FRB & CME Interactive Visit

A Day at the FED & the Chicago Mercantile Exchange
By Edon Shaqiri, FREE President

College students often catch themselves in the mental contrivance of viewing enormously successful individuals through a special lens and we repeatedly yet mistakenly conclude that they are where they are because of a special gift and/or talent. While a very high intelligence quotient or an innate ability may contribute to one’s overall success in life, we must also realize that both posses a point of diminishing return. For most of us, it all starts with self-communication and taking action!

Last semester, a few dedicated FREE officers met-up and began to preplan for an event for the upcoming Spring semester. After a deliberate session of brainstorming, we were set on a pre-professional, interactive trip to the Chicago Federal Reserve and the Chicago Mercantile Exchange (CME) which would be geared toward all USF students, undergraduates and graduates. We would then plan for the ultimate FREE experiential learning opportunity which would resonate very well with our mission statement. With the help of Dr. Frank Wyrostek, FREE’s dedicated advisor, we were able to get a hold of William Testa, VP and Director of Regional Research at the FED, Michael Busch, President of Burling Bank and Dora Asmussen, VP and Chief Operating Officer; Mr. Busch and Ms. Asmussen are both options traders in the grains market.

FREE Member, Guy Dragonetti

As this semester progressed and as more students became aware of the opportunity, our sign-up list filled up rather quickly. After all the careful planning and the hard-work from every FREE officer, we were all set for action on Friday the 28^th. That morning, twenty-four of us joined one another at the old Joliet Union Station at 7:00 am and hopped in the train as soon as it arrived. After weeks of researching and archiving questions for our hosts, some of us were feeling anxious about the opportunity to interact with Mr. Testa, others with the executives at Burling Bank while some were thrilled that we actually boarded one of Metra’s express trains and not the regular. The train ride from Joliet to the LaSalle Union Station in Chicago takes about an hour and twenty minutes and we were advised by the train conductor to pair up and sit together because it would eventually get full. Train rides are fun when you have someone to converse with back and forth or they can be daunting and forever lasting if you are sitting next to a stranger who has fallen asleep and is guaranteed to eventually drool on the collar of your nicely, ironed shirt – which for someone like me takes a good twenty-five minutes of ironing and a half bottle of spray starch.

As the train makes its way into Chicago, I cannot help but look out the window and realize the “for sale” signage which mirrors the depressed housing market that surrounds all passengers from left to right. Given its close proximity to the financial district you’d think you were in a different country let alone a different state. Illinois, just as any other state in the U.S. has been hit hard by the falling real estate prices and the lethargic sales which have traumatized homeowners. For me the economic recovery begins here, where it (the crisis) all started – the real estate market. How and when do we get there? Perhaps Bill Testa, the chief economist, our host for that morning would have the answers… 

Mr. Bill Testa, Chief Economist

The Federal Reserve Bank is within a walking distance from the train station and given the Chicago-like weather we were experiencing that morning this was quite the luxury. We made our way past security and we were immediately greeted by our friendly tour guide in the Money Museum. Next thing I know, I was standing next to the Million Dollar Cube, next to approximately 2000 lbs. of cold hard-cash. The inflation exhibit was also very impressive – you not only got the opportunity to see the effects of inflation but also step in the Fed’s shoes and see firsthand their efforts to maintain price stability. We were then seated in a screening room to watch a quick fifteen minute introductory video following a brief Q&A session with our tour guide. As the questions got more in depth, it was as if we had earned the rite of passage to meet with Mr. Bill Testa. As mentioned earlier, Bill Testa is a vice president and director of regional research in the economic research department at the Federal Reserve Bank. He has written extensively in the areas of economic growth and development, the Midwest economy and state–local public finance and has directed a comprehensive long-term study and forecast of the Midwest economy. There was a genuine curiosity amongst all of us to know more about the current policies of the Fed, the results of the Senate Budget Committee earlier that month, manufacturing, exporting and farming in the 7^th district. Our group interaction with Mr. Testa was genuine, natural and unforced. It was the ultimate FREE experience that goes beyond the classroom setting. Our time with Mr. Testa commenced as an HR Manager at the Fed then went over career/internship opportunities with the attendees and collected resumes from everyone who was interested.

Mr. Michael Busch, CME Trader

Our next session would lead us right across the street and into the famous Chicago Mercantile Exchange (CME) with Mr. Busch and Ms. Asmussen, both executives at Burling Bank (which is one of the four banks located inside the exchange) as well as options traders in the grains market. We began the tour in this lavish membership conference room in which Mr. Busch shared with us his daily routine of trading and serving his bank clients. To many of us, the world of options was something new and at times even intimidating. However, we were there with the right traders. The U.S. is the world’s largest grain exporter and our role as a nation expanded even more last year given the export embargo that came into force from Russia. Forecasts for harvest in 2011 were dismal to say the least – they fell as low as 60 million tons, 40% less than in 2010. You would never be able to guess the sentiment when speaking to Mr. Busch. However, he did mention the changing nature of the industry itself and how the algorithm revolution has expanded even into trading. After a quick introductory video by the CME, Mr. Busch and all of us were anxious to go out and see the pits. One hour before the market closed we were able to catch the usual chaos and havoc that erupts in the pits. We saw it all from above and we had Mr. Busch by our side as we exhausted all the questions we had for him.

Chicago Board of Trade

Our next stop would conclude our long but exciting day for some Chicago style, deep dish pizza from Giordano’s. Thankful for the experience we were all more appreciative of a world we might soon encounter as some of us get ready to graduate. On behalf of FREE I want to thank Dr. Frank for helping us plan this interactive visit and everyone else who contributed and made this happen for us!

Financial Research and Education through Experience (FREE) seeks to serve all USF students and the community to develop opportunities for experiential learning that take us beyond the classroom setting. Our mission is to broaden the learning curriculum through extraordinary experiences by engaging each other and interacting more with  faculty, USF alumnus, professionals in the business field and the community.