It was hard to believe, even thirty years ago, that this was the best or most efficient way to do anything. No doubt you’ve heard it on the news but, being from Chicago, I can’t resist a comment.  Today is the day the trading pits are closing at the once mighty Chicago Board of Trade and the Chicago Mercantile Exchange.  Everyone is saying it is the “end of an era” but it really isn’t.  The fact is, this style of trading, called “open out cry” trading (a term which no one in Chicago ever seemed to actually use) has been obsolete for quite some time.

If there was anything a computer was designed to do, this is it.  But there was something irresistible about watching the people in the funny, lose-fitting jackets throw fingers at each other.  It was a grade school field trip.  It was somehow part of Chicago’s legitimacy as a financial center, linking agriculture to finance.  In the 1980’s when metals, currencies and financial instruments eclipsed trading in the traditional commodities–such as hog bellies, orange juice and winter wheat #5–things really took off.  The distinction between making markets work and legalized gambling became a little more difficult to discern.

While virtually impossible to understand for the uninitiated outsider, there was a simultaneously well-coordinated and chaotic system in place.  A new kind of entrepreneur was created: the “Trader.”  People got rich and did so based on a set of skills and a personal calculus that seemed to break all the rules that the rest of us business types were living by.  You wore blue jeans to work; you yelled at each other; you were finished by mid-afternoon.  You might have been driving a taxi cab last year but now you were a Trader at the CBOT.  The trading pit was an equal opportunity employer.  All you had to do is buy low and sell high or sell high and buy low.