Archive for May, 2010
Once Upon a Time in the Pits: ‘Floored’
The movie ‘Floored’ was brought up in the chat room today by T. or maybe G., so I looked it up and watched the trailer and I thought to myself… “In light of the Greek crisis and the “Mystery Plunge” recently in the “safe” electronic exchanges, will the floor trader make a comeback?”
There’s no telling, but probably not and there’s a sadness in that.
Here’s a review of ‘Floored’ by Jacob Bunge of Dow Jones Newswires with a link to the trailer at the bottom.
CHICAGO (Dow Jones)–The Gene Siskel Film Center transformed into a trading pit Friday night, as Chicago’s derivatives trading community migrated from the floors to the theater for the premier of a documentary on the vanishing business.
The screening of “Floored,” a film chronicling the glory and subsequent decline of the art-cum-bloodsport honed in the pits of Chicago’s exchanges, drew a sold-out audience that included traders, local celebrities and combinations of the two.
“You could come in and get rich overnight, or you could lose, but there was opportunity,” said Rick Santelli, a CNBC Business News commentator and veteran futures trader who broadcasts from the floor of the Chicago Board of Trade, at the screening Friday. “It’s a bittersweet story.”
The film, a three-year project by filmmaker James Allen Smith, tells the pugnacious tale of futures and options trading through the clerks, brokers and market makers that helped transform Chicago’s exchanges into a global center for managing commodities, currencies, interest rates and stock options.
Set against a backdrop of garish trading jackets and a soundtrack of shouting, past and present floor traders in the film wistfully recall the days when fortunes were made and lost daily in Chicago’s pits, a story replete with drug abuse, wrecked marriages, crippling stress and the occasional fling with a Playboy Playmate.
In their mid-1990s heyday, according to Smith’s film, 10,000 traders packed the floors of the city, a number that has since dwindled to about 1,000 as the rise of electronic trading supplanted the pits as the key source of liquidity in derivatives markets.
If there is a villain menacing the swaggering heroes of “Floored,” it is the computer, described alternately as a “virus,” a form of “cheating” and a “vile invention” by the steadily shrinking ranks of those committed to the open outcry profession. A portion of the film highlighting Chicago’s burgeoning electronic trading shops drew grumbles and jeers from the audience.
Some floor traders like Joseph Gibbons, one of the film’s producers, successfully jumped to screen trading, a realm that “Floored” depicts as no less intense or profane or profitable–but far less visceral than the pits, where spittle flies and the competition to buy and sell occasionally turned physical.
Beyond the usual shoving and poking of pens, traders in the film tell of fistfights in the plaza outside the Chicago Board Options Exchange and one incident that ended with a trader biting another’s nose.
“We were warriors, but we were also a great community of friends,” said Scott Cole, who described floor trading as his family’s business, at the screening Friday.
They are also a group clinging to a diminished slice of the American dream that allowed blue-collar Chicago kids, many possessing little education beyond a high school diploma, to make a living on par with doctors and lawyers–at least for a while.
“It’s a story that needed to be told,” said Kenny Ford, who still works the cattle pits, where electronic trading has yet to render the floor obsolete. “This was the greatest time in our lives.”
-By Jacob Bunge, Dow Jones Newswires; (312) 750 4117; jacob.bunge@dowjones.com
Here’s the link for the trailer http://flooredthemovie.com/community/?page_id=11
‘Global debt is a holocaust waiting to happen.’
Here’s a partial reprint of a great blogpost by the eccentric Stuart Wilde about the Greek crisis…be sure to check out the Greek lifestyle snippet from BBC’s Malcolm Brabant at the bottom…
Greece lied for ten years about their accounts falsifying their books essentially defrauding banks that lent them money, and their Eurozone partners.
Then the ‘souvlaki hit the fan’ and short-term interest rates to Greece jumped almost overnight to a prohibitive 23%, everyone else in the Eurozone pays 3%. Lenders wanted big returns to lend money to big liars. Greek creditworthiness is lower than that of both Lebanon and Guatemala.
The Greeks are very sweet and their country is very pretty but the Greek crisis is a spiritual crisis, one of importance as they paid themselves fancy benefits and pensions and they embarked on billions in military spending and infrastructure projects that they couldn’t pay for. Now they want the people in the Eurozone that they defrauded to give them 110 billion to escape total breakdown.
Portugal is in trouble and so is Spain where unemployment is 20% and the UK has an even higher debt ratio than Greece. People in the UK on welfare with kids can get between £5000-£8000 a month tax free in housing benefits and cash allowances, it’s handouts gone mad.
Average wages in the UK is £531.00 a week then tax is taken from that, most workers take home between £1300-£1500 a month after tax, so the system is ludicrous. It feeds the addiction of entitlement and it encourages welfare tourists to the UK people that come from other poorer countries in the EU to sign up for the cushy life on the British glucose drip. The insanity has to crack in the end as Government has to borrow money to make these mega-handouts, it now owes almost one thousand billions pounds.*
Greek wages will gradually be cut 30%, it will hurt the workers terribly because Greek prices are already very high, but even such a cut will only be a small blip on their total debt screen. Greece can’t really escape total collapse. They aren’t going to do ‘horsebox’ willingly, but it may be forced upon them. When people’s importance is assailed they go a bit nuts. I feel very sorry for the Greek people but the wages of importance lead to collapse and extreme poverty.
Contagion in financial markets is fancy word for the ‘knock on’ effect, as more and more global lenders get scared as they wake up to what dodgy loans they have placed on their books; real estate, corporations, Governments, no one is going to pay in the end, interest rates will rocket. There is not enough money in the world to bail everyone out. It’s the Grand Lies coming home to roost.
Greece is the tip of a massive global mountain of denial, swelled egos, and feigned importance; smoke and mirrors accounting, government fraud and criminality that will come down like a house of cards over the next year or two.
And as far as the UK goes…
The UK can’t default on its Government debts as it is not in the Euro, so the UK Gov’ can print as many pounds out of thin air as it needs to. Of course, the value of the pound will tank, but they only have to look honest, they don’t actually have to be honest.
Here’s the funny snippet from the BBC correspondent in Greece.
Malcolm Brabant BBC News, Athens
On Planet Greece, some civil servants get a bonus for turning up to work on time. Foresters get a bonus for working outdoors. At least they show up.
There are civil servants called ghost workers because they never go into the office, they head to a second job and still claim a state salary. They can’t get sacked, because a civil service post is for life. Unless the incumbent decides to retire in his or her forties, with a pension.
And the government can continue paying for the afterlife.
Unmarried and divorced daughters of civil servants are entitled to collect their dead parents pensions. Another lucrative sinecure is to belong to a state committee. The government has no idea how many there are.
It has been estimated that they have 10,000 employees and cost nearly £200m a year, and that includes the committee to manage a lake that dried up 80 years ago.
