YouSaid · the spoken record

David Goone

lines on the record: 81
first: 2024-06-24
most recent: 2024-06-24
sittings or episodes: 1
sources: podcast

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“Secondary trade, they did secondary trade in a private markets, they can do things on the blockchain. And I thought with the regulatory structure, I would be able to go into some digital assets and list them, particularly in some sports arts and entertainment areas, but as well as existing companies that aren't public that we could provide liquidity for. I just found it interesting. I like to solve problems. I was always thrown into solve problems at ice and liked it, same at the CME. When I was there, that was just kind of what I did. That's what happened. And I think to answer your question going forward, I think a lot of what's going to happen is there's just going to be a lot more interesting things that people will be able to invest in, things they're comfortable with or know or may even be their hobbies that they couldn't touch necessarily.”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“You know, my own personal essence. I know about the investment. I'm always more level of comfort. And I think that's going to be a trend going forward. I think that there's also More assets out there than just the traditional stocks that are on equities that are listed on an exchange. So what I saw at T0 is they do private markets”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“Jeff Nu was going to retire. And we had a conversation. I said, I got approached by these guys, and I think it's something I might be able to do. I had some ideas, and Jeff was kind enough, got permission from Isen aboard. Jeff gave us a bunch of money at T0 as a significant minority investor, and I became CEO. And what I saw was I saw this trend that people were interested in owning assets that they were more familiar with. I thought there was a whole bunch of interesting things that you could do with, for example, things in the sports, arts entertainment area that people could do that you could fractionalize assets, people could own things that they may be more interested in or more knowledgeable of, right? You buy stocks that you do typically do well when you know about what you're investing in.”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“I think Robin had started that and everyone followed suit. It became much more almost of a hobby for people. So I think that trend will continue, that individuals are still going to be wanting to trade a lot of products. So one thing I saw when I was thinking about T0, I was going to retire from ICE at the time pretty much everyone, but of the original crew is I would say it was me and Jeff were the Spracker were the only ones left. A lot had retired, but we both really like working and enjoy it. I was going to retire. And then I got approached by T0, which was a pioneer in the digital assets space early on. They got all their regulatory requirements, but for a variety of reasons never really took off. And I thought, hmm, they needed some money.”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“Once again, questions, which is great. So, a trend you started seeing probably pre-COVID was you started seeing Couple things you started seeing digital assets come up, so there was crypto trading starting. There was people talking about digital assets, blockchain, there was a lot more retail trading flying in into the market. I mean, all the meme stocks and therefore you started seeing a lot more people on a retail level having access to a lot more product. World at ice before the derivatives world was still a relatively small part of the general public like the guy on the street wasn't trading oil futures or some maybe were trading some equity futures, but not a lot were trading that. But a lot of people had stock in their portfolio. And you started seeing with commission houses or brokerage houses going to zero commission.”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“Was happening in the last few years. I was there, and they continue to grow, has been getting into the mortgage business, both with data and electronifying or making more efficient the process of soup to nuts or from the beginning to end of mortgage, of getting residential mortgages. So that's kind of the game plan that ICE has done. And look, a lot of credit to Jeff and the way he ran the management team very entrepreneurial spirit. We were always conscious of keeping an entrepreneurial spirit and not too bureaucratic into how we approached ideas. And we could bubble up from anywhere. This person's the only person doing it. It's like if someone had a good idea, it got presented, got debated, discussed, and then we don't.”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“I would say that was maybe the first part of it. Then everyone went online. And then we would acquire other, we could acquire other electronically based systems and just add them to our network. Was a lot more things you could buy, so we were able to add on other, you know, things to our menu once someone logged into our trading system. That was kind of the next phase. We got into equities, which New York's, you know, we got into New York Stock Exchange. Well, let's go through it. We bought, first, we bought exchanges. Then we got clearinghouses. So we used to outsource the clearing to a third party. Then we did develop the clearinghouses and integrated them in. So that was part two. The third part, which was concurrent, was we built a data business and could do the same thing. You start, you know, once you're in the store, there's lots of different data. You could buy in lots of different ways to slice and dice those products out to end consumers. So those were the three. And then I would say, you know, more recently, ice, and this is...”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“Our technology integration we felt was really good and we would keep the best of the other people. They integrate into our culture and just kind of fed on itself. So I think it still is over there, by the way.”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“That we could add on that we could roll up and work. So I got to think we rarely took bets that we felt had a lot of risk other than how long will be a payback, but not that it wouldn't work. I don't know how else to explain it. We weren't buying things that were foreign to us. We were buying things that we knew what to do and how to do it. So they were just easy add-ons. It was, when I say easy, nothing's easy, but it's easy add-ons. And then we got better and better over time of, you know, how quickly to turn over management or not, you know, if you had a good operator or not, those things, you know, the human resource capital, always a challenge. ICE as a company got really good. By the way, it's not just me. I mean, everyone else is doing it. I mean, our CFO and his team was good, you know.”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“Kind of one path. So we felt rolling those up was relatively, look, nothing's easy, but we knew the path to get toward success in almost all cases. And that was one. And sometimes we would do it to get in different geographic locations. Secondly, I'd started or come up with the idea when I was there, though others obviously were heavily involved, of growing out the data business. Once we grew out the data business, so at first you give away your data for free, then people start needing it and you're able to charge for it and there's a whole bunch of things. I don't want to, you know, it's going to take up the whole call of how we expand the data. Once we had an established data business, we kind of knew the same thing. Like, okay, we know how to roll up other data businesses. I mean, we just kind of knew where it was. So we would do that. And then there were some technologies.”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“Actually, because I come from Chicago. We're from in Chicago, we're trading electronically now. A lot of people I knew, I got hooked into ice and they were able to provide a lot of liquidity. We knew that game plan. So when we looked at exchanges that were electronic, we knew that game plan, how to take an open exchange and take it electronic or take a smaller electronic exchange and add it onto our existing customer base. It would just expand and there'd be a multiplier effect. So those were, we had pretty high confidences, you know, other than, you know, you got to make sure the price that you pay for the exchange works is good. But we could wipe out all the costs because it could go on to our trading platform. We could certainly significantly reduce all the staffing. So we had a pretty good business plan for acquiring other exchanges.”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“Surpassed with WTI, which was the NIMEX one. I was heavily involved, but I had a good sense from what we were doing at the CME and how we were, you know, I was involved in trying to get products starting to trade electronically there had a good sense of how to do that, as did others. So we had to get the technology right, but we knew the game plan after that of taking an open outcry, screaming, yelling exchange to an electronic one, and we knew that it would increase volume, not decrease volume, increase participants, not decreased participants, and give you an idea, a platform to actually do even more products. Because in pits, you had to create different people for each pits to provide liquidity. Once you're on a screen, and a lot of my friends...”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“Look, we had a great management team, and Jeff Sprecker was the CEO, was really good at identifying next steps. Like, what if we went in this way? What if we acquired this company? And, you know, he was always like that. And he got a lot of us and the management team to be thinking like that. And then we would debate the issues and sometimes we would take a pass, but a lot of times we thought, okay, this one would work. Let's try it. We think it could go. And the way we would do it is we had a pretty good sense that if we took it on, what we needed to do. When I first came to the company, we bought the international petroleum exchange in London right when I got there. And that was an open outcry or a screaming yelling one in London that was similar to the New York Mercantile Exchange. It traded Brent crude oil, which is now when we were at ice grew to the biggest traded oil future.”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“No, sulfur's done by the government now, so we got out of that. We still do believe it or not, the LBMA, which is the London bullion. We still do the calculation though along the way after we got LIBOR. We got gold and silver. We calculate that. Rice calculates that for the industry, which is another market that. Needed just better controls and stringent policies that were. Policy that's consistent and coherent for marketing to market variety of products in a lifetime a while ago, but that I'm just remembering as you talk to me about it.”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“Nor there, it's a separate, as you said, it's a separate issue because it's secured versus unsecured credit, right? Government-backed versus not government-backed credit. So there is a difference in the rate. There's a credit element in the rate, but we did it well. And then with the government, we helped transition. The government wanted us to transition. So over a several year process, which I left ice before the final transition, but we were whatever, 60, 70 percent through transitioning it into sulfur.”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“Thing. It was also LIBOR was being calculated in many other currencies in Swiss and Yang and Swiss franc. He did a great job getting it all lined up. We had a really good board of top-notch people and we cleaned up LIBOR. Subsequent to that, as a result of all those things that happened prior to 2014, the Fed Federal Reserve felt that it was important to just move away from LIBOR. They just didn't like the unsecured rate. Now we can go back and forth. Which one's better? I have some feelings both ways. After we cleaned it up, I thought it was a really good rate. There are some problems, I think, with sulfur because it's almost at times have some weird actions, you know, jumps in it that you wouldn't necessarily have in a well-done LIBOR, but neither here.”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“No, I think I don't remember exactly, but I think the FSA might have been the person who awarded who it was, who was going to calculate LIBOR, which we won. Then we went in and look, I had that background. I convinced the person who was the head of life to, we were going to replace him when you acquire companies ISIS model was usually to put their own people in, that we just found it quicker and easier. It adapted, you know, our culture was able to move quicker over and all those things. So we were going to put our own person in to run life. I convinced the president of life at the time to move over to run LIBOR, which was a big job because you had to get all the banks on. And we weren't just doing, you know, LIBOR wasn't just a dollar based.”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“Person who was calculating or the entity who was calculating it for whatever reason wasn't wasn't maybe it wasn't strict enough or just didn't catch it for whatever happened so basically the FSA came in the financial services authority came in and said look you got to we got to have someone calculate this that's going to be beyond reproach and fix fix it which is what we came in and did”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“Oh, I'm sorry. This was around, let's see, we closed in 2000. I think we closed in 2014, the end of 2014. So it was at the end of somewhere, let's say in mid-2014, I believe. I think that's when we bought the New York Stock Exchange. I think what was going on was prior to that, there was a lot of, you know, they call it a scandal, I would call it a scandal, there was a lot of in the press, there was a bunch of players that were being convicted of crimes and accused. Some weren't yet convicted, but there was a scandal that a lot of the major participants or banks that were traders of banks, I shouldn't say the banks, traders of banks, were actually manipulating the price of LIBOR.”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“Kingdom. We really wanted that asset. It was one of the actually the major goals of You know, the New York Stock Exchange Euro next. So as we were getting very close to closing on the deal, the head of life at the time called us up and said, our attorneys are saying we have to disclose this to you. We were bidding for calculating LIBOR and they showed us the contract and what we were taking on if they got it, which they ultimately did. They were in what they call an RFP, a request for proposal process with a whole bunch of other people to take over from the British Bankers Association the calculation and I think Reuters at the time for the calculation of”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“Take you back in time. So we were acquiring the New York Stock Exchange, but it wasn't the New York Stock Exchange, it was NYSC, EuroNext. And the Euronext part had an asset we really wanted, which was called the Life, London International Financial Futures Exchange. So that traded, their big product was they traded a thing called Euribor or Euribor, depending on how you want to promote it. So they traded the benchmark short-term interest rate in Europe. They also traded Euro sterling and all the other products. They had a soft business that traded some coffee and some other things and a few equity products. But it was a very, it was that along with the Deutsche Bors were the two dominant derivatives exchanges, United Kingdom and Europe. So in the continent plus the United Kingdom.”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“I had no idea that I managed LIBOR. Tell us about that. When did you guys get involved with LIBOR? When did you start to realize there were some issues? And tell us about that transition from LIBOR to Sofer. And I really can't stress enough for our audience just how monumental that change is. Like the benchmark interest rate for the entire world used to be an unsecured rate that was reported between some British banks. And now it is a rate based on a repurchase agreement of collateralized. So it has much, much less credit risk, really negligible credit risk. And I mean, that is a huge, huge deal.”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“Make me process much less seamless of a mortgage instead of having it take you month to get, you know, figure out the whole mortgage process. The goal is to get it much shorter. But we did a lot of interesting things along the way. For example, when we bought the New York Stock Exchange, one of the things we picked up was LIBOR. We calculated LIBOR, which was ultimately I was chair of that area of the company. We hired a great guy to run it. And help transition it to now what is called sulfur overnight that is currently used for the US. So lots of fun things, but that's kind of my background in the financial services area prior to T0.”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“Enron went under, which was devastating to really the gas sea, the merchant energy business, the gas and power business. We lost probably 80%, maybe 80% of our top 10 customers, but the market evolved. We had clearing and we became a dominant force. And that's how ice grew. And then we just continued to grow by acquisitions. We started a data business which became a huge business. We acquired more exchanges. We got into the equities market. We bought the New York Stock Exchange. We bought exchanges overseas. And then ultimately towards the end of the year, we're getting into the mortgage business where we were trying to electronify, for lack of a better.”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“Enron couldn't set the odds of these markets, right? And they took the other side of many of these trades. And that's what happened. And we knew that there wasn't a good business model. We provided central clearing, which means, you know, the counterparty to every trade is a clearinghouse, which is mutualized among all the brokers of the exchange, all the member of the clearinghouse. And it becomes a much better system and in a clearinghouse, especially in the derivatives world, you mark to market every day. So a trade can't get away from you. You have to pay up every day for the difference between yesterday and today. Or if you're the beneficiary of good trade, you receive the income. So I lose a dollar. I have to pay a dollar. If I get it, and the other side gets the dollar. That was our business model.”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“We believe that by opening up the markets to more participants, democratizing it in some way. So you just had to click on your computer and do your trading versus, which eliminated a lot of the intermediaries of an open outcry, calling your order to your broker, your broker calling it to the floor, the floor signaling a guy in the pit, all those things, you know, there's lots of middlemen and inefficiencies that became much more efficient by just having it on your computer. And so that's how we started. We had Enron, as everyone knows, went under and they had a flaw in their model, which we all knew was you can't be the other side of every trade if you don't get to set the odds. This is in Vegas. If you get to set the odds, you can win in the long run.”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“Over the counter markets and add clearing to them. So I came in and I jumped in. At first, the beginning of 2001 and we went public four years later on the New York Stock Exchange, which we ultimately bought eight years later. I think while I was there, we did about 46 major acquisitions. And we grew it from a startup to around a $70 billion company when I switched over to T0 and it's still the company now is 75 to 80 billion dollar market cap public company. And along the way, we just did some simple things. We took some open outcry or screaming and yelling like you see the movie Trading Places to an all-electronic venue.”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“Dynergy, yeah, I mean, just a reliant AEP, a host of others. That was one group. And then there was another group that was trying to compete with an open outcry exchange in New York, Nymex, would traded oil and metals. And that was all the largest oil companies of investment banks. It was BP, Shell, Total, you know, Goldman Sachs, Morgan Stanley, Deutsche Bank, SOCJEN. I think those were, I don't think I missed any. And that group was trying to have an online electronic trading competitor to the New York Mercantile Exchange. So what happened was, and especially on that side of the market, oh, on both sides, they needed somebody with more derivatives and clearing background because the vision was to go after the”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“Really was not involved in the broader markets like the Chicago Mercantile Exchange was. Met with the CEO, a very dynamic guy named Jeff Sprecker, who's still currently the CEO. We got along well, and over a series of months, he convinced me to jump ship, as they say, and go into what was basically a startup based in Atlanta. So that's how I started there. we were going after the natural gas and electricity markets as well as the originally the oil and metals markets. It was a very interesting time Enron Online was the dominant online energy trading pioneer shall they say so you basically try to trade it on the internet with Enron that was one group that was backing Intercontinental Exchange was people trying to compete all the competitors of Enron trying to compete with Enron.”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“I was an executive at the Chicago Mercantile Exchange based out of Chicago. I was on the executive management team and I was running the products basically. So a lot of the product design and bringing the products to marketing everything around the products there, all the products at the Chicago Mercantile Exchange. And I got approached at the end of the year 2000 about joining a company that was doing interesting things or was about to do some interesting things in the energy space with an online exchange and they were based out of Atlanta, but they hadn't really had, they were just getting started, but it hadn't had anyone with real market experience. They had a technology background, they had some background. The CEO had some background in the electricity markets.”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT
“It's my pleasure. I want to first start off by asking you about your previous job. You had a long 10 year at the Intercontinental Exchange ICE You were the chief strategy officer. A powerhouse in the financial services business. They owned the New York Stock Exchange, among many other businesses. I understand you started there quite early into the life cycle of that company. Tell us about that. How did you first? Get there, and what was your experience like?”
2024-06-24 · Forward Guidance · The Next Big Thing In Capital Markets | David Goone · IDENTIFIED FROM THE TRANSCRIPT