Buy low, get drunk, save money: the market where everyone ends up loaded
Stephen Foley visits the New York bar where drinks prices rise and fall according to supply and demand
Saturday 03 April 2010
The bell rings out over the din, for all the world like the familiar sound of the New York Stock Exchange's opening bell – and the bartender screams out: "The market is CRASHING!!"
On the stock exchange floor, such a declaration might not be met with whoops of delight, but this is Exchange Bar & Grill, New York's most talked-about new watering hole, where the price of the drinks swings up and down according to supply and demand. A market crash means cheap trebles all round. "It's a crash," repeats one of the sozzled bankers at the bar.
The banker's name is Sean. He has second thoughts about giving his surname, in case he should embarrass his employer, JP Morgan. These are self-conscious times for Wall Streeters, or at least slightly more so than before. Nonetheless, Exchange on its opening night has managed to recreate all the testosterone-fuelled braggadocio and excess of a boomtime trading pit.
After a brief conversational detour to boast about the size of his manhood, Sean explains how he and his friend from rival bank Citigroup come to have six drinks lined up in front of them. "We've been buying Coors Light HARD," he shouts. "It's selling at UNPRECEDENTED LEVELS." The pair started the night on Stella Artois, but switched when the price of the Belgian beer got too racy.
At Exchange, the bar prices scroll along a digital ticker above the bar staff's heads. Guinness is a bargain, $5 (£3.28) and on the way down. Ketel One vodka has just ticked 75 cents higher, a group down the other end of the bar clearly having gone crazy. The bar food looks pretty stable at the moment, but you'll not want to take your eye off the market.
"We want the atmosphere to be like the stock market," says Levent Cakar, one of the owners. "Except, unlike the stock market, nobody is going to have any stress or lose any money."
Mr Cakar is 11 years in the bar and restaurant business in New York, having come to the city from Turkey to study for a masters in economics. It is Mr Cakar who is behind the computer program that sets prices, shifting them a quarter at a time within a $4 range, depending on fluctuating demand. At one time, he rather hoped to work on Wall Street. Now he is creating an after-hours home-from-home for bankers.
His business partner, Damon Bae, also 35, has an MBA and a career that included a few years as a stockbroker. When The Independent stopped by earlier in the day, Mr Bae was affixing that stock-exchange bell above the bar. "Of course it's a gimmick but it's fun. Every bar and restaurant has specials, and cuts prices to shift certain items. We are just doing it in real time."
Mr Cakar had the idea for Exchange three years ago, and alighted on the posh midtown neighbourhood of Gramercy for the venture. There are still tweaks to be done – he is in the market for some of the famous old coloured jackets worn by floor traders at the New York Stock Exchange – but the opening night was a media circus like the flotation of dot.com stock. Fox Business News featured the bar, and other crews descended for happy hour.
Wall Streeters being who they are, Mr Cakar expects to find his customers arbitraging, and he has already turned his mind to the issue. Should a drinker want to lock in to the low price of Guinness, buying his entire night's drinks in one go, the bar staff won't insist on pouring them all at once, he says. But he leaves open the question of what happens if banks start trading Guinness derivatives. That's when we should all start to worry.
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