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Profit & Loss

And Another Thing... A few of you have been in touch to say you couldn't make the Insights call on Tuesday but were still keen to hear my thoughts on Mark Johnson being handed down a two year jail sentence. As flattering as it is to have people want my opinion on it, I really only want to go into brief details because firstly there are things better left said on an informal, off-the-record call, and secondly, you should have been on the call!
And Another Thing... I must confess something I did not expect to come out of last week’s Forex Network London was people saying to me that they are worried about the influence of data. I should stress that they were not suggesting data was useless – rather the inference was that some of their service institutions are over-reliant upon it and, even worse, a few have seen it as a panacea and subsequently forgotten some of the more traditional values in a relationship.
And Finally... There was, naturally, quite a lot of attention on the return of EUR/CHF to 1.20 on Friday, most of if, naturally again, frivolous. On a return basis, anyone who didn't care about mark-to-market would have been back in the black in the mid-1.19s thanks to carry, but that didn't stop people like me joining in the frivolity, tweeting the market may have an issue working through the 1.20005 offer for 20 yards. It shows though, how much the event is embedded in the market’s psyche that we are commenting about it.
And Another Thing... You can’t fight progress, but you can rein it in and make sure it goes in the right direction – advances are not always positive. There is so much chatter about financial markets withering and dying if they do not go the fully quantitative path, but is that right? I understand that these firms are largely hiring engineers and mathematics or physics grads but while these people have undoubted strengths and can seriously add value to a business, they are not the be-all-and-end-all.
And Finally... There is a lot of press around discussing the struggles currency managers are having in making money in markets that ostensibly should be fertile ground. We have some real moves, event risk, interest rate divergence and a changing market structure – all of which would suggest there is an opportunity for everyone, but it's not happening. One of the reasons for this is that different narratives are driving markets at different times - and that makes it hard for a single strategy to succeed.
And Another Thing... One of the reasons I enjoy our conferences so much is the capacity of the high quality speakers with whom we are fortunate to engage to raise a point that just makes you think, “why have we not done this before?” This week we held our inaugural Frankfurt conference and during our Technology Futures session the discussion turned to the role of technology in making markets safer. It was one of those great sessions where I turned up to moderate armed with a bunch of themes and questions following (ahem) “extensive research” and got to ask one of them!
And Finally... Is it wrong to be a Clint Eastwood fan at my age? Why do I bring up Dirty Harry? Well I am currently towards the end of a seven hour layover in Hong Kong airport and happened upon the film FireFox, in which everyone’s favourite orang-utan sidekick stars as a pilot who steals a thought-activated fighter plane from the Soviet Union. Obviously in my usual convoluted way I managed to get from this to trading FX and to the possibilities of a human trader using thought control to execute trades.
And Another Thing... Does the FX industry want to continue along the road to modernisation, or has it gone far enough? Answering this question is the starting point for the issue I want to discuss, because there is a push out there for same-day and then instantaneous settlement of "spot" FX transactions, but at the moment who would want to be involved in that? All it would take is one slightly contentious move and one large barrier or stop executed and we would be in a pile of trouble.
And Finally... Those of us, me especially, who have been waiting for the e-revolution in FX to hit the swaps markets may have reason for optimism today, although actual hard evidence through results may have to wait quite a bit longer. CME's new FX Link launched this morning in Asia, without much fanfare it has to be said, but launch it did - and it could be the start of a market structure change that we e-FX swaps proponents have been expecting.
And Another Thing... Reading the summary of Employment Judge Jill Brown, who found that Barclays had unfairly dismissed its former head of automated FX trading David Fotheringhame earlier this week (and yes, you did read it here first!), I found myself shaking my head at yet another example of a bank throwing a member of its staff under the bus. The more I read, however, I found myself thinking that everyone involved was being shoved in front of the number 45 - thanks to a regulator's hastiness.