From the January 01, 2010 issue of Futures Magazine • Subscribe!

For crying out loud: From open outcry to the electronic screen

For Crying Out Loud: From Open Outcry to the Electronic Screen
By Leo Melamed
Wiley
343 pages, $39.95

There is a saying that goes, “The winners get to write history.” CME Group Chairman Emeritus Leo Melamed and his band of renegades won the battle for the future of the Chicago Mercantile Exchange back in the early part of this century. Melamed recounts the machinations that went on as he actively moved to change the direction of the CME as it transitioned to a for-profit organization and prepared for an initial public offering in his latest book, “For Crying out Loud.”

The book is an interesting look at the behind the scenes arm twisting that went on at this critical point for the CME. It is hard to examine a book written about a fairly recent event, especially one which I also covered. Many of us were surprised by the leadership battle. The team of Jim McNulty and Scott Gordon seemed to work as a cohesive efficient unit. In hindsight and with Melamed’s perspective, there is an “aha” moment where you see the perspective of the longtime Merc seat holder or board member who thought they perhaps worked together too well.

If there is a common criticism of Melamed, it is that he sometimes takes more credit than is his due for the innovations of the futures industry in general and the CME specifically. I suspect that criticism will only grow on the heels of this book. While throwing him a few bones, he does not give much credit to Jim McNulty for the major progress the CME made in these critical years. He argues that most of the heavy lifting occurred before McNulty’s arrival. All the heroes of the CME’s tremendous success are there now or have passed on in the case of Fred Arditti, and all those who have left save a few people tossed out during the Gordon/McNulty years were pushing the CME in the wrong direction. I would not argue against this view as I was not close enough to say who should get credit for what, but if it is true, the leadership of which Melamed was a part bears a huge burden given the compensation McNulty received for supposedly doing so little.

Melamed does not provide a lot of specifics for his perspective other than a reference to a McNulty plan to sell the clearinghouse. This indeed would have been a mistake. He also points out that McNulty and his team seemed obsessed with the dot-com mania of the time and wanted to position the CME to benefit from this, which obviously also would have been a mistake.

More telling is how this became personal when the executive team in charge tried to push out the old guard, including Melamed and Jack Sandner. Critics of Melamed may argue that was a greater motivating factor in pressing for this coup than anything else. I suspect Melamed wouldn’t distinguish the two given his role in building the CME. Who could argue with that, given what he has accomplished. He certainly earned a seat at the table. In many ways, he built the table.

The story of the 2002 board elections is recounted on just over 100 pages. The majority of the book is a collection of Melamed speeches from various events: award ceremonies, speeches to foreign dignitaries, conferences and graduations. While such a collection has value as Melamed is a great story teller, they seem odd paired up with the first part of the book. And since Melamed often will recount the same anecdote, some anecdotes are repeated in several places, causing the reader confusion. I kept thinking I misplaced my bookmark. It would have been better if he strung these speeches together more seamlessly and not included it with a story of political infighting.

Overall it was an interesting read. I enjoyed the anecdotes, many of which I have heard Leo deliver in person.

Daniel P. Collins is managing editor of Futures.

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