Odd Lots - What It Was Like In The Glory Days Of Trading Currencies In The Pits

Episode Date: March 19, 2018

These days, when you think of trading, you think of people sitting at a desk with a bunch of monitors, watching charts, and maybe making decisions based on algorithmic signals. Of course if you imagine a trader a few decades ago, you think of someone in a big open pit shouting loudly and writing things down on actual physical pieces of paper. So what was that scene really like? On this week's Odd Lots podcast, we speak with Cameron Crise, a Bloomberg macro strategist, who used to trade currency options in the pits in Chicago during the early 1990s. We talk about how he got there, some of the funniest moments he experienced, and how the trading world has evolved since then. See omnystudio.com/listener for privacy information.

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Saturdays and Sundays starting at 7 a.m. Eastern. Make us part of your weekend routine on Bloomberg television, radio, and wherever you get your podcasts. And welcome to another edition of the Oddlots podcast. I'm Tracy Allaway. And I'm Joe Wisenthal. So, Joe, we had a pretty big development happen in the world of finance and markets earlier this month. Yes, we did. Arguably, I mean, arguably the biggest job in finance.

Right? Wouldn't you say that? Yeah. It concerned probably the premier job in all of banking and finance. I absolutely would. And so what we're talking about, of course, is Goldman Sachs, apparently putting David Solomon in line to become the CEO once Lloyd Blank Fine finally resigns. This is something that people have been talking about for a while now, but now they're talking about it in the context of what it means for Goldman and what it says about the changing nature of the bank. Before we go on, I guess you could also say that the succession question for Berkshire Hathaway is right up there in terms of huge finance jobs. But there's something, as you say, very special and relevant about Goldman because, A, it is right here on Wall Street.

And also, because as you put it, it does have these sort of multiple business lines that seem to rise and fall over time, causing the fortunes of the people who are involved with them to sort of rise and fall in sympathy. Exactly. So the trope is basically that Lloyd Blankfein came from this trading background. And the new guy that's coming in, David Solomon, he comes from more of an investment banking background. And that signals where Goldman kind of wants to go. The thinking is that trading, at least in the old style, is dead and it's time for the new Goldman Sachs. So, you know, as a former banking reporter, all of this news, this transition made me a little bit nostalgic, Joe. So I thought for this episode, we could talk about some old-timey trading.

We could talk about, you know, when men were men and traders were traders and most traders were men and really dig into some of the trading world as it used to be. Yeah, I mean, it's always fun to talk about trading. And I think people have some image in their mind of what traders do and maybe yell on the phone and yell in an open pet and take huge risks and stuff like that. Probably looks pretty different today if you're on a trading floor. but people always love those old-timey stories. So we have the perfect person to discuss this. It's Cameron Kreis. He's a macro strategist at Bloomberg now,

but he was a longtime options trader, and he's going to tell us some of his war stories from trading. How's it going, Cameron? Yeah, very well. It's snowing outside. I'm about ready for the warm weather. But other than that, everything's going fantastic. So Cameron, I got to say this whole discussion

was partly kicked off by a tweet that you put out about a particular character who was trading. But before we get to him, can you sort of set the scene for us? What exactly were you doing when it comes to trading? What was your role exactly? So I'm kind of one of the last of a generation of foreign exchange option traders that essentially served an apprenticeship on a physical exchange. Nowadays, 99.99% of all FX spot and option trades are done over the counter. But back in the early 90s, which is the period we're talking about here, I worked for Swiss Bank Corporation, which had just purchased O'Connor and Associates, which was one of the biggest and most respected option market making houses

in Chicago. And our modus operandi was essentially to have the new crop of future traders serve an apprenticeship on the exchange, on the Chicago Mercantile Exchange. Now, there was still quite a bit of activity here, both in Chicago and on the Philadelphia Stock Exchange, which also listed currency options contracts. A lot of the flow, I think, came from European corporations who were looking to hedge some exposure and say, dollar mark or dollar Swiss or dollar a yen or whatever. So we were hired, essentially, by this firm stuffed full of MIT engineers and sort of Penn Wharton finance whiz kids and then thrown on to the floor of the Chicago Mercantile Exchange, which, shall we say, was not full of these sorts of people. So, you know,

when I started work, I didn't have a sort of a financing background. I studied public policy in college. I'd actually been studying abroad when Sterling was ejected from the European exchange rate mechanism in 1992, which sort of fostered my interest in foreign exchange. So when I was hired six months later, I said, yeah, I want to go into FX and had these interviews with these really smart guys, and they were all guys, and then started on the floor of the Merck, not really knowing what to expect, but sort of thinking that it would be just full of people similar to the ones with whom I'd interviewed. You hear stories about this, about people who don't have a traditional finance background, just sort of willing their self into the space.

What made you think you could do it? And what do you think your interviewer saw in you that, you know, this opportunity to learn and to be an apprentice and to sort of get involved in this very exciting area? What do you think they saw on you that you had that made them willing to take a chance? Well, there were a couple of things. One was a sort of familiar. familiarity or an intuition for probability theory, understanding essentially expected values, expected value type payouts. And a second was mental math, because when you're on, certainly when you're on an exchange floor, trading options, you have to be very, very sharp and very, very quick at mental math, being able to add and subtract relatively quick.

And I'll explain sort of the mechanism in a second. And while I'm no sort of quant or higher mathematics genius. My mental math was very good. So they asked me a few, you know, a few questions, what's 70% of 854 or something like that? And I could figure it out back then very, very quickly. And so that was sort of a prerequisite that they were looking for to be able to trade options on an exchange floor. And so the mechanism for trading options is you would have a sort of a set of sheets, we call them paper sheets that were filled with theoretical values, where there'd sort of be the price of the underlying, a range of prices of the underlying on sort of the top, on the X axis, and then a list of strike prices on the Y axis and a list of theoretical values.

So it was essentially a grid. So as spot moved and as the strike price moved, you'd have a theoretical value for a given level of implied volatility for an option. Now, this was based on a flat volatility curve. Obviously, in reality, market option values are cortotic, i.e., out of the monies are different from the at the money and their skew, sometimes puts or a different value from calls. And so you had to be cognizant of these dynamics. And, you know, we were always very dismissive of people and of firms. Some firms actually built this in to their theoretical

value sheets. And we just called them sheet monkeys because all they could do was pair it off what was on the sheets. And if and as volatility's moved and as markets moved, you had to be able to essentially adjust on the fly. Now, if you were used to doing that for everything, it became much easier than it was if you were just used to saying, all right, it's worth 40 on the sheets, so I'm 39, 41. For us, maybe it was worth 37 on the sheets and you were 40, 42 or something like that. So, Cameron, armed with your mathematical abilities, what were your first days or weeks actually like? Because I imagine no matter how well adapted you were to this work, it must have been something of a culture shock. It was a total culture shock because based on the interview process, I assumed that sort of mental acuity was the primary distinguishing feature of all the participants in the market.

And I quickly realized that the primary asset that most people on the exchange floor had was size and volume. Essentially, it was full of X Big Ten football players. Seriously, in the pit. And it was really, it was an amazing site because you have the pit, which was full of market makers, and that would be ringed with brokers. And then the brokers each would have somebody, a clerk, standing next to them. So it was a very complex chain of communication. So there'd be, say, E.D. and F. Mann, which was a big broker.

They would have an office somewhere and in there there would be a broker talking to a customer. So the customer wants to do a trade. The broker would then ring the exchange and there would be a box, you know, sort of like, it was almost like an amphitheater. So there'd be rows and rows and there'd be boxes with phone clerks who would be then on the phone with the guy in the office or the person in the office. They would then get the order. They would signal down to the pit where the clerk whose job was just... Is that a hand signal? Yeah, just hand signals.

And I'll talk about those in the second. So the clerk, the pit clerk, whose only job was essentially to watch the guy on the phone, would then see what the order was, whisper to his broker, his pit broker. Then the broker would start screaming, you know, I need a price in Mark 65 puts, 2000 up, which would mean, you know, the mark would be obviously the contract, the Deutschmark. 65 would be the strike price and 2000 would be 2,000, 2,000 contracts. And then it would be a scramble. Everyone would look at their sheets, figure out what the theoretical value was,

then figure out what their price was, you know, 2.4. So what was your role in this ecosystem? So I was a trading assistant. We all started as trading assistant. Well, the theoretical name was trading assistant. The reality was clerk. And it was basically dog's body. Do all the grunt work for the trader in this.

the pit. So the relationship between our pit trader and the overall bank was that there would be an over-the-counter trader who would run the over-the-counter book in an office at the Chicago Board of Trade in Chicago. And we would be a liaison between that overall book trader and portfolio manager, if you will, and our guy in the pit. And so we would be a channel of communication both upwards and downwards. So something happens in the over-the-counter market. We would then have to tell our guy in the pit, hey, vols are getting paid up, balls are getting given. And the other way, we do a big trade. We tell the guy upstairs what we've done. Now, the unfortunate aspect of this is whenever there was a miscommunication and the trader did something the guy upstairs didn't like,

we would essentially bear the brunt of the anger. So I was told. at different times, the world thinks we're stupid and it's your fault. And between you three guys, i.e. me, a junior trader and the senior trader, you know, you don't have a brain. Which, you know, when you're three months into your job is pretty sobering, show we say. I'm not sure if you can get away with that these days with all the sensitivity, sensitivity trades. Depends on the context. Yeah. So, you know, it basically, you know, working on a pit is very unusual because the

These days, in financial markets, you essentially spend 99% of your time working with people who are on your side, i.e. working for the same company. When you're on an exchange, you're spending most of your time working with people for other companies who in many ways are your adversaries. And that requires a bit of a different mentality. And I mean, I'd been working there a month. And our guy in the Deutsche Mark Pit was like the biggest guy. He was the hammer. He was the most important biggest market maker there. And I remember I'm going to give him some cards or picking up, you know, you literally, they'd do a trade, they would scribble it on a card and we'd have to pick it up and then enter it. There was a guy we hired that, you know, that just entered his job

it was to enter it, enter the trades into the system. So every so often we have to go and pick up his cards that they would go into the system because there was a cutoff point, you know, something like half an hour after a trade was done, it had to be entered into the Merck system. So I'm standing at the edge of the pit trying to pick up cards from my guy, and and next thing I know he's throwing a punch at another trader so

I'm fresh out of college what's the first thing you do when you see one of your buddies you know getting to a scrap well you grab the other guy from behind and I remember the guy the guy looks at me he's like let him go

get out of here and then throws another punch so he ended up getting essentially banned from from trading on the Merck for sort of violent conduct or whatever.

Or fortunately, or unfortunately, depending on your perspective, I was not banned, so stuck around. But it was sort of a, you know, it was sort of a real introduction, sort of cold water, ice bucket challenge, if you will, to the combative nature of the business. And like I said, it was full of really loud, really big guys. And physical size was a real asset because in a crowded pit, if there's a broker across the pit that has a big order that you want to trade on. listen, the broker's going to allocate the trades

based on who's right in front of his face. So obviously the bigger you are, the more bodies you can sort of shove out of the way to get into the broker's face and make sure you get your share of the order. Now, I'm not sure if I can say this on a Bloomberg podcast. So the guy that replaced our sort of would-be Mike Tyson was like an umpalumpa.

He was about five foot nothing. Come on. It's sort of a skinny guy. and he managed to carve out his space not through physical prominence but through flatulence so

I wish I were kidding but I'm not so this just took so many different each description here was like another twist that I didn't see coming so I mean

you know you can delete this bit if you need to but it's you know it was you know that was what it was like you had to you used every edge you can, even if it was last night's dinner. Okay. So, I get the picture.

Yeah, okay. You can get the news whenever you want it with Bloomberg News Now. I'm Amy Morris. And I'm Karen Moscow here to tell you about our new on-demand news report delivered right to your podcast feed. Bloomberg News Now is a short five-minute audio report on the day's top stories. Episodes are published throughout the day with the latest information and data to keep you informed. Yes, there are other products like this from a variety of news organizations, but they usually rerun their radio newscasts throughout the day. That's not what we do. We create customized episodes

that can only be heard on Bloomberg News Now. And we don't wait an hour to publish breaking news. When news breaks, we'll have an episode up in your podcast feed within minutes, so you're always getting the latest stories and developments. Get the reporting and the context from Bloomberg's 3,000 journalists and analysts. We're all of. over the world. Listen to the latest from Bloomberg News Now on Apple, Spotify, or anywhere you listen. Cameron, can I ask, you know, more broadly, what rituals did you observe on the trading floor while you were there? Well, rituals. I mean, we had to be in the office every day at 5.30 in the morning to sort of run the sheets and do all the prep work. And then we'd had to walk from the board

of trade to the Merck. And we had these big brown sort of satchels that we'd, we'd have these big brown sort of satchels that we called the footballs because you carry them under it's big it's brown you carry it under your arm it's football you know get there do the preparatory work there was always one of us that had to go over even earlier to deal with the previous day's outtrades so any mistakes between what you'd put in the system and what the Merck had in the system had to be resolved before the next day's trading and so you'd show up at sort of 6.30 in the morning and the guy you were dealing with inevitably smelled of last night's rum and coke. I mean, I mean, it was, this was real Chicago,

sort of south side Chicago working class guys you were dealing with. Other than that, really the primary thing was you would, you learn to bet and make prices on anything. You know, how high is the ceiling? Oh, I'm 80, 85 feet for you. You know, and then someone would deal on your price and you'd look it up. That's something, that just became part of the. culture. Yeah. Outside of the actual exchange of options, people just got that inclination. Yeah,

you would bet on anything. So obviously, this is quite timely. March madness was a big thing. So there would be all over the floor. There was this essentially floor-wide betting system where the team that would win the tournament would go out worth 100 bucks and everyone else is worth zero. So you would make prices and deal on and run a book of NCAA team. So this year, you You know, maybe Virginia would be, I don't know, 18, 20 would be the price. So you need to pay 20 bucks to buy Virginia. And if they won, they would go out worth 100. And if they didn't win, they would go out worth zero.

Is this, I'm actually very curious about this because I've heard of there there who just have this inclination to bet on everything. Like I read a story once about some poker player who saw a fly on a window. And he's like, I'll bet that fly takes off for the next 30 seconds. They made a price. Do you think that is the type of thing that people hone over time, or are there simply people who just see the world with sort of numbers and odds floating over everything they look at? I think it's a combination of nature and nurture, to be honest with you. The sort of person that's interested in financial markets will naturally tend, I think,

to view the world through that prism. So in that sense, there's a natural affinity between wanting to work in financial markets and wanting to sort of assess the probability of various things, whether it's the stock market going up or a fly flying off the wall. But certainly the pattern of behavior of making a price on anything sort of aggressively was at least from my perspective learned. I didn't walk around in college saying, well, I'm 86, 88 on how I did on that test. Whereas maybe when I was taking an exam,

six months into my professional career, that's the sort of thing I would have said. So there were a few things that, sort of outrageous things that happened in terms of in terms of bets. So referencing the NCAA was sort of the year before I started, apparently a clerk for one of the big banks had run this enormous book having sort of liabilities with all sorts of people all over the floor. and basically he lost a lot of money, couldn't make good. And so essentially the bank that he was working for had to make good to maintain a sort of professional, you know, a professional standing. Wait, this was an NCAA pool that he was running and the bank had to back him up. He wasn't running, you know, he was part.

No, yeah, yeah. But he like got into some beds there just said and the bank felt that they had to backstop. Yeah, basically they were the, they were the New York Fed to this guy's Lehman, right? There was a broker that ate a foot of cockroaches. Oh, no. Cockroaches lined up lined up in a foot. People bet, will he do it? Will he not do it?

I do that. There was a guy. Wait, where did he get the cockroaches from? Yeah, I wasn't privy to the sources. It's Chicago. Is it the, that's like the Chicago, the Chicago unofficial national anthem is like called like cockroaches on the march or something. So I don't think they're hard. Yeah, they rarely are, right?

So there was a particularly memorable one is there was a rather portly clerk, training, not even a training, it was a broker's clerk. And somehow it got the, the instance came up, you know, how many recess cups could this guy eat? And so somehow 50, 50 packs of recess cups, you know, at one sitting. So it's sort of like the Chicago version of Paul Newman and Cool Hand Luke. How many recess cups can this guy eat? And there must have been, you know, and then it just evolved to can he, or can he not eat 50 packs of recess cups in one sitting?

And there must have been 30 or 40 grand amongst all the brokers on this. And like, you know, the day before the big day, it was going to happen after the close. Everyone was going to go. The guy comes up sort of looking bashful and he's like, well, I went to the doctor and he said I could go into sort of glycemic. He didn't, he said sugar shock, but I'm assuming some sort of glycemic shock if I eat 50 recess cups. And, you know, everyone was really just, I was long. I was really disappointed because someone had asked him like the day before, well, how much do you actually like Reese's cups?

And the guy, like, looks at us and says, oh, they're my favorite. So that sort of tilts the odds in your favor. I remember once I had to ring the Chicago Aquarium because there was a big debate on who would win a great white shark or a killer whale. I think the Discovery Channel made a documentary about this about 10 years ago, but we knew well in advance, because I had to ring some marine biologists, the Chicago Aquarium. Oh, yes, this is Cameron Kreis from Swiss Bank Corporation. We're having a today here.

Yeah, who would win? And he's like, well, I think the killer whale smarter, so I think the killer whale would win, which was the deduction of the National Geographic, or Discovery Channel, whatever it was. Years later. So we knew well in advance. So, yeah, so there were all sorts of little hijinks

that went on for sure. So, Cameron, you have some characters, to say the least, on the trading floor, but you also have some characters in terms of your clients, right? Like, who stands out to you now? Well, as a market maker on the floor, certainly, all your only point of reference is the brokers. And those were just personalities. You didn't know the end client behind that.

You only sort of learn that once you sort of moved, if you will, upstairs. But even there, I mean, sort of, they say past as prologue, right? There was one broker in particular in the Deutsche Mark Pit. Now, I won't name, but had the sort of. orange, fake tan was sort of loud and obnoxious. It's sort of, I'll just leave, I'll leave it there. But it was funny. The sort of the hand signals that people would use to indicate, say, which broker was doing,

which trade were, you know, were kind of funny. So if it were Goldman, the pitbrook would point to their hand like a gold ring. If it was Payne Weber, they'd point to the neck. So pain in the neck. Shearson, scissors. shares, and if it were Deutsche Bank, they would point to the spot, you know, basically point to the septum. The Hitler mustache. Yeah, the Hitler mustache, which, you know, again, perhaps not politically correct, but, you know. You have to communicate somehow. Yeah, exactly. You know,

you knew what they meant. So once I eventually moved upstairs and, in fairness, away from trading more towards spent some time in sort of sales and sometimes in strategy, you know, you got to see the big ticket clients over the counter, both in terms of spot and in terms of options. And that was, you know, that was interesting because, for example, during the Asian crisis, I was actually working in Singapore. So that was incredibly useful to see how various hedge funds were behaving, you know, around that time, people who were long dollar tie bot, seeing it explode higher, but then having to pay sort of 500% on an overnight basis to fund the pay. position, you know, just interesting to see how, you know, how they reacted. And you, I mean,

you could certainly see that some clients, some hedge funds in particular, would take advantage of illiquidity, which I guess isn't, you know, that's not a great surprise to anybody, unless you're naive, but they would trade to not to get best execution, in a sense, to get worse execution to push the price, which. I'm curious. So you mentioned interesting personal days, like the days the day the trader got into the fist fight. But you sort of anticipated where I was going to go when you mentioned the Asian crisis. Are there any specific days in market history that people would remember that strike you as having been particularly interesting or intense from the floor perspective? From the floor perspective, I mean, a few that come to mind was, I mean, and this is

nothing special in the animals of history. I remember on Valentine's Day, 1994, which was like a week two after the Fed first put rates up in that tightening cycle. Dolly yen fell six or seven percent in a day, which was sort of mayhem. A year later, I was actually working in Paris at this time because the Matif, which was the futures exchange in Paris, saw that all these French corporates were trading on the floor in Chicago and in Philadelphia and decided, well, we want, you know, we want some of that action. So I spoke a bit of French, so I got sent out there as sort of a

senior clerk, junior trader type guy. So when the dollar collapsed in sort of early spring of 1995, I mean, we rarely saw volume on that floor, but even us, we were super, super busy because there was all sorts of demand to sort of take advantage of or hedge of following dollar. And this was right after the Kobe earthquake in Japan that also saw Nick Leeson blow up. So that just injected the general level of volatility across all financial markets. But, you know, going back to clients or individual trading, I mean, one, and sort of, if you will, taking advantage of market discrepancies, I was working in Philadelphia for a summer after I left Paris.

Again, trading FX options on the exchange in Philadelphia. And there was a big client there who I, it was some sort of French corporate. And Lord knows what they were doing. But they used to do these really complicated spreads in dollar mark, in. dollar Paris, which was dollar French franc, where they would do these option butterflies and they would swap one for the other. And they really had no economic value. So I think the guy was just trying to pay his broker for some other service or something. But you always knew which way he was going to go. So it might be worth, say, theoretical value of zero, but you know he's buying it.

So you would make it, say, 10 basis points at 20 basis points. And then it just became a game of not even cat and mouse. It was just hit and hope, kind of, because you knew, again, this thing is worth zero, theoretical value is zero, market value is zero, you're 10 bid, because you know the guy's going to pay 20 for it or at least pay sort of 16 or 18 for it. So you're giving them the massive read. But you're out there, your price is out there, and if someone wants to sell it to you, you've got to, essentially you've got to honor the price.

And if you get hit, if your bid gets hit, then the guy in Chicago, running the overall book says, what kind of moron are you to pay this much over the theoretical value price? If you sell it, then you're a genius. But if you get given, you're a moron. So just that waiting game of who, you know, who's going to respond to the phone first, the client or someone else, you know, Goldman Sachs or J.P. Morgan or someone else who's not on the exchange floor. I personally didn't enjoy that because it, you know, it's sort of a coin flip as to whether you're a genius or an idiot. And I'd like to have a little control, more control over my destiny than, you know, who answers the phone first. Okay. So speaking of destiny, we alluded to this a little bit at the

beginning of our conversation, but there's been this ongoing discussion of whether the decline of trading is a cyclical or a secular phenomenon, i.e. whether it's temporary or something that's going to be around for a very, very long time. I mean, listening to some of your stories from the 90s, I cannot imagine that that kind of trading ecosystem is ever, ever going to come back. How do you view that debate and how do you think the markets are going to proceed going forward in terms of trading? Yeah, I mean, I couldn't agree more. I mean, even going back to where we were in sort of 2009, and I remember even like five or six years ago when I was macro hedge fund portfolio manager, we would sort of sit there and look at each other as volatility declined to something close to.

to zero and many of the assets we were trading and sort of saying, hey, the game is over. Everyone out of the pool. And you've sort of seen that to a degree in terms of the return stream over the last five or six years, not only of sort of macro hedge funds, but active management across other asset classes, there's certainly equities generally. And I think there's a few things here that are driving, if you will, a permanent change in market conditions, obviously the regulatory environment being number one, both in terms of market abuse, although I think that was generally speaking overstated in macro products. But number two, just in terms of the amount of risk you can take, the fact that banks can't prop trade in most assets, that's a change.

The fact that the edge that many hedge funds may have had in the past in terms of information, seeing that regulators can now ex post say, well, you shouldn't have done that. and we're going to find you or close you or in a very rare occasion send you to jail, that also changes changes the calculus. And let's face it, the advent of more quantitative trading, arbitrage trading, the algos, whatever you want to call it, as well as sort of the more passive strategies, have taken a lot of the edge out of the market.

And that's one of the reasons I think all this whole crypto thing has received so much attention is that that is clearly an inefficient market and less efficient the market, the more the risk premium there is to be harvested. Well, I have to imagine that any trading environment, which was characterized by someone up in a booth, sending hand signals to a guy whose main advantage in life is that he's over six foot tall must be riven with inefficiencies that a computer very quickly can ring out. Yeah, I mean, yeah, I think that's fair. Let's let's put this in crazy perspective. I mean, I started my career a year after the World Wide Web was invented. Right. So, the whole internet thing was basically a non-starter in terms of financial markets and the speed

with which information could flow. In terms of that floor culture that you described, was there like a moment that you felt like, okay, this is coming to an end, like where you saw that it was still active and there was money to be made, but that it felt like the writing was on the wall? Well, I think when I went to Paris, which was literally only nine months into my career, the fact that the French corporations wouldn't trade on the French exchange, that kind of didn't smell right. And so, you know, for better or for worse, I spent a little over a year kind of just cooling my heels, which stunted my professional development almost certainly, but by the same token, I was sort of 23 and getting paid to live in Paris. So the complaints

weren't too vociferous. But yeah, I mean, then when I went to Philly and there was the occasional big ticket trade that I described earlier, but other than that, again, we spent a lot of our time kicking our heels versus even two years previously when I was in Chicago, it was generally a steady flow of activity, you could see even then, even over that two years, the business was migrating away from that exchange environment much more towards an over-the-counter. Yeah. So, you know, I wouldn't describe it as unlucky. It's just, you know, a circumstance of history, really. And, you know, as we've seen, markets evolve. And that was a classic evolution from a less efficient, you know, in a sense, there's a financial market law of thermodynamics.

You know, in thermodynamics, entropy always increases. And generally speaking, in market efficiency, it doesn't always increase, but it generally increases. But certainly when you talk about a chain of communication that's maybe five links long versus a click of a mouse button, I mean, that's only going one way, isn't it? Yeah. All right. Joe, are you okay leaving it there? I mean, I could actually listen to Trader, Floral hydrants for like five hours, but I think maybe it's time to leave it there. All right. Cameron Kreis, that was an amazing conversation. Thank you for bringing the 90s world of trading to life with the flatulent umpalumpas and various other things.

Thank you. My pleasure. So, Joe, I don't know where to begin. I really enjoyed that conversation, but it is basically talking about a lost world, isn't it? I wasn't being facetious when I said we could do that for five hours. Now I'm wondering whether we should do like a little spin-off odd lots where we do like a 10-part series really favorite counting the glory days because I have definitely not laughed that hard on any of our previous episode. I did not see the flat show and the lint oompa is coming up. No. That was a

curveball. I did not. I hope you're glaring at our producer right now, making sure that he's going to keep that into the podcast. But I would definitely be on board for more on this discussion. But there is a serious theme underlying all of these funny stories, which is the degree to which markets really have changed. And a lot of people would say they've become more efficient. They've become safer in various ways. But there are some criticisms around the edges of what markets have turned into. So, for instance, there's this pervasive argument about lower liquidity because banks aren't doing proprietary trading anymore. So there is a serious discussion here. I doubt anyone has realistically lost out from the fact that we don't do hand signals on a actual floor anymore.

But you know what I mean. But yeah, and there are certainly people who I, who, who, probably would make that argument that although volatility has been incredibly low for a while now, that if we did have more sort of natural handbrakes and more people involved in the process that we wouldn't have these extraordinary volatility spikes that come out of nowhere that are supposed to only happen one out of every 5,000 years, but it seemed to happen one every two years. So you do lose something. I mean, on net, I do think it's probably good for markets overall that being a Big Ten football player is not an advantage. Although I'm biased because I'm, you know, five foot nine basically.

So I'm pro this change. So I'm biased as well because I think as Cameron mentioned, there were virtually no women on the floor at that period of time. But anyway, shall we call it a day? Let's call it a day. All right. This has been another episode of the Odd Lots podcast. I'm Tracy Allaway. You can follow me on Twitter at Tracy Allaway.

And I'm Joe Wisenthall. You can follow me on Twitter at the stalwart. And you should follow Cameron Christ or Bloomberg macro strategist on Twitter. He's great at Fifth Rule. And you should follow our producer on Twitter, Tofor Forges. He's on Twitter at Forges T. As well as our Bloomberg head of podcast, Francesca Levy, at Francesca. today. Thanks for listening.

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm.

Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Thank you.