I traded in a trading pit for 23 years.
Mano e mano.
It was hyper physical, and really unlike any other type of business on earth.
Outsiders would come and gawk at us from the visitors gallery like visitors to the zoo.
The trading floor in New York is not at all like the trading floor in Chicago. In New York, it was much more genteel. Chicago was noisier, and after you got done with your day you might as well have been in a rugby scrum. But it was exhilarating.
The reason I point this out is that the MF Global case is starting to be framed between two people. Jon Corzine and Terry Duffy. I don’t know Corzine, but he did graduate from both schools I went to, Illinois and Chicago. I do know Terry Duffy, and he graduated from another school I went to called the school of hard knocks.
Corzine worked on Wall Street for Goldman. He traded other people’s money. They made money by trading against their customers. It was a confidence game. However, because the firm was perceived as a “white shoe” firm, they could hide under that umbrella. Goldman isn’t known as Dracula on Wall Street for nothing.
Duffy worked for himself in a trading pit. He traded his own money. Trading pits, while nuts, do have a very strict code of etiquette. There is a regimented orderly fashion to how business is done. There are some things that are central to every trading pit environment to make them work. First, if you can’t trust the person you’re trading with, you don’t trade with him anymore. No trades, you are out of business. Simple as that. Second, working in a trading pit is a continuous game. In the interpersonal struggle, sometimes you have to give a little to continue playing. There are as many personalities as there are people in a trading pit, and you have to be able to do business with all of them. No one says you have to “like” everyone, but you have to get along. There have been many times where I stepped aside and didn’t trade at financial cost to myself to allow someone else to get that trade because I knew they needed it. They would repay the favor someday, or then we’d have issues. Everyone there is trying to maximize their own gains. Believe me when I tell you, many times it got really interesting.