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People moves: More FX turmoil at Merrill Lynch

Word reaches me that one of my old bosses, Rob Jacques, is making a comeback after having retired a couple of years ago to Germany. He is about to start at Nylon Capital, the hedge fund set up by former Barclays big wig Alan Burnell.

The International Securities Exchange is planning to list options on exchange-traded fund shares invested in securities, gold and cash. The Securities and Exchange Commission recently allowed the New York Stock Exchange and the American Stock Exchange to start trading two gold ETFs, the streetTRACKS Gold Shares and the iShares COMEX Gold Trust Shares, respectively. The ISE, along with rival Chicago Board Options Exchange, have long eyed commodity pool ETFs in order to get more leverage in the burgeoning energy and gold markets (WSL, 3/20). The SEC has relaxed rules for commodity pool ETFs, deeming them to be securities rather than commodities and therefore allowing options exchanges to trade them.

The signs are that, while talking reassurance, the US authorities are really moving towards damage limitation. What the Buffett intervention really implies is that monoline insurers can go hang.

Rumor says they have outsourced their spot-rate engine to a hedge fund, but at this point it's only whispers.

Over the past 25 years, I have met many clever bastards. And I have met many more stupid ones. In particular, I have met a lot of stupid people who think they are clever, and that’s even scarier.

It is inconceivable that SocGen would have been able to rack up such a huge position and loss in a bilateral, OTC market because it would have inevitably filled many of its credit lines.

Time has allowed the dinosaurs – the US exchanges – to evolve and then go hunting once again.

The pace of consolidation in retail FX platforms in the US is starting to accelerate.

Micex, the Russian exchange group that has launched a charm offensive in the west, reports a decent increase in currency activity in January 2008. The exchange says that it recorded 421 trades in US dollar futures in the month with a value of R266.3 billion ($10.8 billion). Average daily volume ran at R15.7 billion ($637 million), which was almost twice as much as in January 2007.

Back in the day, no dealer or broker could live without his Hambros, the little red book that contained a list of active banks, their key staff, telephone and telex (remember them) numbers and Reuters codes. When SocGen took over the venerable UK merchant bank, the book sadly went into decline. For the past few years, the now rechristened Reddbook has been published by 4Cast. While not yet quite restored to its former glories, the book is on the up and it is, once again, an extremely useful reference guide. ACI UK is giving them out free with membership, another reason to join the association.

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