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A love letter for the NYMEX

Monday, June 1, 2009 | 11:39 a.m. CDT; updated 4:30 p.m. CDT, Wednesday, June 3, 2009

You can’t always predict when love will strike. Certainly I didn’t suspect I would become smitten, with an economic institution of all things, on last Friday, but it happened just the same. Fondness for a dapper diplomat or a debonair astronaut I could have anticipated, but it is the unlikely New York Mercantile Exchange that has besotted me, and I’ll tell you why.

It started, as so many torrid affairs do, with forbidden fruit. The New York Mercantile Exchange, a 137-year-old marketplace, has been closed to the public since two planes crashed into two buildings that once stood yards away. I was only allowed to take a tour by virtue of being in a business journalism class taught by a fantastically connected, string-pulling professor, and I was, admittedly, enchanted by that elitism. But once I got inside the Exchange, affectionately called the NYMEX, my crush was substantiated.

I learned that the site began as the Butter and Cheese Exchange (a name as endearing as any person’s gurgly infancy) where 62 producers traded their dairy goods. From those modest bovine roots, the Exchange developed into an exhilarating forum where hosts of contracts for generic products, from natural gas to gold, were chaotically swapped and bought and sold by hundreds of traders — and not necessarily the kind of traders everyone wants to throw shoes and rotten tomatoes at, but we’ll get to that. 

You might best visualize the NYMEX from its cameos in the movie biz, particularly in the 1983 film “Trading Places,” wherein Eddie Murphy and Dan Aykroyd bring down two magnates by manipulating rumors about prices of frozen orange juice concentrate (their unlikely Achilles heel).  In the final scenes, men madly swap papers representing the product in their so-called “open outcry trading.” They undulate and yell in pits that sit beneath high walls of incessant tickers; they try desperately to predict the market and be in the black when it closes.

You can feel the desperation and excitement tied up in the brokers’ split-second, high-stake decisions: The bawled offers can make the traders or their clients rich or poor in a matter of seconds, and the aggregate of their interactions is responsible for determining the prices and controlling the costs of the world’s raw materials. Needless to say, if open outcry trading were a competitive sport, I would buy season tickets (as well as a foam “Number 1” finger the size of a refrigerator) and start a fantasy league.

Our tour guide told us, much to our surprise, that many of the traders are blue-collar guys who have inherited or leased one of only 816 trading rights required to do business at the actual exchange; this means that though some brokers represent the (now disgraceful) investment firms, many, including our tour guide in his years on the floor, are just middle-class dudes from New Jersey. And there’s something magical in watching average people ply the family trade and simultaneously determine the fates of millionaires: They seem the hearty, humble pavement of Wall Street.    

Knowing about their background only adds to the palpable humanity that is so integral to my love of the NYMEX. Though electronic trading has decreased the number of brokers at the exchange, hordes of men (and about five women) still insist on doing their business face-to-face and hardly over a polite lunch; the NYMEX, for example, built a “cage” for a pregnant woman who wanted to stay on the floor. But thrills aside, just knowing that the futures of oil are not, it seems, to be swapped via Twitter now or ever, is enough to make me swoon.  

The traders, clad in collared T-shirts, also seem more human than most of the suits gliding around Wall Street because of their casual dress, though their look is a relatively recent phenomenon. After the World Trade Center fell, the brokers found that their suits were being ruined as they trod to work through the ash and smog that lingered after the tragedy. As a result, the NYMEX changed its dress code, making it probably the only institution in America to relax (at least some) regulations and hassle people less after 9/11.

The brokers evade even more pretentiousness by using nicknames that are easy to call out should a seller want to identify a buyer, and there are few things that are more fun than coming up with and using nicknames. Most are only three or four letters worn in all caps on a large badge, but those few letters have to be chosen carefully, as the monikers stick in and out of the NYMEX.

A few favorites I saw include an Indian man who went by CURY and a rather hairy gentleman called CHWY. Our guide, formerly JRSY, recalled some rather scandalous ones, such as QQQQ and LXIX — I leave you to get the jokes — that went under the radar, as well as a gentleman who went by FIRE until someone pointed out that the other traders really shouldn’t be yelling that indoors.

Perhaps the bulk of my love is related to how the NYMEX exhibits the inevitable intersection of Main Street and Wall Street realities, even during a time when the world has pit those two as nemeses. The history of the exchange is little known and enchanting, and watching traders do business is almost unspeakably exciting.  But most captivating is how their faces remind you that business isn’t just a soulless machine run by CEOs: It’s a human endeavor to admire — and perhaps even love a little on occasion — too.

Katy Steinmetz is a columnist and reporter for the Missourian. She moved to Columbia after spending two years teaching in Winchester, England, and one year in Edinburgh, Scotland. She has freelanced for a variety of publications, including 417 Magazine in Springfield, Mo., and the Guardian in London. Katy plans to complete her MU master's degree in 2010.


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