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Clearly, we are in a new paradigm and apparently independent central bankers around the world are playing a new game.

A few Barx salespeople were let go this week, which doesn’t surprise me. After all, given the platform’s reputation, it must virtually sell itself. While talking about dogs (Ed: That’s the most tenuous link of the week), I got an email this week from Peter Klein, who used to run Saxo Bank’s London operations.

I was reminded this week by my old mucker Paul Day, deputy head of research at MIG Investments, of a prediction he made a year ago. He said sterling would be the dog of the FX market in 2008 and that it would plunge to parity against the euro – a prediction I thought singled him out as being barking mad.

Saxo’s decision to sponsor a leading cycling team is one that many predicted would generate bad publicity. So far, the credit ledger is still positive, but there must have been some anxious moments on Monday at the publicity launch of Team Saxo Bank-IT Factory. For, just as it was about to take place, it was announced that IT Factory, the co-sponsor, had gone bankrupt. Expect more on this story. Danish paper, Berlingske Tidende, reports that IT Factory’s managing director Stein Bagger is being sought by Interpol on suspicion of defrauding the company of €65 million. Bagger has not been charged with any crime.

The Parker FX Index rose 2.53% in October, its largest monthly gain since 2003. Of the 71 programs in the index, 46 reported positive results and 25 incurred losses. On a risk-adjusted basis, the index was up 0.99%. Performance ranged from a high of 32.70% to a low of –6.71%. The index is now up 4.56 on the year.

Data released by Icap, CME and CLS all provide support for what market participants have been saying for the past few weeks – liquidity is drying up. Daily turnover on Icap’s EBS platform averaged $167 billion in November, a fall of around 32% from November 2007 and from October 2008. Similarly, the CME saw turnover in its futures and options average 471,000 contracts per day, down 26% on November 2007. Elsewhere, CLS says it settled a daily average of 588,416 instructions with a value of $3.25 trillion. In comparison, it settled 727,934 instructions in October and 488,000 deals in November 2007. Of course, November 2007 was an exceptionally busy month, which has probably exaggerated the severity of the annualised decline.

Things are getting so bad I hear Slade has re-recorded its Christmas classic Merry Xmas Everybody with a fresh set of lyrics (possibly):

The CME has hired Mark Thompson as a director. His main task will be to look after the exchange’s hedge fund clients on the US’s eastern seaboard. Thompson, who joins the exchange from UBS, will be based in New York and report to Tina Lemieux, the exchange’s managing director, hedge funds and broker services.

-- Sarika Gangar

Commercial real estate buyers and sellers, hope to bridge gap between bid and ask prices

The $1 billion Stanislaus County (Calif.) Employees Retirement Association has hired Capital Prospects and Legato Capital Management as managers of emerging managers. Capital Prospects will handle a $50 million small-cap value equity portfolio, which is currently invested in the iShares Russell 2000 Value Index Exchange Traded Fund. Legato will handle a $33.5 million small-cap growth portfolio, replacing Mazama Capital Management, which was terminated for performance reasons. For the year to date ending Oct. 31, Mazama’s small-cap portfolio returned -46.1%, compared with the Russell 2500 Growth Index at -37.25%. Brian Alfrey, chief operating officer, declined to comment.

While concerns about loan growth, liquidity and profitability have taken centre stage in recent weeks, there has also been plenty of excitement in Brazilian banking about M&A.