Merc CEO Terry Duffy serves it up Chicago style
Josh King has headed Corporate Affairs at the New York Stock Exchange/ICE since 2018. One of the things he did to shine a light on the sometimes opaque practices of the world’s biggest stock market was to launch a podcast. Just like everyone else. But Josh, an affable and skilled PR pro with a long history in Democratic politics, clearly cares more about the podcast than most people care about their children. Each week I receive a detailed, thoughtful, sometimes even loving description of “Inside the ICE House,” tempting me to check out the CEOs and other bigshots King interviews in the hope that they’ll reflect well on his employer. And it mostly works.
This week’s episode was my favorite in a long while, and not just because it began with a remembrance of the greatest NFL team of all time (obviously, the 1985 Bears) but because Josh’s guest—Terrence A. Duffy, longtime chairman of CME Group—is as obsessed with market history and the good old days (the 1980s) as Josh is. And you can’t really argue the numbers. On the day the Merc went public in 2002, its average daily value was less than 1 million contracts. Today, it’s 23.3 million contracts, including a 19% jump from 2021.
Duffy, the grandson of a Chicago politician, and a close friend of former President George W. Bush and other Republican heavyweights, reveals that he personally took Chicago Mayor Lori Lightfoot to task. At the time the episode was taped, the embattled first-term mayor was campaigning for her political life, where she needed to finish in the top two on Feb. 28 to make the runoff election. (She came in third.) Duffy reveals he told her in person, “I employ thousands of people here in Chicago. And I said, ‘Now that [the pandemic] excuse is gone. They’re worried about their safety.’”
In Duffy’s telling, Lightfoot began to cite small recent decreases in the homicide rate. He cut her off and said people don’t believe it. Then he told King, “The problem here, this happened to my wife just yesterday. Three o’clock in the afternoon, my wife got carjacked right in the city of Chicago and it’s absolutely insane what’s going on here and 90% of the carjackings in Chicago are done by juveniles. So the juveniles go in and they come right back out literally an hour later. So is that investing in our future?”
That’s a pretty newsy little tidbit, the wife of the CEO of the Chicago Merc being carjacked, and it hadn’t been previously reported.
If confronting the mayor of a city where he employs thousands seems kind of bold for Duffy, it’s also believable because of another confrontation that occurred last Spring. It was electifying then — as much as Congressional testimony can be—but in hindsight it’s now looking about as bad ass as anything we’ve seen on a public stage.
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On May 12, 2022, Duffy was invited to appear before the House of Representatives Committee on Agriculture at a hearing titled “Changing Market Roles: The FTX Proposal and Trends in New Clearinghouse Models.” One of the other invited witnesses was the Chief Executive Officer and Founder of FTX, Sam Bankman-Fried.
At 55:50, SBF tells Congresswoman Alma Adams how sacredly FTX takes its obligation to protect customer assets. “All of the customer protections typically found in DCOs and DCMs” are in place at FTX, he assures the world and then extols the “deep analyses” that FTX has done to protect customers. Duffy seems almost alone in disbelieving the wild-haired visionary, with his nasal voice and off-the-charts arrogance. As King puts it in his intro, Terry Duffy did his “best to sound the alarm. The House Ag hearing should be required viewing as a masterclass on how clearing really works.”
It’s incredibly embarrassing to watch the Committee defer to the boy genius. If you can bear three hours of congressional testimony, you really should, because seeing our nation’s legislators kiss the ass of this obviously demented fraud is great television. And for refusing to go along, Duffy gets accused and lectured.
At the 2:00:26 mark, Congressman Ro Khanna (D-Calif) basically screams at Duffy.
“You’re giving false statements to Congress.” “You can’t give false statements to the United States Congress.” “I would suggest that in the future you do some homework.”
Duffy keeps his cool while looking like he wishes Zoom had a “strangle” feature. He tells the Congressman, “I assure you, Sir, in the amount of years I’ve been in this business I’ve forgotten more than most people ever know. I don’t give false testimony.” It’s stunning that Duffy, who runs an NYSE company worth $60 billion and employs thousands of high-wage earners in a beleaguered American city, is attacked while the boy wonder looting customer accounts from the Bahamas is treated as a visionary.
The ICE podcast captures the tension here and much more as two guys who clearly value the rich history of public exchanges talk shop. Even as competitors—Duffy kids King about CME’s slightly higher market cap compared to ICE—the guest and host clearly like and respect each other and the shared heritage of their industry. Duffy discusses his rocky start in the business with candor, including a mis-hear that cost him $150,000 when that was real money.
They go back even further to the founding of the Merc, which began in 1898 as the Chicago Butter and Egg Exchange. The podcast rolls some 1987 tape from a great show called “The Trading Game.” (This youtube version features an ad with Al from Happy Days and William “Refrigerator” Perry, who gets some loving remembrance as the guys discuss Da Bears; Duffy correctly laments that Sweetness, after years of faithful and excellent service, somehow was denied an opportunity to score in the Bears Super Bowl romp.) Like the guys, I revere the open outcry era of capitalism so I’ll use this opportunity to plug a short documentary that deserves a view—Pit Trading 101.
This is a must-hear episode of a reliably solid podcast. It’s not without its faults. I don’t know that the clips of Ditka on the Howard Stern Show added much and a 70+ minute program shouldn’t have anything beyond what’s absolutely necessary. Another suggestion: King gives Duffy a photo early in the show “as a belated anniversary gift.” The show should display that image—and any images referenced—on the web page for the show. (I do love that Duffy wears a full suit to appear on the podcast.)
Ultimately, this is not business journalism. King’s goal is to promote the CEOs and their NYSE-traded companies, not hold them to account. Nevertheless, these lengthy, deep conversations with the people manipulating the levers of power open a valuable window onto how the world really works.