My second day here in Shanghai was even better than the first in many ways. Still Raining as the Jimi Hendrix song says and the people here are Still Dreaming of ways to make money.

I continue to be blown away by the enormousness of this city and by the people themselves. Shanghai is full of extremely smart and hungry entrepreneurs. The people I met during meetings yesterday had a lot of the same questions we do in the states about the futures industry. When will all the new regulations stop coming and what will be the final impact?  How do we launch successful new products? What will Chinese regulators do about HFTs? 

But there is something Big brewing over here and I am starting to think its about Big Data, but for today I want to talk about the Big Fish.

Catching a cab in Shanghai can be a little tricky with 23 million people looking for transport in the rain. Cabs have all kinds of electronic gizmos, lights flashing, drivers  talking on smart phones, radios blaring. But try and catch one in the rain at night and your driver will tell you how much he wants you to pay for the ride back to your hotel. In futures talk, he makes you an offer, and he waits for your bid. If your bid is too low, he says he is waiting for “the Big Fish” and sends you away.  You will see lots of cabs parked with their on duty lights on, just sitting there waiting while customers stand in the street waiving down other cabs who may or may not be looking for the Big Fish. Smart folks like our guide have an app similar to Uber and they order a cab on the phone but they still have to haggle and pay more than the normal rate, but still less than the cabs waiting right in front of you. Can the CME create an app to capture these trades? Or maybe they should buy Uber. A literal spot Taxi cab market where people needing cabs can bid together for the cabs that are available? Maybe this is where new product development should be going in the exchange space? It’s no different than trading corn. Exchanges process transactions for a fee, why not Taxi Futures? 

Either way, I found this whole idea of the Shanghai cabbies waiting for the Big Fish very indicative of what is going on in our futures world today. There are thousands of very smart people here in Shanghai and all over the world with their lines in the water. Who will catch the really Big Fish?

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