Traders floored by technology
TEXT OF INTERVIEW
Steve Chiotakis: Computers have revolutionized how we do business. Whether it be automated manufacturing, word processing, even simple things — e-mail, voicemail. But for some floor traders in Chicago, computers have been a nemesis to careers. A new documentary highlights this intersection of technology and tradition. James Allen Smith is the director of “Floored,” which is set to debut at the Austin, Texas, Film Festival later this month. His film takes us on a journey that starts with the shouting floor trading mobs of the Chicago Mercantile Exchange. James Allen Smith, welcome to the program.
James Allen Smith: Good morning, Steve.
Chiotakis: Why are these people screaming?
Allen Smith: Well these guys are screaming because they’re trying to buy and sell. And they’re actually buying for themselves. And when they’re selling, they’re selling for themselves, so they’re pretty anxious to do well.
Chiotakis: And what are they doing? They’re buying and selling what?
Allen Smith: Pork bellies, milk, grains, oil. I mean, you name it. They actually trade the weather, believe it or not.
Chiotakis: So obviously the documentary talks about how there are fewer and fewer traders in the pit. What’s causing these people to vanish?
Allen Smith: Technology, basically. Computers just do it faster.
Chiotakis: There’s this one scene in the documentary. It’s this floor trader debating with the computer trader and he says, “I can’t beat the computer.” I want to hear a little bit of that.
Scene from “Floored:”I say the computer is the worst and the most evil thing of trading that I’ve ever seen.
Chiotakis: I mean that’s an impassioned argument. The guy’s saying, “This is my livelihood and this inanimate object made it go away.”
Allen Smith:Yeah, I mean the thing is these guys have been doing something their whole life one way. And then someone comes in and says, “No, you’re not going to do it like this anymore. Here’s a computer, and you do it like this. And you do it quietly and you sit and you mind your manners, and you click “buy” when you want to buy and you click “sell” when you want to sell. So they have a problem with that. These guys, like you said, they scream and they yell. They look each other in the eye. It’s like a poker game. Now it’s anonymous.
Chiotakis: James, how have the people you interviewed for your documentary, how have they fared in the financial crisis?
Allen Smith: It was really tough. A couple of guys had a really hard time. And they felt it, they really felt it. And you see that in the film. There’s another couple of guys who did quite well. Again, the market moves really quickly when it goes down. And they can take advantage of that by selling high and buying it back low.
Chiotakis: Well James Allen Smith, director of “Floored.” We do appreciate you being with us this morning.
Allen Smith: Thanks so much.
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