Blues musicians have written scads of songs about their personal financial problems, but none has been particularly eager to explore the dark side of institutional finance. Mac Konishi, senior manager at GNI Limited, wants to change all that with “Hedge Fund Blues,” a quirky ode inspired by the Long-Term Capital Management affair.

A couple of decades ago, Konishi was playing guitar in “The Rascal Strangers,” a Japanese country-and-western band that entertained American GIs returning from Vietnam. Later, after an aborted academic career in linguistics, he started working in London, hooking up Japanese investors with London- and Tokyo-based investment managers.

But watching Japanese financial institutions implode all around him sent him into a malaise. He wanted to put something cynical and truthful into words and music, something that couldn’t be heard in Karaoke bars. “Japanese are always buying at the peak and selling at the bottom,” he says. “I wanted to show people that there’s a Japanese guy who knows something about the English financial world.”

Konishi says he also wanted to debunk the popular misconception of Japanese as inexpressive, cookie-cutter copycats.

He hooked up with a local jazz musician and began tinkering with the lyrics to “Mac The Knife.” The chorus of the song became something quite different:

Hedge Fund Blues
The banks start to squeeze—squeeze
Hedge fund blues
You dare not sneeze—sneeze
Ain’t no more fun
When all we want to do is run

OK, so it’s not “Hound Dog.” But Konishi has already contacted some people at Bloomberg and tried to get them to start a new label—Bloomberg Financial Music—and publish his song. “If Bloomberg comes back with a positive answer, I’ll have another career,” says Konishi, who adds quickly that he has no desire to give up his day job.

Until then, Konishi is working on “Japanese Taxpayer Blues,” “The Days of Open Outcry” and “Numbered Accounts” (a song about Swiss bankers selling accounts to high-net-worth investors), and has plans to make a full studio version of his demo tape later this year. (If you’d like to purchase a copy, contact him at mac.konishi@gni.co.uk.)

By Robert Hunter

Bill O’Brien is not easily deterred. In January 1997, when the flamboyant co-owner and managing partner of Amarillo-based Texas Beef applied to the Commodity Futures Trading Commission for the right to trade cattle futures over the Internet, the Chicago futures establishment barely batted an eye publicly and snickered privately. Who was this glorified cowpoke, anyway?

Now, nearly three years later, Futurecom’s application is still mired in CFTC red tape, but O’Brien soldiers on. In August, the CFTC asked Auditforce Inc., a Milwaukee-based auditor, to test Futurecom’s Internet architecture to make sure it’s suitable for full-throttle exchange activity—yet another step in the CFTC’s Byzantine application process. “We’re expecting approval right away,” he says, “but they could always throw another curve ball.”

During the last three years, a river of documentation has flowed between Amarillo and Washington. Most of the CFTC’s concerns have centered on micro technical issues, but O’Brien sees a larger pattern: The regulator has sometimes unfairly compared Futurecom with traditional open outcry exchanges. “Futurecom is not something you can model after what’s taken place before,” he says. “We’ve tried to distill trading down to its simplest elements, and then reconstruct the whole trading process.” Among futurecom’s innovations: integrated trading and clearing, with a totally electronic audit trail.

The Texan’s grand plan for Internet domination sprang forth from two basic goals: to make cattle trading cheaper and to offer cash settlement. Futurecom will charge fees on a per-transaction basis only, rather than forcing traders to lease or buy exchange seats. And it will remove the Sword of Damocles-like specter of physical settlement from cattle futures trades. By using Futurecom, ranchers will no longer have to worry that an unusual market event could force them to schlep thousands of cows to Chicago to settle a contract.

But O’Brien’s plans don’t end at creating the world’s first Internet-based cattle futures exchange—his ultimate goal is nothing short of toppling the entire Chicago futures establishment. Once the CFTC clears Futurecom, O’Brien plans to offer “families” of products in energy, metals and financials that will compete directly with rival exchanges.

The wheels are already in motion. Last June, Futurecom announced that it had created a stock index called FutureTech, and had applied to the CFTC to list futures on the index. FutureTech consists of 31 technology stocks traded on the Nasdaq and at the New York Stock Exchange, with a cumulative market capitalization of more than $1 trillion. For now, the index can be tracked daily at www.futurecom.net. It may not have the cache of the Standard & Poor’s 500 in the institutional crowd, but FutureTech could appeal to the growing cadre of on-line retail investors who deal heavily in technology stocks.

A beef with Oprah

Futures exchanges, of course, are not the only Chicago institutions O’Brien has gone after. Earlier this year, O’Brien gained national attention when Texas Beef sued talk show queen Oprah Winfrey for saying during a show that she planned to stop eating hamburger because of a perceived mad cow disease epidemic. After a six-week trial that saw both O’Brien and Winfrey take the witness stand, the jury decided in favor of the television star. (Another company, Cactus Feeders, also sued Winfrey, and is appealing the decision. Texas Beef has dropped its litigation.)

“That was the most public defeat I’ve ever taken in my life,” O’Brien says. “We could not overcome the personality of Oprah. There was, in my opinion, no amount of evidence that we could have ever introduced to that jury that could have convicted her of anything. We came across as a bunch of commercial cattle guys who wanted to argue over money, and Oprah was standing up for truth and justice and purity and compassion. She killed us.”

What was O’Brien’s final take on the Oprah juggernaut? “I am very aware of the magnetism of her personality,” he says.

The exchange world was dealt a loss in August when Brian Monieson, former chairman of the Chicago Mercantile Exchange, died from complications brought on by cancer.

Monieson served as chairman of the Merc from 1983–85, and served 12 years on the exchange’s board of governors.

The Northwestern University and University of Chicago graduate made an early fortune trading in the Merc’s pork bellies pit in the 1970s, using what he called the “BLT strategy.” He noticed that hog prices went up during the summer, and attributed this to consumers’ stronger summer appetite for bacon-lettuce-tomato sandwiches.

Despite Monieson’s role as a Merc executive, his career was not without controversy. In 1992, he was assessed a personal penalty of $500,000 by the Commodity Futures Trading Commission for failing to oversee two employees of his commodities trading firm, GNP, who had allegedly bilked customers. GNP was also fined $500,000, and, as a result of the incident, Monieson was banned from trading at the Merc for two years. His fine was later reduced to $200,000.

In his spare time, Monieson was an avid bridge player, winning the 1986 national title with partner and current Merc chairman emeritus Leo Melamed. Monieson was also a horse owner. In 1992, Artspace, a horse he co-owned, was named North American Harness Horse of the Year.

Monieson was also a major contributor to the Friends of Israel Defense Fund. He was 62.

• Edward Maher has been appointed managing director for Europe at Askari, a business unit of State Street Corp. He had been vice president and general manager in New York of Toronto-based Algorithmics.
• Donaldson Lufkin & Jenrette has announced the appointment of Jeremy Quinlan, former director in the principal finance group at Nikko Europe, as senior vice president in the firm’s asset securitization group.
• George Miragaya, who headed the foreign exchange group at Salomon Smith Barney, has been named head of foreign exchange in New York at ING Barings.
• The Bond Market Association has announced two promotions. Scott Rankin, formerly principal staff adviser to the organization’s funding division, has been named vice president and assistant general counsel. Andy Waskow, formerly director of policy analysis, has been named assistant general counsel.
• Diane Pejkovich has been promoted from first vice president for compliance at Sakura Dellsher Inc. to senior vice president of compliance.
• Westdeutsche Landesbank Panmure has announced the appointment of Jay Nawrocki as head of high-yield capital markets. He had been head of European high-yield origination at Warburg Dillon Read.
• Neil MacKinnon, formerly a partner at Burke & MacKinnon, has been named senior currency strategist in Merrill Lynch’s London office.
• FNX has appointed David Boldon global head of sales. He had been head of sales for the Americas at SunGard Data Systems.
• Commerzbank Global Equities has announced a number of appointments for its new alternative investment strategies unit. Kevin Ferro, former vice president at D.E. Shaw & Co., will be global head of the new unit; Franco Baseggio, who had been responsible for portfolio management at D.E. Shaw & Co., will be the hedge fund portfolio manager; Markus Hampel, a former investment adviser and portfolio manager at Commerzbank, has been named senior relationship manager.
• Barbara Stymiest has been appointed president and CEO of the Toronto Stock Exchange. She had been executive vice president and CFO at Nesbitt Burns.
• Mayur Ghelani has been named head of fixed-income distribution for Asia at Warburg Dillon Read. He previously worked on Salomon Smith Barney’s foreign exchange desk in Singapore.

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