Exchange Invest 2469 Weekend Edition: LIFFE Begins At 40?
Floor tributes, panjandrums of panic surround the idea of economic growth.
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On this day in 1934, the Securities and Exchange Commission was created to regulate stocks, bonds and other commissions. Kennedy patriarch and former Wall Street speculator Joseph P. Kennedy were appointed as its chairman.
40 Years Later: A LIFFE Story
It’s curious that there are zero official celebrations in the air this week but 40 years ago today the then Bank of England Governor Gordon Richardson cut a ribbon hanging in the Royal Exchange and ceremonially pre-empted the first bell being run to start trading.
From there on, the City of London’s presence in derivatives, already on exchange in commodity forms at various venues, had entered the ‘modern’ (what I prefer to term “Sandorian”) era of markets. Across the road, the options traders added some colour to the suits on the London Stock Exchange floor but soon LIFFE had captured the imagination as the dynamic market right in the heart of a building rebuilt often since being originally constructed by Sir Thomas Gresham and opened by the original Queen Elizabeth in 1571.
HRH Queen Elizabeth II would, as I noted the other week, visit LIFFE when it moved to CannonBridge on 11th February 1992. Throughout both incarnations of the LIFFE floor, the whole market was a thriving hotbed of international trade. Originally it copycatted key US markets and added the British yield curve as well as currencies but soon it would develop into UK stock index futures and much more.
I was not there on day one — relieved to say I was far too young! — but it was a fantastic place to learn markets, make friends and experience something which digital markets still cannot replicate, the cacophony of thousands of voices seeking to make markets and bring Liquidity, Accessibility and Transparency to the world.
LIFFE was founded after IPE, LFOX and LME within the Square Mile and it followed the great floors of Chicago and New York as major titans of exchange commerce and it lives on to this day trading via the ether as a balance sheet powerhouse within the magnificent portfolio of ICE.
Of course, the lessons to take away from this episode is that with the rose tint of history it all looked obvious. Futures were a great idea which succeeded on a smooth ar oc acceptance to become mainstream. Yet (as the British government has been discovering this week) the force of reaction is powerful within the establishment and even when LIFFE traded its 1 millionth contract on August 5th 1983 and 2 million by March 9th 1984, there were still vast swathes of cynicism. Cofounder and twice Chairman of LIFFE Sir Brian Williamson used to note that The Economist Magazine took years to stop dismissing the concept of LIFFE for instance before finally getting on board with the success of exchange traded derivatives years after the reality was voluminously obvious.
After 4 decades of success, it appears LIFFE is enjoying a somewhat muted anniversary but those who worked on the floor or for the exchange itself retain a remarkable unifying bond and later today I am sure I will not be alone in raising a glass to a great market that did so much to accelerate the world of derivatives trading. It’s a great lesson in vision (thanks to all who persevere and built the original market — even when the Bank of England was itself cynical it would work) and a very useful lesson concerning a rather low latency media / public opinion forming process and the wider blob whose short-termism cum narrow minded perspectives on the future usually involves a rush to judgement before the facts have been established.
From Exchange Invest 2465: 27th, September 2022: Tuesday
Louise Fletcher, has died aged 88 “having gained cinematic immortality through her portrayal of the terrifyingly cold and manipulative Nurse Ratched in Milos Forman’s 1975 adaptation of Ken Kesey’s novel One Flew Over the Cuckoo’s Nest” as the Telegraph pithily notes.
In an on-set interview, Fletcher remarked of Nurse Ratched, “I see her as a human being — she’s not a medieval witch. I see her as a woman who believes totally in what she’s doing. She believes that what she’s doing is absolutely right and best for all the patients.”
In other news, Italy actually electing its own government has been viewed dimly by the EC. Even on the eve of the vote, there was this: EU Commission President Threatens Italy On Eve Of Election, Says Brussels Has ‘Tools’ If Wrong Parties Win.
Voters may have chosen the “wrong’ winner according to the EU’s narrow view but at least now I finally realise who President Von Der Leyen reminds me of.
NEXT WEEK TUESDAY
Season 14: Episode 01: IPO-VID Livestream 079
October 04th: 1800 UK, 1900 CET, 1300 EST
Paul Conn: Around the World From Front Office To Back
Paul Conn started his international financial markets career at the London Stock Exchange in 1979. He joined the Australian Stock Exchange in 1989, holding a number of senior roles including Head of New Business Development. Paul joined Computershare in 1998, relocated to New York in 2001 and was appointed President of Computershare’s Global Capital Markets Group in 2006.
Watch the Stream on:
Season 13: Episode 06: IPO-VID Livestream 078
September 27th: 1800 UK, 1900 CET, 1300 EST
Kevin Brady: A2X A Market For All
Kevin is a co-founder and the CEO of A2X Markets a licenced, regulated Stock Exchange created along with Sean Melnick and Ashley Mendelowitz in 2014 to bring healthy competition to the South African equity market and break the 130 year-long JSE monopoly.
A2X started trading in October 2017 and now has 69 instruments listed with a combined market cap of over R5 trillion (US $300bln).
Raised in South Africa, Australia & the UK, Kevin has over 25 years of financial market experience including 12 years at Investec, of which 9 were as head of Investec Institutional Securities and Prime Broking division.
Watch the Stream on:
IPO-VID LIVESTREAM PODCAST
In IPO-VID Episode 067: Patrick L Young was joined by former Borse Berlin CEO, Artur Fischer.
Listen and learn from a tech-centric veteran of bourses:
EI WEEKLY PODCAST
Revenue Roaring at Aquis
NYSE Tokyo cooperation
Are CME the new DraftKings?
ICE collateralizes hot air
and there’s talk of a TP ICAP breakup?
20 years on from the first fintech bestseller “Capital Market Revolution!”… “Victory Or Death” is a must read book for anyone interested in the intersection of Blockchain, Cryptocurrency and FinTech as part of the whole future of finance.
PLY: Unless you have been asleep all week, the blob (including Britain’s rump of deranged-EU-remoaners) is doing everything it can to reign in the British government after the leftist institutions of the USA and the IMF jumped aboard a bandwagon to discredit the UK government moving to undo all of their failed economic policies dating back a generation or more. It’s a funny old world, spend wildly as BoJo and his de facto socialist Chancellor Rishi Sunak did, disastrously (throwing grants at Covid concerns instead of fighting lockdowns) is fine but a UK government that realizes it is time to stop the QE fiasco and return to economic growth is being derided…
Early days yet as the UK has been buffeted but it’s worth recalling that the Thatcher government’s economic revolution which halted and reversed Britain’s post war economic decline was serially rebuffed by similar panjandrums of panic — with several hundred economists at a time saying her (ultimately successful) reforms would never work.
Of Interest -
As always, a review of interesting reading to provoke thoughts and consideration… Not sure we agree with much of it….but it’s thought-provoking!
The Jerusalem Post
PLY: And a belated Happy Rosh Hashanah to one and all…
The Harvard Law School Forum on Corporate Governance
A 2021 survey by Charles Schwab found that 15% of all U.S. stock market investors said they first began investing in 2020.
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You can also check out the “Reflections From Young’s Pyramid”, it illustrates the relative value of exchanges around the world.
Or the “ICE Cost of Borrowing 2020–2022” An Interest Rate Comparison, which illustrates the end of the funny money era of QE and how interest rates have already had a major lurch up from their previous region of zero to, even negative, levels.
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