that a Cyclops could spot. This weekend May and Merkel get together to discuss the future of Britain’s relationship with Europe post Brexit. But why? What’s the point? Merkel is so badly wounded it is unlikely that she or her proposed coalition will survive beyond 4th March and yet Mrs May feels it necessary to pay her homage for one last time. Yet if you read the UK papers you would not get any sense of Merkel’s vulnerability. Ah the 4th of March if only the Italian elections and the German vote were eleven days later, The Ides of March cliché could be wheeled out! Italian elections are elections of a complexity that only a country of Machiavelli’s birth could concoct. I’m not going to predict anything beyond the normal political chaos that involves both a comedian Bepe Grillo and Bunga Bunga Berlousconi. Really you couldn’t make it up yet Italy has dire immigration problems with over 600,000 immigrants settling in the last four years leading to a recent violent neo-nazi outrage in Macerata. Take that and combine with these statistics: unemployment of 11.2%, youth unemployment 32.7%, growth still 6% below pre-crash levels and 12.7% of families living officially in poverty. Add a soupcon of a fascist leader in the recent past and it’s a heady cocktail. The political odds looked stacked against Renzi but Italy is always surprising and may yet be sensible. All this in the Eurozone’s third largest economic area.

I do love Italy very deeply as a country and its people and I know that they are strange but please don’t change .Meanwhile little Nappy Macron sails on serenely believing for all he can his own publicity. With approval ratings dropping to below 50% and relatively little change to labour laws France is still stuck in a time warp. Again if you read the MAINSTREAM (?) press all is great and no mention of the recent elections in Corsica where the nationalist parties have made great gains. Now not to belittle Corsica it is not of overriding importance to France, in general, but remember the Scottish Nationalists and Catalans. Small problems at the outsets that became and are still major irritants. Gad about with the world princes all you like but don’t ignore nationalist problems at home as they will not go away.

If it was only Germany, Italy, France and Spain with problems Europe would be looking good. Wouldn’t it? Yeah right. It is however worse as the Eastern block of Poland Czechoslovakia and Hungary are still causing problems with their right wing agendas. I am not going to dissect the rights and wrongs of what is happening politically in these countries but it is happening and it is unsettling

Barnier, Juncker and the rest carry on as if they have all enjoyed a really good lunch with Andy and me at the Red Pig (by the way bring your own case of wine as it has no licence). Britain must be punished at all costs to discourage the others and every last penny should be extracted from the UK to enable them to carry on steering the ship of fools that Europe has become. Look at the overall picture and it is one of barely concealed chaos. As these stories unfold the spreads between European instruments are going to be interesting. Who is now the strong man of Europe? It’s a brave man who calls the price action on BUNDS over BTPs!

Maybe the crypto kids are right as so many of our traditional instruments look toxic there seems to be increased interest in these new markets. Whether it’s because of my background as a futures broker, dealing in things that don’t exist and will never be delivered, I am finding increasing interest from some serious players in the crypto markets. Hands up I’ve brokered some deals in Cryptos which is very satisfying. It would be more satisfying if my commission had been paid but I’m sure it will or someone will be featured in next week’s column! Now this is not me changing tack but just tipping my hat towards them and from someone who started with a book and pencil the joy and wonder of still being involved is fantastic to behold. As Andy also used to say when markets were particularly volatile “it looks like the lunatics have got control of the lift in the asylum”.

This one is for you Andy –never change!

The Red Pig is situated in a layby near Pett Level and is open only at weekends highly recommended if you fancy a hot drink, good food and an even better chat!

The Carnival is over

Knowledge is the power that interlinks the markets

All the facts are there but can you see them ?

By Richard Matthews February 4th 2018

I like to read, actually I like to read a lot and I am not too fussy what I read. Newspapers, Social media, information leaflets; you name it I will pretty much read it all. Well of course everything apart from an instruction manual as, of course I know best how to do everything. Which I will prove later on today when I construct an ambitious Lego toy with my grandson Joel. Not only will he end up with an incredible new toy but he will have learnt a new acronym RTFI. He won’t have learnt what it stands for as he is, as of today, too young . For those of you that don’t know what it stands for a polite version is Read The Friggin Instructions. Signs, hints, runes or tea leaves call them whatever you like are the instructions that we all read and interpret differently for trading signals.

If you read and take any serious notice of social media apart, from the jokes, I would have genuinely questioned your intelligence till recently but having seen clear trading signals in the last week in some of the more outrageous claims on Cryptos I wonder if the Twittersphere, or whatever you wish to call it, should at least be taken a bit more seriously as a contrary indicator? Increasingly there have been the “now is the best time ever to buy” Bitcoin articles. Hmmm….Long and wrong comes to mind and as time progresses ever more desperate claims have been appearing. I blow hot and cold on Cryptos , I will call them currencies when I can buy a Mars Bar with them , but I have said several times that most Cryptos are without doubt a bubble that will fade before revealing its fortune. Bitcoin has gone pop and it now has entered territory which will really test it. An old friend wrote recently that you never forget your first fast market, which is true but your first fast bear market? Now that is memory making.

I love the smell of fear in the morning

It is widely assumed in the mainstream press that brokers and traders make no money from bear markets. This may be because the classic “ head in hands “ broker snapshot is so emotive but the facts are that to most of us it doesn’t matter whether the market goes up or down any direction is better than sideways. I loved a bear market as the fear of losing is somehow stronger than the fear of not gaining and having started out and grown up in the great bear markets it was those that I learnt to trade. Which one of us can remember filling buy orders and their associated stops at the same time? Horrific conversations at the time but non the less memory making. Of course markets are easy when they just go up – we can all buy things but in every walk of life the real art is selling as the crypto kids are finding out. And when you are long and wrong the inexperienced investor panics. And last week I saw panic in the Bitcoin market and possibly the start of an old fashioned shake out in equities and Bonds.

Some will say that here may well be some rebalancing of “ portfolios “ from Bitcoin to Etherum and  to Ripple ad infinitum but that does not explain the steepness of the falls and as always is it the chicken or the egg coming first . There have been several articles written by much more astute observers than I about the inverse correlation relationship between the Vix ( the fear index) and Bitcoin which briefly shows that as the Vix rises the value of cryptos fall and indeed there does seem to be some truth in this as there is a relationship between all markets . Last Friday evening the Vix closed at 17.31 as the Dow lost 665 points whilst the 10year Treasury yield hit a three year high of 2.8%. Fridays are difficult days as you will often see small reversals of the week’s trend but it did appear that we were seeing little more than profit taking and with some reports suggesting up to $300Bln has been lost in Cryptos we may be in for a real shake out in all markets, which rising Bond yields will only hasten.

A wobbly week in all markets and it will be interesting to see whether Mark Carney is a little more reticent than perhaps he was thinking of being on super Thursday when he announces the latest monetary policy settings  and quarterly inflation report (QIR).There was a thought that a more hawkish stance may be a taken as inflation appears to be stubbornly high  and with the Fed looking likely to raise rates sooner rather than later. Now that would make sense if the Bank doesn’t want to import inflation from abroad but with the economy still not entirely out of the woods in the UK he may just hold fire for the time being but it does appear that we are getting closer to the UK’s next hike which is reflected somewhat in the strength of Sterling . In short Carney will live up to the spirit of the Carnival season  – and we may all eat and drink for a little longer whilst being mindful that lent is coming. (Ouch. I couldn’t resist trying to put that pun in and for those whose Latin is even more basic than mine Carnival is a bastardisation of Carne (meat ) Vale ( OK ) reflecting that we can all eat meat a little longer before fasting.)

It looks like that the real trading for the year is starting to take place after the jousting of the early January weeks and if the carnage , and believe me there is some carnage , from the Bitcoin debacle spills over into the Stock Markets and vice versa there will be blood on the streets. I often hark back to my early broking days and try to remember the sound advice (as well as the not so sound advice) that was given to me. Keep your mouth shut and your ears open is perhaps the best advice that I heard but now I would add keep your eyes open .Reading social media, constructing Lego models or studying charts all have the root in the same desire of knowledge and boy are we bombarded with constant information and staccato signals. The pieces are all there you just need to RTFI, oh and have a little luck.

Richard Matthews, who began his career in 1973, is a former trader-broker in the London money, futures and foreign exchange markets. Twitter @dickiematthews5

This column is the opinion of the author and does not necessarily reflect the opinion of LiveSquawk.

The forgotten cries of old London don’t echo in Davos


By Richard Matthews January 31st

Dealing rooms were always meant to be noisy and that was always the attraction of them to me. From my very first day I loved the shouting and the laughter, in short I loved the buzz. A room of 400 or 500 traders or brokers banging phones and shouting seemingly random words was and still would be heaven. “BundBobleshatz” from one desk, “Cable in fifty” from another and the triumphant “you’re wearing them “. Brilliant fun but sadly those shouts are being confined to history  by electronic trading and in history books they will soon reside along with the street cries of old London. How many of you remember the newspaper sellers calling “Starnoosstannerd” or “all the winners” trying to tempt you into paying for the Evening Standard (or the other papers The Evening News and Evening Star) on your way home? I suspect not many of you recall the newspaper sellers but hopefully some remember the cries in the dealing room….many of which I can’t put into a written piece without getting censored!

I hear the cries oh so rarely these days and normally uttered by a colleague as he tries to impart some excitement and urgency into his young team of brokers. There is still noise, oh yes but of a different kind. The constant babble of the TV in the background is there but in the end the sheer repetitiveness of the rolling news channels becomes an irritant. Not the news or the presenters, although some do grate after five minutes and I am much too pleasant to name names, it’s the adverts. The News cycle changes, the interviewers and interviewees change but the adverts do not. The same jingle, introducing the same asinine message, hour after endless hour. At least with the old cries there was a randomness to them both in time and content that kept you aware but not anymore. This last week more than most I’ve kept an ear cocked to the TV channels to hear what wonderful pearls of wisdom were being uttered by the great and good in Davos.

Davos the conference where a Marxist ( John McDonnell) will happily attend paying upwards of $50,000 for the privilege and then $1200 a night to educate the world’s thinkers that the problem in Venezuela was not one of socialism but one of not enough socialism. An interesting thought process. But then I guess if I could get the taxpayer to fund me attend this giant party I would be there. It was however a slightly different jamboree this year once Donald Trump appeared, and let us be honest stole the show. Like him or loathe him he is the world’s most important man and he does, clearly, enjoy being so. Despite the seemingly randomness of his tweeting he is getting on with business and again declared that America was open for business. It amuses me when I see the righteous indignation of Europe at his effrontery in saying this. I mean France doesn’t look after France first and neither does Germany. Well they do, they just aren’t quite so upfront and open about putting their countries first.

Each time I glanced up to the screen during the week there was yet another member of the elite be it a youthful Jamie Dimon or Larry Fink chief executive of BlackRock being interviewed in what looked like a set from a Christmas cake decoration shop or one of those model shops I loved as a kid selling miniature snow-capped trees as I tried to make my model railway more exciting and appear to be going through The Rockies. The babble turned my mind to consider and have another look at forecasts around the UK and US economies and see if I should be listening or watching something more illuminating. I wrote recently, at the turn of the year about forecasts and whether the forecasts were worth the paper they were written on. At the bottom of this column there is a table of forecasts. I am not economist by any sense of the matter and some would say I am much closer to a monkey with a dartboard when it comes to economic forecasting. But what to me comes clear is the disparity in forecasting the UK economy and the US , for example Mme Christine LeGarde , the hint may still be in the name , and her highly paid academics at the IMF were pretty much on target with the US forecasts but in common with most forecasters were miles off target with the UK. Is this because of a deeply held bias against Brexit or because the US economy was easier to forecast even with the unproven maverick Donald Trump newly in charge. Looking at these numbers the only link is that they were universally awful forecasts for the UK and pretty good for the US. Taking a further hike down forecast avenue I wondered if the US economy was easier to call then the year end closing price on the S&P would be relatively easy and did a little research on some of the top US houses on this. Wrong! Look at the table.

If economic forecasts are so flakily I wondered if it was worthwhile taking a more generalist approach to the jamboree and try and get a “feel” for what is concerning the uber powerful. It feels to me that there was a certain smugness at the economic recovery that we are enjoying which, let’s face facts, is being driven by ultralow interest rates and QE. If as rates start to edge up and QE dries up the economy stalls we will then need to see how clever the great minds are. Some worries over the power of the FANGS were expressed and time will tell if they start to get their houses in order.

As I wrote earlier Trump stole the show and in a TV interview with his friend Piers Morgan broadcast on British TV he gave, to my mind, the most interesting interview ironically to mainstream TV and shown on a Sunday evening .In an interesting dialogue, as you would expect, he reiterated the strength of the American economy, was warm towards Brexit and critical of Europe who he thought, had treated the United States very unfairly when it came to trade. Trump said “I’ve had a lot of problems with (the) European Union, and it may morph into something very big from that standpoint — from a trade standpoint.” And he continued “(The European Union) Had done many bad things to the United States”. A clever thought provoking interview but as you tend to get with Trump one that gave the impression that America is open for business if you want to do business on his terms.

Apart from the sabre rattling from Trump there was little out of Davos to get really excited about and four weeks into the New Year I hear a new call …get the monkey a dartboard. The betty is already busting the forecasts of “it won’t go above $1.40 as that’s its natural high ….. Where does this leave us all as traders? I am not saying ignore predictions but just put them into context and question whether the bank/ organisation making them has an ear of corn to grind or whether they really are independent. Secondly as, if not more importantly, watch the flows and stops . If a price has had a ceiling of, say $1.40 for a long time just be aware that there will be stops around the figure … “roundaphopia” I used to say, and that there will be increased volatility as we break on through as witnessed by sterling last week. The market doesn’t lie as for politicians I’m not so sure. Maybe Trump is different, but then Trump isn’t really a politician.

By Richard Matthews November

Richard Matthews, who began his career in 1973, is a former trader-broker in the London money, futures and foreign exchange markets. Twitter @dickiematthews5