No one can deny that 2016 was an extraordinary year. The Brexit vote, various elections throughout Europe with fringe candidates surging and the off-the-charts U.S. presidential election. But as they say, “all politics is local” and here in Chicago — the risk management capital of the world — the most significant event was the Chicago Cubs winning its first World Series since 1908, which was its first in the Wrigley Field era of the Cubs!
Modern Trader sat down with Cubs Chairman and Co-owner Tom Ricketts to discuss building winning operations, both in finance and professional sports (see “Winning with Tom Ricketts,”).
Ricketts is not unfamiliar with this space as he became involved in the markets, first as a runner at the Chicago Board Options Exchange during the summers while studying at the University of Chicago. He went on become an options trader, but was more intrigued with the fixed income world and founded underwriting firm Incapital, and he is one of our 2016 “10 market makers & shakers”. While best known as the face of ownership of the Chicago Cubs and for his famous family — Ricketts’ father, Joseph, founded TD Ameritrade; his brother, Pete, is the Governor of Nebraska; his mother, Marlene, heavily-funded one of the GOP “never Trump” PACs while another brother, Todd, has been appointed by President-elect Trump as Deputy Commerce Secretary — Tom Ricketts has forged his own course.
He launched innovative underwriting firm Incapital, which pioneered the use of the Internet in underwriting bond offerings and marketed them directly to individual investors and advisors, bypassing the secondary market.
It makes sense that it would take someone with an innovative and independent spirit, unafraid of legacy, to break through the longest drought, fraught with superstition, in professional sports.
It was a year of firsts as our 2016 CEO of the year illustrates (see “Patrick Byrne: The Disruptor,”). Byrne, who is not new at disrupting markets, late in the year raised nearly $11 million in a rights offering for a product aimed at cutting out financial sector middlemen by moving the post-trade process to a shared, distributed ledger. Byrne estimates his blockchain technology could remove up to 90% of settlement costs.
It was that kind of year. In our second annual Modern Trader awards issue (see “30 Moments & Minds that Made the Markets,”) we highlight the people and events that made 2016 such a unique year. It was truly a memorable year, and this includes many of the events that people will be talking about for decades to come.
We also take our annual pulse of the futures commission merchant world (see “Top 30 brokers of 2016: The new sound is optimism,”). While it may seem that futures brokers have been singing the same tune for many years, it is clear that the survivors of the shrinking FCM world are stronger, healthier, more determined and ready to move on from the aftermath of the 2008 credit crisis. And there is room for optimism. Interest rates have moved off of zero, the new Trump administration has promised stimulus spending and a reduction in regulations, as well as a level of unpredictability that is sure to create volatility. Future brokers are primed for what could be a resurgent year.
Cyber-security also emerged as the key issue of the future, both geopolitically and for markets. The U.S. intelligence community has confirmed that Russia was behind hacks of the Democratic National Committee, which may have had an effect on the election. This is no surprise to the leaders of the FCM community who unanimously rate cyber-security as a huge issue that is consuming a lot of time and money. R.J. O’Brien Chairman and CEO Gerry Corcoran says that not a day goes by when there is not an attempt to get behind its firewalls. Other FCMs report the same. It is the war of the future both commercially and politically, so we better be prepared.
Finally, as someone who spent a great deal of his youth in the Wrigley Field bleachers, I must admit it was a treat to talk to the architect of the Cubs championship. I was even able to compare cell phone pictures of the championship parade; my seat was not nearly as close. And it was truly amazing to learn that we both shared a favorite Cub: Bill Buckner from the 1980s era teams (see “Running bases with Tom Ricketts,”).