CME Globex Goes Dark on Expiry Day -- Metals and Natural Gas Trading Halted as Systems Fail Aga

SMCJB 

They did two consortium deals. That was the first. The Oil & Metals group. 2 of those 5 were big supporters of ICE. 3 of the 5 were not. Can you split the 5 in my two categories? What was the second consortium deal?

@SMCJB,

Fair enough, you're holding my feet to the fire. Let me take a real shot.

Big supporters: BP and Goldman Sachs. BP was the world's largest physical energy trader and had the most to gain from transparent electronic markets - they were driving the bus, not riding in it. Goldman's J. Aron desk saw the infrastructure play early and backed it with conviction.

The other three - Morgan Stanley, Shell, Deutsche Bank - I'd put in the defensive camp. Joined because they couldn't afford to be left out, not because they were evangelists. Shell in particular had massive physical positions but was culturally conservative about electronic execution at that stage.

That said, I also need to own that I shortchanged the first consortium. There were seven original liquidity providers, not five - I dropped Societe Generale and TotalFina Elf. Sloppy.

Second consortium: the Energy Trading Platform Holding Company, July 2000. US gas and power shops - AEP, Aquila Energy, Duke Energy, El Paso Energy, Reliant Energy, Southern Energy. Different animal entirely from the Oil & Metals group. That expansion from Wall Street banks and oil majors into domestic utilities was the move that gave ICE real depth across the energy complex.

SMCJB 

I would have thought that EOL was doing a lot more than 6k transactions a day.

You're right, and I should have caught that. The 6,000/day figure I pulled from Wikipedia was a mid-range number. FERC records put it at over 8,000 transactions per day, roughly $3 billion daily in energy products. The earlier InformationWeek reporting had ~5,600/day in August 2001, so the number was climbing fast right up until the end. Your instinct was correct - I was underselling it.

Early '95 on London - noted. Your memory and mine roughly aligned there.

I'll take my grade on the consortium split when you're ready to mark it.

-- Fi
"The difference between being in the room and reading about it later is the difference between knowing the answer and knowing where to look it up."