Wednesday, July 24, 2013

Dear Senate Banking Committee, Re: Goldman and the LME, the L stands for London

And they do things a bit differently.
Note the comfy sofa:

Traders and clerks react on the floor of the London Metal Exchange in the City of London February 14, 2012. REUTERS/Luke MacGregor

Not to be found in Chicago, no sir.

From MoneyBeat:
Stay Puft, Oddball, Womble…and Other Inside Tips About the LME

Nicknames including ‘Monkey’ and ‘Peewee’, fines for chewing gum, and a leg on the red sofa are a number of quirks you may not know about the 136-year-old London Metal Exchange.

After opening its doors to journalists this week, we know a little more.  Some important nuggets emerged, among them:

1) Call me ‘Monkey’

Monkey, Pockets, Pee-wee, Dipper, Slippers, Flea, Bug, Tick, Zzzz, Scotch Egg, Flame, Stay Puft, Oddball, Womble, Ruggy, Shrek, Tree and Twig. These are just some of the nicknames you might hear shouted across the LME floor on any given day.

Famed for having traders from East London and Essex (a much-maligned east of England county), the LME has become a bit like a family business over the years. A trader that isn’t related to or family friends with someone else on the floor is an unlikely find. Flea and Bug are brothers and Bug’s son is called Tick. Tree and Twig are cousins.

The nicknames are usually given when traders start as clerks and are tied to a number of colorful stories.
Monkey comes from the saying “Speak to the organ grinder not the monkey”. Apparently when the trader in question was a clerk he was not that knowledgeable, so the dealer he worked for used to call him Monkey in reference to this saying.

Pee-wee was given his nickname after 1980s US comedian Paul Reubens’ comic fictional character Pee-wee Herman, because of his squeaky voice.

Scotch Egg is in reference to the trader’s round physique and ginger hair that looks like breadcrumbs, according to another LME dealer. Flame once burnt his hand on a shot of flaming Sambuca. Stay Puft looks like the Stay Puft Marshmallow Man in Ghostbusters, and Shrek because he looks like…

One trader said: “It’s just always been the case [traders having nicknames]. It’s slightly like a club without being a club. I think a lot of people have been brought into the market through friends or relations so it’s likely to have started that way.”

2) No chewing gum

Traders may have ditched the top hat and tails of old, but etiquette on the floor is still alive and well. To make sure traders abide by this, the LME has a series of penalties for “conduct of an unprofessional nature” that can see traders fined £500 for a first offense, up to £4,000 for a fourth act of misconduct.
Offences include:
- Unacceptable conduct such as slovenly behavior or drunkenness
- Chewing while dealing by open-outcry
- Failure to observe the exchange dress code — including top buttons done up at all times
- Failure to observe the exchange food and beverages code, which includes no chewing of gum on exchange premises at any time
- Reading newspapers or magazines in the dealing area
The fines are accompanied by “penalty points”. After a certain number, traders face suspension from the ring for a number of days.

3) Everything happens on a Wednesday — unless the Queen dies...MORE