"I quit and I am taking Peerless with me"

With Christmas Season comes the usual array of Holiday Parties. Always a good time yet some people tend to drink way too much and all the secrets of the past year come spilling out like Britney Spears' tits during a wardrobe malfunction. Peerless' father once told him that more people get fired because of stupid things that transpire at Christmas Parties than any other reason. This statement is true for the most part. Peerless has witnessed wives of co-workers get into fist fights with other girls who the husband had gotten to know all too well during the past year. He has also seen co workers get into fights because someone is way too drunk and someone trying to playfully cut up the other person gets out of hand. Once, Peerless even saw a guy who was gay (nothing wrong with that) profess his attraction to a very horrified straight guy. Needless to say, the object of the Gay man's crush could not escape the ribbing that ensued until the next year's Holiday Party. (A disclaimer on the Gay incident- IT DID NOT HAPPEN ON THE TRADING FLOOR WHERE PEERLESS HAS WORKED FOR THE PAST 10 YEARS).

The best Christmas Party Meltdown Peerless Experienced happened in 2005. At that time, peerless worked for a group of guys who were (are) overall nice people. Peerless brought them Business and they paid him well for it. Therefore, was never going to have an issue. However, the fellow who worked with Peerless in the Sugar Options pit was rather disgruntled about his salary, etc. The day of the Party, Peerless and the guy go out before the Dinner actually starts and Peerless actually sees the other person double fisting beers and shots of hard alcohol. By the time the actual party (a sit down dinner at a high end Italian Restaurant in Tribeca) starts. Peerless' co-worker is absolutely shitfaced. While they were walking over to the party, the co-worker starts mumbling about how "so-and so" is a fat f$%k and for me to watch him because he is going to show me how to stick it to someone.

The actual dinner passes without incident but before the dessert arrives, the head of the company gets up and says he would like to make a toast. He starts mumbling something about how our company is the best and we had the best year and he is the best broker, etc. Peerless' friend gets up and yells at him in the middle of the restaurant, "If you are so (expletive) great then why can't you pay me a bonus more than $500". The argument gets played out very loudly by a bunch of drunk people in front of horrified diners and culminates when the co-worker announces "I AM QUITTING AND I AM TAKING PEERLESS WITH ME!!!!" At that point, everyone at the table (and other people in the restaurant) turn to me to see what Peerless will say. Peerless gets so flustered that he spits his wine he was drinking across the table. A big dilemma ensues: If Peerless just says he is not quitting, then he will totally make his friend look bad and he will get fired, if he says he is quitting, then not only does Peerless not have a job, but he also probably wont get paid for December as well. Therefore, he replies that he is SHOCKED no one in the company can get along and perhaps everyone can try to work things out instead of everyone getting fired, quitting, etc. Unfortunately, no one wants to work things out and a full volume disturbance erupts with the waiters bringing the check without us asking and them requesting that our company never go back to their restaurant. The argument between Peerless' friend and the owners of the company spills out onto the street and gets so heated that a full scale brawl is narrowly averted.

The end result of the altercation: Peerless' Friend gets fired the next day. The same guy also pukes all over the back of a taxi cab and almost gets in a Fight with the Irate Driver. Peerless tries unsuccessfully to get the Company's owners to reverse the firing. Peerless does not quit at that moment but winds up leaving 4 months later.

Peerless is actually very good friends with the Owner of the Restaurant. When he goes there with his wife, they actually joke about booking the upcoming Christmas Party at the same restaurant.

The Hall of Fame for Scrooge Type Bosses Peerless has worked for

Tis the season.......

No Blog on people in the Trading Profession would be complete without nightmare stories of former Bosses. Peerless wishes to state upfront that he has had the pleasure of working with some very honorable people in the Commodity Profession. Many of these people you will never hear about because they are Stand Up Guys (women) and never do anything sleazy. However, no one likes mundane news. Therefore, here follows the Hall of Shame. To those of you who might know Peerless in real life: Just watch it or you might find yourself here one day with a Sorbiquet as well (I kid- really) :)

It should be no shock to anyone that people (including Peerless) in the Trading Industry have some very big heads. It is fair to even say many of us succeeded because of, not in spite of, our massive egos. However, some people take things a step too far and instead of stepping over the line, chose to fly over it in a learjet.

#1. The Moyel- The Moyel, as you might have guessed by the name, was an orthodox Jewish person who gave Peerless his first opportunity on the floor. The Moyel was perhaps one of the most intelligent people ever to set foot in an options ring and is in fact the same person who made $1 million in less than 1 minute back in 1987 (see an earlier post). However, the only thing that rivaled his knowledge and ability to make millions was his hubris. Many a time, when young Peerless was learning about Options, he would get verbally assailed by the Moyel about his lack of common sense, stupidity, and even his looks. This guy was tough. The Moyel is also the person who hired the former Israeli Commando to work on the floor only to see the guy quit 2 weeks later because he couldnt handle the yelling and pressure the Moyel threw at him. Apparently, it was easier to run Clandestine Operations in the Golan Heights or Gaza than it was to take the abuse of this crazed individual.

Nonetheless, Peerless soldiered on (note the pun) for 4 years with the Moyel but "the Bridge too far" occurred when Peerless and the Moyel both went to London for a Business Trip. On the final day of the Trip, the Moyel got incensed at Peerless' lack of understanding the complexities of an OTC option. At that point, it somehow comes out that while Peerless was raised Jewish and even had a Bar Mitzvah, the fact that his mother was converted to Judaism somehow makes her not a real Jew and therefore neither is Peerless. So, with that info in hand, the Moyel now says that it explains why Peerless is so stupid. Since his mother is not a real Jew and Peerless shouldn't have even been Bar Mitzvah'd. Therefore, it totally explains to the Moyel why Peerless is so stupid.

Because Peerless isnt totally stupid, he doesn't say anything back or even Quit on the spot because he realizes he still needs to get back to NYC. However, the seeds of discontent are well sewn and Peerless thinks long and hard about the insult. It comes to pass that the Moyel one day fires Peerless because he feels he can get someone to do the same job Peerless does for Cheaper.

The end of the story is that Peerless winds up retaining all of the customers from the Moyel's Business and for the next 6 years, proceeds to stick it to the Moyel at every opportunity. Whenever Peerless would get one over on his former tormenter/boss, he would yell at him about how a goy was fucking him over. To this day, the cockles of Peerless' Heart warm whenever he remembers how he stuck it back to his former tormentor.

#2 Mr. Sympathy. In 2000, Peerless' mother had Breast Cancer and had to go through some very serious operations and chemo treatments. Needless to say, it was a very tough time not only for Peerless' mom and father, but also for him as well. One Monday Morning, Peerless takes a train from the hospital in Philly to the exchange in NY after learning his mom had a very bad reaction to the Chemo and was in grave danger of not living through the day. It just so happened that that day one of the Moyel's clients decided to give Peerless a hard time about undercounting him by 100 lots on a trade. Honest mistake and Peerless honestly shouldn't have been at work that day. However, "Mr Sympathy" just wont let it go and curses up a storm at Peerless and telling him how he will never get another order again because he is so bad, etc. By this point, Peerless hands the phone to the Moyel and actually goes into the mens room and cries for the only time ever in his career. When the Moyel explains to the guy what was going on and why Peerless was not 100% that day, the client actually responded back that he "didn't give a shit and to get someone else who could count correctly."

Peerless has never forgiven "Mr Sympathy" for power tripping that day. On a good note, his Mother is now a Breast Cancer Survivor for 9 years and for the most part doing well in her Retirement years. She has also never heard about this story until now (assuming Peerless' Mother is an actual fan of the blog).

3. "Miyagi-san" This guy wasn't a bad person. Peerless actually liked him. He was just unreasonably tough. Miyagi-san was the highest ranking black belt in the S Korean army in the 1960's and actually would get even with his drill instructors by breaking their arms or legs when they had to spar for Military Training. He never got in trouble because he would always explain it was a "training accident". Anyway, Peerless worked for him in the 1990's and everyone in the office was intimidated by him. He actually found Peerless an apartment 1 block from the office so he had no excuse not to work from 8am-10pm.

Perhaps he was a tough guy but he wasn't a real dick. A funny note is that 1 summer, Peerless had a friend who was an Air Force Academy Graduate working as an Intern. The fellow, who at one point was on the short list to get an F-16 turned to Peerless and said "That guy is the most intimidating 65 year old person I have ever met. He is a Monster."

Dear Miyagi-san, thank you for not ripping Peerless' heart out and showing it to him when he mentioned that you were the Korean Dick Clark.

Not only will the Bridge to Europe be beautiful, it will be a Suspension Bridge.

Apologies for not writing more. Hasn't been for a lack of funny stories but more a function of general laziness and sloth.

As mentioned in the Introduction to the Blog, Peerless grew up in South Philly. People like to romanticize South Philly as being a place of tough people who all fit the Rocky Balboa Underdog stereotype. While generally this vision is correct because people from there (including myself) are not exactly going to just give in and let "the man" screw us, there really are a bunch of Local Village Idiots residing on Passyunk Ave.

An awesome story was once told to Peerless by someone who we shall refer to as an "Uncle" of his Family. Basically, the "Uncle" was telling Peerless that all the idiots on the planet are located in the vicinity of 8th and Tasker Streets in S Philly.

One day, the "Uncle" walks into a bar there and proceeds to listen to 2 gentlemen discussing the Bridge they are building from the United States to England. The funniest part about this discussion was that the 2 guys were arguing about whether the Bridge was going to be a Suspension or a Pontoon Bridge. In other words, it was already assumed it was possible to build a bridge across the Atlantic Ocean but the real debate was what type of structure they would build.

The scary thing about this discussion is that while it was assumed a Bridge would be built, the 2 guys probably couldn't locate France or Germany on a map.

Peerless tries to explain the US$ weakness

I wrote the paragraphs below as an assessment on the US$ Outlook to my clients.  Since the report contains info useful to Macroeconomics as well, I thought it would be nice to include it as a blog post.

"Nuclear Quantitative Easing"

By way of a quick background, the term "Quantitative Easing" comes from the policy pursued by the Bank of Japan in the 1990's when they pumped vast amounts into the banking system to facilitate loans in credit in the wake of their Economic Crisis.  With the events of the Subprime Crisis crippling the US and the Worlds' Major Economies, we are seeing a return to the Quantitative Easing School of Macroeconomic policy.  

With that definition out of the way, the US$ Index saw a bounce from its lows in August 2008 to recent Highs in the beginning of March, 2009.  In fact much of its rally had taken place during the Lehman Brothers Default as well as the AIG crisis.  The reason for this strength had nothing to do with fundamentals but was simply the unwinding of the "Yen Carry Trade" where multinationals would borrow money in Japanese Yen at low interest rates and then lend in US markets at higher levels.  However, the US Treasury announced on 18 March a plan to add $1.1 TRILLION to the=2 0US Monetary Reserves over the course of the next year (Including $300 billion over the next 6 months).  When one considers that the US Monetary base is already up $1 Trillion from July 2008 until now as well the fact US Treasury Debt has grown from $6.5 Trillion in 2003 to $11 Trillion presently, the word Nuclear has been attached to Quantitative Easing by many other analysts.  Simply put, The US is printing money at a rate which could outstrip demand for its debt instruments (T Bills, etc) and setting the stage for huge inflationary concerns.  In fact, the yield for 30 year treasuries (which move inversely to principal value) is expected to be as high as 4.6%.

Since of course, it would be akin to yelling "Fire" in a crowded movie theater, the Central Banks of the World are trying to talk down this huge increase in US$ Money Supply.  The most recent US Treasury Report that lists the total debt flows in the US and what nations are investing in them shows a net outflow of $91 billion.  Yet, the individual breakdown has China increasing to a record value of US debt held and also has the Russian Federation at an all time high.  However, in spite of US=2 0statistics showing Russia purchasing $30 billion of US Debt since August 2008, their net FX reserves decreased $221 billion and the US$ share of the total Russian FX reserves is down to 41% from 47.5% (stats from Bank Rossii). Simply stated, the numbers don't exactly reconcile with each other and we would appreciate feedback from any of our readers more familiar with the situation.  

So, the question becomes, what exactly keeps the US$ from a total meltdown? The answer is that the system is now too large to fail.  The last thing China and Japan want to have happen is to see yields on their collateral rise sharply (remember the inverse relation between yield and principal) so they are not speaking out too strongly yet.  Also, the fact the Gulf Arab Nations insist on being paid for Oil in US$ serves in a way to make sure the US$ is on an "Oil Standard".  It should be noted that this second point is of great chagrin to the Fundamentalist Regime in Iran as well as other radical Islamists who feel Governments in places such as Saudi Arabia are merely "de-facto" extensions of the US and its policies.  

In the future, we expect to see a very gradual movement away from pricing in US$ as leaders such as Mr. Luiz Ignacio Lula da Silva of Brazil are calling for direct exchange of currencies between China and Brazil on commodity trades.  However, the short term result of the 'Nuclear Quantitative Easing" Policy will mean cheaper commodities on a US$ basis and spark an interest in buying by large end users such as China.  In fact, Beijing is in the process of allocating $4 trillion Yuan (approx $500 billion) for the building of infrastructure projects in China.  The direct result of which can be seen in the jump in the Baltic Freight Index to a 7-month high due to Chinese purchases of Steel, Iron Ore, Copper, etc.

The Gitmo Fiasco

It has been a while but I am not going to write something funny about the trading floor today. Instead, I am going to discuss the US Government's inability to close down Guantanamo Bay (Gitmo).

Since the opening of the Camp X-Ray in Cuba in 2001, activists in this nation as well as the rest of the world were outraged at the treatment of suspected Al-Qaeda terrorists. At first, I had no time for the points made by the people against the Gitmo facility as it seemed to be prudent to stop impending attacks on US Soil and after all, some of the detainees might have been directly involved in the 9/11 attacks.

However, as the "War on Terror" dragged on and it became obvious many of the prisoners in Gitmo didnt belong there because they were falsely accused or simply guilty by association, the time seemed right to close the facility and either release the prisoners or transfer to the US Mainland the ones who actually had committed crimes of terror. Nonetheless, the Bush Administration lept the facility open and angered many of the Liberal Democrats in the USA, who then used Gitmo as the poster child for the fear of the removal of Civil Liberties in the future.

Were the "liberals" correct? It is very possible that they were. Detaining humans for such an extended period without even the right to a trial or at least to hear the evidence against them is something one would expect from Stalin and the Gulag Archepelego. Even the Nazis were tried at Nurenburg and were subjected to due process of law. Yes, the point exists that the Nazis were proper Prisoners of War and afforded rights under the Geneva Convention while the suspected Al-Qaeda represent an organization instead of a nation and therefore, exempt from Geneva Convention supervision. However, if the prisoners were captured on a battlefield such as in Afghanistan or Iraq, they should be given a fair trial and released.

When President Obama took office, he pledged to close the Gitmo Prison and this decision was hailed around the world. After all, the United States should be the role model for a free and open society. It is simply against what it means to be an American to have a system in place that can detain people indefinately without a trial. After all, where does one draw the line on detaining someone? Is it reserved for planning violent crimes of terror only or does it extend into peoples' right to free speech when they can preach vitriol against the Government? When is the line extended to people who simply speak out against the President?

Yesterday, the Senate (which has a Democrat Majority) voted against shutting down Gitmo because it would involve relocting the prisoners on the US Mainland. To me, this vote is the ultimate in hypocrasy because it says "we think it is inhumane to subject people to torture and detain them indefinately but we dont want to actually intern these said people inside the USA proper."

It is almost a given that if it was Bush who decided against closing it, people would be in the streets and Amnesty International would surely issue an condemnation against the US Fascists. However, everyone is strangely silent now.

I want to see all the people who want to try Bush and Cheyney for War Crimes get outraged now that there was a majority that could have voted to close the US Gulag in Guantanamo and waffled when the moment of truth came.

Peerless gets ready for the Annual Meeting in NYC.

Ah yes, the 1st week of May.  For everyone else in the world, it means the weather is warmer and Spring should be in full swing.  For Peerless however, it simply means that the annual meeting of the people who trade his commodity is about to take place in NYC at the Waldorf Astoria.  Therefore, a week of parties that is somehow the Commodity Trader's version of the Cannes Film Festival is about to take place except instead of such luminaries such as Jack Nicholson, we get people like the Hit Man I was introduced to on my 1st day as the VIP's.  

Don't get me wrong, people from all over the world come to NYC for this annual party/dinner.  In fact, if someone wanted to become acquainted with the movers/shakers of my profession, this week would be the time to do so.  However, this party is much more scaled back than it used to be since we are in recession and also because London has a party every 2 years that is much better than anything NYC can do.  Nonetheless, Peerless remembers some funny stories from Annual Parties of years past.

Back in the mid 1990's, Peerless had a large client from an Asian Nation who used the NYC Dinner as an excuse to come to NYC and do all sorts of things that would earn them a divorce in their home nation.  One year, a group of 6 people from the aforementioned company came to NYC and it was Peerless' Job to show them around NYC and cater to their every whim.  When Peerless suggested visiting the top of the WTC (remember this was 1997), they responded they wanted to go to Scores (the mecca of strip clubs in NYC).  So, Peerless hits up his Boss for the Company Credit Card and takes the people to Scores.  Everyone (including Peerless) is having a grand old time until one of the Asians realizes there is a Stripper from his Nation dancing there.  Not only was she from the said nation, but she had dyed blonde hair, a fake tan, and the largest breast implants Peerless ever saw on an Asian woman.  The Traveling Delegation get totally horrified and insist we leave right away. So, apparently it was ok for women from other oppressed 3rd world nations (Poland, Russia, etc) to be strippers but no one from their country would EVER do that sort of thing.

In any event, we ended the night in Chinatown at 4 AM all singing Karaoke and we literally held hands and Sang the Drunkest version of "We are the World."  So- Precious.  

This same delegation wanted to follow up on their visit to the Strip Club the next Day by going to buy Porno Movies that were illegal in their own Nation.  So, Peerless takes them to an XXX store on Times Square (this was before Disney took over).  At one point, one of the group actually says to Peerless "I would like something that resembles a Love Story but with lots of Dirty Sex involved."  Thinking 99% of all Pornos just involve sex and no one really pays attention to the Plot, Peerless turns and suggests "Big Black Babes Bare Butts" (it was in the "Bestseller" rack).  

In fact, Peerless has been asked to play "Matchmaker" more than once for a visiting client during Sugar Week. Another client (who was single and no longer in the business) wanted Peerless to arrange a High Priced Escort for Him.  So, Peerless had to call around to several places and finally came up with the one he felt was the best choice.  As a side note, the client paid for the lady, not Peerless.

Another time, Peerless and another broker from the floor were at the Sugar Dinner when a trader from another country walked by.  The other broker, thinking Peerless knew about the other guy, asked if he had to buy him any Hookers this year.  Peerless decides to try and play along and says not that year.  The other broker says he once spent $1000 for a hooker for the guy and the guy still didn't give him any business the following year. 

With all of the above being said, Peerless would like to point out that these events happened over 5 years ago and all the above people mentioned are no longer actively involved in the trading business.  Peerless is also certain that other people would be happy to tell stories that are more incriminating than those above but he chooses not to do so because he doesn't want to get people in trouble.  

People on the Floor Really Do Hate Each Other

Peerless was at work yesterday and he saw 2 brokers getting into an argument.  The divergence of opinion reached its peak when one of the participants told the other fellow that he was "going to beat the living shit out of him."  Then, almost the exact same as NHL officials try to break up a fight after the 2 combatants run out of steam, several Exchange Employees stepped in and separated the warring factions.  Instead of going to the Penalty Box, the Broker who made the threat received a 2 day suspension (The floor equivalent of a 5 min major for fighting).  

Peerless reflected on this behavior after he went home for the day and realized he sees people performing all sorts of behavior that would keep an entire army of Human Resources Personnel busy arranging severance packages and defusing employee abuse lawsuits at normal companies. However, as mentioned before, the Floor is like Prison so disputes there are handled very much like a fight in the prison yard.

Basically, people fight because of the intense pressure of trying to trade as events rapidly unfold.  The fever pitch of the market causes high anxiety and people snap.  Peerless himself has on many an occasion yelled nasty things at another trader and can testify that it feels as if an evil spirit has taken over and the venom just spews out of his mouth.  Many of the brokers have rivalries with each other because this profession almost requires people to have a huge ego just to get in the door.  Therefore, it will be inevitable for people to just snap if they feel someone is getting the better of them.  

Here are some of the better fighting/argument stories Peerless has witnessed over his 10 years:

1.  Peerless watched 2 Brokers who were in fact Brothers beat up another trader in the street outside the exchange after a dispute boiled over into fisticuffs.  However, the 2 brothers failed to be disciplined by the Exchange because it just so happened they themselves were on the committee that handled Discipline.  They simply voted against themselves being sanctioned and got another person to vote with them (it was a 5 man committee).

2.  2 brokers who happened to be rather large individuals decided to hold Wrestlemania in the pit one day.  The reason, the first guy called the other "a big fat piece of shit" and the response was "At least I am not fucking my Clerk."

3.  In another recent event, Peerless' former boss had sadly suffered from a heart attack and decided to retire from trading.  He decided to come back to the floor to bid people farewell.  Another person who had never gotten along with the retiring individual nonetheless went up to him and tried to wish him well and mentioned he looked good considering what he had been through.  Peerless' Former Boss Replied "I had a heart attack, perhaps you should have one as well."

4.  Peerless has heard of similar stories but this event actually involved him.  He was going to Paris for a business trip and as he was leaving, someone gave Peerless a $100 bill and told him to take out flight insurance on himself because the other person was feeling lucky.

5.  Peerless and his first boss had a strong rivalry going on because Peerless left the company and the former Boss took it as a personal affront.  In fact, myself and the former boss used to taunt each other across the trading ring.  One time, Peerless got a rather large order and walked into the ring and flipped off his former Boss and called him "a fat blubbering piece of shit".  Other times, the former Boss would yell other pleasantries back at Peerless and would get a similar response in kind. At one point, Peerless wanted to make a Matrix Style Video where himself and the former Boss would fight each other Matrix style in the same way Neo fought Mr Smith in the movie.  

As a happy postscript, the 2 of us eventually reconciled after my father went to the hospital for a heart attack and the former boss was concerned.  On the same note after the boss also suffered a heart attack, Peerless was also very sad and concerned and checked on him to see if he was ok.  So now, talking about the former arguments is like recalling old war stories.  

Unfortunately, most of the times people where Peerless works are too bitter to reconcile with anyone and the hatred runs deep and rampant.  It totally wouldn't surprise me to hear people who have never worked in the trading profession being totally horrified that this behavior exists.  I won't try to justify why it happens but can only say it is part of what a person becomes when they choose to work in such an aggressive environment.

That being said, no one better get the idea of introducing yoga classes to the Floor as a method of stress management.