March 1969 found me walking down one of the tiny streets that are very common in the City of London. This one was Abchurch Lane where Amex was situation. A smart imposing building where one was confronted by a large scale model of a Wells Fargo stagecoach on display in the banking hall. It seems that, although there was a bank called Wells Fargo, the stage coach line was owned by Amex.
The dealing room as a bit on the tatty side with simple telephone equipment and a line of telex machines, as expected. However, the room appeared to be shared with the post department! It turned out that there was a new dealing room being built but not until the summer.
My job was to trade Deutsche Marks (and Canadian $ as no one else understood them) and, unlike my previous positions was mostly Money Market rather then FX. This was my first job in a trading room that didn’t have a lot of built-in business so I was now expected to use my brain to make money!
My new boss was a very short man called Bob Savage – ex-Barclays Bank and very aggressive. Mind you, he wasn’t overbearing in his management and was content to let us get on with our jobs without a heavy oversight. Eventually, he moved to New York and ended up as the overall boss of the American Express worldwide! I have one “amusing” story about my relationship with Bob. When we moved ingto the new dealing room, it had proper trading boards, rather than the “cheap” GPO versions. He had a line connected up to our boards if he needed ahything. One day, his light came up and both me and Alan Langley went it. I heard Bob ask if we know the address of Tradition (one of the brokers on our board). Being keen, I jumped into their line to ask them, in the meantime saying to Alan – “Why the f*** doesn’t he ask them himself (f*** being a word in common usage in the highly charded atmosphere of most trading rooms). A voice came in my ear (Bob had obviously done the same as me) and said, dryly – “I am!”. Nothing more was ever heard of the event- like in F1, it could be called a racing incident!
Next up was the chief dealer. Another short person, he had come from Westminster bank. He was a strange person who loved ‘The Organist Entertains’ – a long running BBC program about theatre organs and admitted to listening to the program whilst in the bath. As it finally happened, my brother-in-law, Terry Carter, ended up producing that program on Radio 2. Alan concentrated on our deposit books. We were always needing to borrow sterling as most of our incoming deposits were in US dollars or Deutsche Marks so we had to finance our Sterling book with market deposits. He had a very good relationship with a broker from Short Loan and Mortgage. This broker was unknown to me as they dealt purely in Sterling and my background at the District Bank never involved the Sterling deposit market as that was dealt with by the management on the banking side. His contact there was only ever known to me as ‘Black Mac’. All I remember is that he was the brother of Bill Maclaren, the famous rugby commentator. The repartee between the two of them was extremely humorous. He was, like Bob Savage, very hands off and keen to let us get on and do our jobs without interference.
The only other dealer in the room alongside me was Alan Langley. It seems that the dealing room in Amex was a fairly recent innovation and Bob Savage had come from Barclays to get it onto a professional trading basis. To that end he brought one of his dealers with him. Alan’s job was to trade the USD/GBP book which meant dealing in both the spot and the forward markets. He was a very professional dealer but had one little flaw. He always knew best and seems to regard the bank’s trading rules as if they were optional. I had a conversation with him once, as we were going to lunch on the following lines: “Aren’t you over the limit for leaving the room (he had taken a position in cable (see below)) for a few million and was supposed to reduce it if he was going to lunch). “Yes, but I have put the dealing slip in the draw so it hasn’t been recorded!” I suggested that he couldn’t win doing this. Either he would make a profit, in which case, he couldn’t claim it, or he would make a loss and get into deep water. He just shrugged and admitted that it was something that he did quite regularly. Mind you, he was a very good dealer so the down side never came true!
The last person in the room was the positions clerk – David Britton. The positions clerk’s job was to take our handwritten trading slips and enter them into a ledger. This way, we could keep track of what risks the bank had. This was way before computers became common in this role – and a long way before I started writing such programs! He was a quiet, confident, chap and very good at his job. We got on very well and had an ongoing relationship for quite a few years, even when we had both had moved on. More of this later.
My main role was to trade the Deutsche Mark deposit book but, because the chief dealer was covering USD and GBP, and Alan Langley was trading the USD/GBP fx book, that left pretty much everything else to me. Firstly, we got fairly regular Canadian $ activity and, guess what – I was the only one that understood its weird ways. Secondly, we had a very persistent branch manager in Frankfurt – Gerhard Tarantik. In those days, UK trading of US dollar deposits in the short term – mostly overnight maturities – were severely effected by the overnight market in New York. I will write an explanation of that later. Gerhard seemed to have some special insights when it came to overnight deposits from Thursday to Friday and also over the weekend. These were the two periods mostly affected by the NY market. In those days, the main USD market in Europe (and still is) was London. Gerhard seemed to get a quite high volume of trades and the only way that he could lay them off was in London, which meant through us as he wasn’t given any trading limits with London banks or branches. This meant that he would call often on Wednesday and Thursday for, what is known as Tom-Next.
My problem was that our limits for London banks and branches were not really big enough to handle his volumes and I was the one that had to manage our end. Because we used to run out of top quality – i.e. US branch – counterparties, my price to Gerhard got lower and lower. Eventually, one day he blew up. It was left to me to explain that he wasn’t going to get any better prices all the time that he kept the volumes up. This had repercussions later in my career.
Life at Amex was pretty good. The set up worked. Bob kept out of our hair, there was no big push to make profits over and above our natural business and, being a decent sized bank, there were no problems in trading. One of the really good things that came up was the European Branch Conference in Vienna. Now, I had been overseas twice before – once to Ireland for a holiday with my parents and once with the school to Italy. Now was a chance to go, as an adult, and see a new city. We flew out on the Friday afternoon. I remember being pleased to see a road sign to Bratislava. So what? Well, at that time, Bratislava was in Czechoslovakia and, thus, in the Soviet bloc. I had a bit of time to wander around so I caught a tram to Radezky Strasse – Radezky being familiar due to the Strauss Radezky March. When I got there it was undistinguished except that there was a bridge over the River Danube. I remember this because the river was definitely NOT blue – grin. It was a very good weekend – sitting down all day discussing trading policies, none of which would be followed, getting to know everyone else and having a great evening on the Saturday at a very Viennese restaurant. Sunday morning was spent at the Schönbrunn Palace, of which I have vague memories of the facade. Of course, I got to meet Gerhard so my relationship with him got a bit more personal. I do remember embarrassing myself trying to speak German to him but only because I got my grammar wrong! My flight home was a problem. For some reason, I travelled on my own and had to come back via Paris. My flight from Vienna was delayed and had just a few minutes to get between flights. Escorted by a stewardess and both of us running full pelt, I made it but my luggage didn’t. I had some long discussions with British European Airways (BEA) and was told that I would get full compensation if it was missing for more than 7 days. I could see me getting a new suit, new shirts and so on when I got a call on Thursday to say that my bag had turned up!
Valerie was pregnant when I joined the bank so it was clear that I would need some maternity leave. This wasn’t codified like it is now but everyone knew that I would have to dash of sometime. Well it happened at the worst possible time because, for some reason, we had two people on holiday during the week when Valerie went into labour. This meant that it was impossible for me not to be at work. Of course, it all fell due on the Friday of the week. 7 am. Valerie tells me that the baby is on its way, I call an ambulance, as you did in those days, and once she had gone, I went off to work. I had a very stressful day, as |I am sure Valerie did, and got to Mayday Hospital, Croydon as soon as I could. I can’t remember properly but I think that she had Samantha by then. I then had some time off but not for another few days as they kept girls in for a week after giving mirth. Can you image that now?
Around that time, the British Open Golf Championship was taking place and our dealing room decided to make a book on the outcome. It wasn’t something that we normally did but it went very well. We did a lot of business. I remember this particularly because the British golfer, Tony Jacklin, won. I don’t remember making any money from it so maybe it wasn’t that good an idea.
Samantha was born in the July and we were still living in the one bedroom flat above Auntie Margaret so things slowly began to get difficult. I was a smoker at the time and, you know how it is, if you are told not to cough, that’s exactly what you have to do. Eventually, some nights |I would be sent out of the bedroom because Samantha would wake. Mind you very shortly after she was born, I was glad to be awake as I got to watch the Apollo 11 moon walk! Neil Armstrong became the first person to step onto the lunar surface July 21 at 02:56, just 10 days after Sam’s birth. Eventually, we realised that we would have to move so I had some discussions with the bank about getting a “bank” mortgage. Bank mortgages were subsidised so were really good to get. After much deliberation and a further request for clarification being sent to New York, the answer came back that |I would have to put up a 10% deposit. This was reasonable at the time but beyond our capabilites to find. My salary was £3,000 p/.a. before tax and 10% of a house was around £600. With around £200 a month coming in, I was quite highly paid but with a baby and rent, finding a deposit like that was going to be a long haul.
As I was a regular Canadian $ trader, as I had been at the District Bank, I was quite friendly with the Canadian $ brokers and regularly had lunch with them. First off was Brian Bennett at Marshalls. He was the one the gave me the impetus to get a better paid job so I was quite close to him. One of the things that came up for discussion was Luncheon Vouchers. These were given out to staff on a monthly basis and we enough to buy lunch each day. At the time they were worth 2/- (two shillings or 10p in today’s money). Somehow, it became known that a) Brian would buy LVs from me at a discount and b) David Britton could buy up LVs from Amex staff at a bigger discount. The good thing about this was that I had to deliver the pile of LVs each month which involved |Brian buying me lunch – and paying with those aforementioned LVs! Great fun.The other Canadian $ broker that I was close to was David Raisen at Woellwarths. I had originally got friendly, if that is the term, with his boss, Ron Strudwick, or Struddie, as he was known. Going to lunch with Struddie involved standing at a bar off Change Alley with a crowd of his friends and drinking beer. As Struddie was in his 50s, there were always a lot of friends there so I always felt like a hanger-on! Anyway, David was more like a normal broker, albeit not as pushy as most. He used to ask we into Woellwarth’s for what was known as an in-lunch – 6 bankers and two brokers starting at 12.30 and ending – well, sometime. Over one of these lunches, I was telling David about my inability to get a mortgage off the bank. He came back to me later in the afternoon, when I was back at my desk, to tell me that Woellwarth could offer me a job as a broker at a considerably enhanced salary and the loan of the deposit! In the ensuing interview, it became clear that my current £2,000 salary would be 50% higher at £3,000 and that a loan of £650 would be set up as soon as I joined. Although I wasn’t keen on becoming a broker, this was an offer that I couldn’t refuse. Discussions with David Raisen at Woellwarth & Co. (FX Brokers) re. problem with getting a mortgage out of the bank. In the middle of this, I was made an offer of a job at Charles Fulton, through a senior broker – Ernie Paget – but just after the Woellwarth offer, a new rule came out stopping employing bankers as the bank bosses were gettting annoyed at the increased salaries being offered around! My timing was just right, for once.
So, again after only a short period, I was to leave Amex at the end of March 1970.