Here Is The City gets a number of folks who regularly send in contributions. One guy in particular, we're going to call him our 'Highly Placed Professional', has a good understanding of the markets, fairly decent writing skills and the kind of caustic wit we like - so we're going to give him some air time. Here's his first piece:
'It's interesting to see how the post credit crunch blues are permeating dealing floors and institutions, as many front office types fear that call from HR, which is swiftly followed by being dragged into a meeting room, unceremoniously fired and escorted out of the building before you can say 'asset-backed securities'. Unfortunately, this year there will be rather more Christmas sackings, than stockings.
Only this very morning, I heard a trading colleague quip, 'Christmas has come early this year, mate'. He wasn't referring to a huge windfall trade, a large bonus or even the delights of a certain young lady he experienced the night before. No, his remark merely described the deathly pall of quiet that has pierced the very heart of the market, and seeped into the corner of every trading floor, every meeting room and every canteen queue. Every Christmas there's always a quiet spell when you can catch your breath, surf the net and indulge in some office gossip - because not a lot else happens. And that's a nice feeling. But this year, that 'Christmas' feeling kicked in from late August.
At first the lull was kind of fun - peppered by the odd write-down, a few sackings and the three CEOs who lost their highly-paid jobs. But, as the weeks have dragged on, some are now wondering if the market will ever come back - and that's starting to eat away at the collective front office psyche. One trading colleague has now changed his Bloomberg header - to read 'Big Issue, Sir'! I told him that I was intent on improving my journalist skills. He said that it looked like he'd soon be improving his gardening skills!! Old joke, but no-one's really laughing now'. Happy Christmas.
'Since July, nearly every asset class has been the focus of special reports to our board. Business opportunities, even when they have been around, haven't been aggressively pursued. In the midst of the credit crunch our books have been cut down. I guess our strategy now is going to be 'shrinking to greatness'!
'Subprime has taken its toll on the whole Street. Panic pervades the markets daily, and it seems that every morning when I switch on my Reuters screen and trawl through the news, there are plenty of stories relating to the carnage suffered by the banks (not a lot about the funds though, which will be the next phase).
But we certainly haven't been quiet in commodities. The last few weeks has been complete bedlam, particularly in Metals and Oils. I can't remember the last time I managed to get out to lunch with a client! There is plenty of pain out there, with Option volatilities going through the roof, and patches of illiquidity making the subprime revaluations seem like a walk in the park. Only at the beginning of the week, Copper had a $470 range in one day. I do imagine that the Christmas slowdown is on the way, but it seems a long way off from where I'm standing now!'.