Perhaps there was a time when a person could see a dollar earned and a dollar spent. Maybe, once, money could have been regarded as credit for goods or services rendered. Even if currency was ever that simple the markets today have complicated that a hundredfold.
“Open Outcry” is a documentary by Jon Else about esoteric trading at the Chicago Mercantile Exchange, the abstract market gymnastics a dollar is put through, and, ironically, the visceral thrill of traders throwing themselves bodily into economic theory.
The video, which will be broadcast on KQED-TV Friday at 11 p.m. and repeated Sunday at 6 p.m., is shot in the futures pits of the Chicago Mercantile Exchange. For the economically ignorant, a future is a contract to buy a certain amount of goods on a certain date at a certain price. For example, cattle. Beef can be bought in advance, then that futures contract can be traded over and over until the date of delivery.
Of course, the traders on the floor are interested in trading, not delivery, of beef. You will never see a cow in the cattle futures pit, only people frantically yelling numbers at each other.
Jon Else, the head of the documentary program at the UC Berkeley School of Journalism, admitted that he knows “less than the average person about capital markets,” and that “Open Outcry” is not a primer to how markets operate, but rather a peek into the experience of capitalism. Because unless you look very closely and very carefully, capitalism can look like chaos.
With hundreds of people wearing colored jacket smocks crammed in a space about the size of a tennis court, each gesticulating wildly and screaming out numbers, the futures pits appear to be a lawless melee. But there is a system, and Else’s camera seems to be working on the assumption that if you look at something long enough, eventually you’ll figure out what’s going on.
Capital markets would not be too difficult to understand if futures trading were limited to hamburger beef, and such things a person could physically touch. The trouble comes in trading intangibles like interest rates, or rates of interest rate change differentials.
“When they get into things like trading options on futures on Eurodollars, which are in fact interest rates on currency held outside the United States, I have to check out,” said Else. “That’s not a hamburger to me. That goes somewhere into a world that’s way, way beyond hamburgers.”
The 50-minute film is made up of 10 long camera shots (actually, 11 shots if you look for the hidden edit), each between 10 and 15 minutes long. Considering the average sustained camera shot in a typical TV sitcom is roughly three seconds, these marathon shots panning the active pits are both a meditation on money and a nearly scientific observation of group activity.
“All of the skills that those traders use are cave man skills,” said Else. “Who can do lightening-fast calculations in their head? Who has a loud voice? Who is tall? Who has sharp elbows? Who has physical strength and agility? Who has the ability to stand on their feet without taking a leek for six hours at a time? There are not a lot of places in life to test all those evolutionary skills every day. I think that’s part of the attraction.”
The apparent irony is the way the film shows us the traders on the floor going through physically grueling all-day combat for split-second trades on items that only exist in theory. Of course part of the attraction is the enormous amount of money that can potentially be made on the floor, but in the heat of the trading frenzy we can see how money can slip loose from the idea of credit for goods and services to become a factor manipulated by the trading process.
“Actually, I went in kind of cynical,” said Else about how he first approached the Chicago Mercantile Exchange as a documentary subject. “I went in with a vague sense that the capital markets in general and the stock markets were somehow tainted with evil, that somehow their only reason for being was for rich people to get richer. With that particular market, I came away with the impression that that was distinctly not true.”
Although the documentary does not explain for the layperson how trading works it does raise the cultural question of what is the nature of money as a social and political force. Through voice-over we hear traders postulating that money is fascistic in that it adamantly seeks its own stability. Or, that money is essentially democratic, and handling it in these markets is not dependent on race or creed or background.
“I sort of looked for a way to poke a hole in that argument, in my own mind,” said Else. “But looking at the floor, there, I couldn’t. Money really is, for better or worse, blind. Money is always looking for the highest return, like a very aggressive piece of DNA.”
By the end, the idea money has lifted itself off of dead presidents and become like a biological force of nature. The control of markets, or when markets go out of control, assumes the tricky ethical dilemma of Dr. Frankenstein.