Page last updated at 16:30 GMT, Wednesday, 17 September 2008 17:30 UK

View from the trading floor

By Simon Atkinson
Business Reporter, BBC News, Canary Wharf

Canary Wharf
Tumultuous times have rocked financial centres.

It would be an exaggeration to say the London Underground train to Canary Wharf smelled of fear (if anything it was one commuter's sausage roll breakfast).

But as almost every set of eyes bored into the latest set of gloomy headlines - not least a newspaper report that '110,000 City jobs are to go' amid the market chaos - nervousness might be understandable.

The collapse of Lehman Brothers - which itself looks set to cost 5,000 jobs in London alone - as well as the last-ditch bailout of AIG and the woes of HBOS shares dominated the front pages.

By the time the besuited workers emerged above ground the latest huge story had broken: rumours of Lloyds TSB stepping in to bail out troubled Halifax-owner HBOS.

Looking out across the 550 brokers in the noisy trading room at BGC Partners, senior analyst David Buik shakes his head.

If Lehmans can go down, and AIG can nearly fall apart - well, that makes everyone very nervous indeed
Broker, BGC Partners

"It's pandemonium, just absolutely crazy," he says.

"I can't remember a time like it."

Job worries

BGC is a brokerage, which means it does not buy or sell anything itself.

Instead it acts mainly for banks and large investors, carrying out trades for them in everything from foreign currency and shares, to bets on the direction of interest rates and credit derivatives.

But across its vast trading floor, there is a common consensus about the wider market.

"The mood is bad, bad, bad out there," snarls one broker.

"People in the City are worrying about their jobs. They don't know if they are going to get paid. They worry about their mortgage, their bank, whether their bank is going to be taken over.

BGC Partners office
It is a challenging time for the 550 brokers in the firm's London office

"If Lehman can go down, and AIG can nearly fall apart - well, that makes everyone very nervous indeed."

'On edge'

The developments of Lloyds TSB's rescue bid for HBOS is being watched with particular interest.

Broking firms such as BGC deal with banks across the globe, and so such huge mergers mean that there are fewer banks to do business with.

Added to Merrill Lynch being taken over by Bank of America, the collapse of Lehman, and the string of consolidation across Europe, it inevitably has implications.

"There may be fewer banks to deal with but there are also fewer banks to take the risks, which means liquidity can dry up," another broker says.

One more bit of bad news and it'll bring doom and gloom again
Broker, BGC Partners

"So we feel more a little more on edge. "

Stress balls

Dwarfed beneath the tower which houses BGC and a number of major firms, including Barclays, is Billingsgate fish market - home to a more traditional type of trading.

But the view from the 19th floor is dominated by the other Canary Wharf skyscrapers, which include the soon-to-be-empty Lehman Brothers offices.

As is the case with most offices in the City or in this part of east London, the signs of pressure are clear.

One worker squeezes a football-shaped stress toy, complete with company logo. Another sighs and massages her own shoulders.

Customers outside a Halifax branch
Bank mergers have implications for traders as well as customers

Desks are littered with packets of paracetamol and vitamin supplements - though in a suggestion that times are still not so tough, they lie among invites to drinks events and application forms for private members clubs.

Another broker has four mobile phones on his desk, lined up alongside a Blackberry, though admits he probably doesn't need them all.

'Volatile markets'

The noisiest section of the floor houses a team of brokers who are matching buyers and sellers of options pegged to the path of European interest rates.

There is so much movement you have to be careful not to end up with a bad position for your client, or they can lose a lot of money
Broker, BGC Partners

"The markets are so volatile at the moment with really violent swings that there is a lot of interest and a fair bit of pressure," a broker says, in between snatches of conversations with banks in France and Germany.

"Normally the movement in price is just around the edges, but when there is so much movement you have to be careful not to end up with a bad position for your client, or they can lose a lot of money."

Brokers next to one another scream into their phones, signalling they have a would-be taker for a deal.

One swears at his colleague who got in first to secure the trade - though minutes later they talk civilly.

The chatter on the trading floor is incessant - staff pausing only for glugs of strong coffee and gulps of water.

(And at the rate they get through it, it is little wonder the trading floor's canteen only sells Evian in two litre bottles.)


By contrast, on the equities desk, which handles shares trades, business seems calm.

"Customers are keeping their powder dry, taking stock of the fall-out of the Lehman's collapse and assessing their positions," one broker says.

Billingsgate Fish market in the shadows of Canary Whafr building
Trading in the Canary Wharf district is nothing new

Only in some of the less mainstream markets where there is little exposure to the problems surrounding sub-prime loans, is trading at normal levels.

So when will things improve?

"I've given up on second guessing," concedes another broker.

"If AIG had gone under it would have been financial Armageddon, but now it seems that things are okay.

"It's just an example of how fickle it all is. One more bit of bad news and it'll bring doom and gloom again."

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