Analysis: For brokers like Peregrine, from bad times to worse

CHICAGO/NEW YORK: Long before Peregrine Financial Group's dramatic collapse last week, months before MF Global's meltdown triggered an industry-wide crisis of confidence, the world of the independently owned futures broker was not a happy one.

Even as trading volumes handled by these relatively small futures commission merchants (FCM) boomed over the past decade, profits were dwindling: electronic trading, the rise of the hedge fund and rapid-fire algorithmic trader, and the slump in interest rates had upended their century-old business model.