Bringing voices together to promote well functioning markets
Every Friday, we send you an email of top articles related to corporate bond market development. The newsletter is a free service.

This Time IS Different, Credit Shop Argues – Institutional Investor 

Fixed-income hedge funds had $556 billion in assets under management, about six percent of the $9.2 trillion corporate bond market. “Given their relatively small size, it is simply impossible for hedge funds to ‘become the market’ and absorb large liquidity shocks,” according to the report.

(A) Fear and Loathing of Transparency – The Inside Market (Chris White) 

Full Article: The Inside Market

Extracting the benefits of transparency while eliminating its detrimental effects requires techniques that are normally reserved for electronic trading platforms. To get the best out of transparency, we need protocols. Applied properly, the right transparency protocols will increase access to information while protecting the proprietary data that can destabilize a market.

A 48-Hour Reporting Delay Could Be Coming for Corporate Debt – Bloomberg

Full Article: Bloomberg

Finra last week proposed running a pilot program that would give traders 48 hours before having to reveal their so-called block trades to other investors. The effort would allow the industry-funded brokerage regulator, which is overseen by the U.S. Securities and Exchange Commission, to evaluate how delayed transparency might affect corporate bond trading.

Jim Bianco: ‘Why ECB Shows Central Bankers Can Make for Bad Capitalists – The Independent

Full Article: The Independent

Consider Germany’s Bayer AG, which agreed to buy Monsanto in May 2016 for $66bn in what was then the largest all-cash merger ever announced. The deal was controversial from the start as Bayer was going to need to raise billions. Traditionally, this means going on a roadshow and explaining its plan in great detail. Without evidence of a credible plan, capitalists will not part with their money.

Not the ECB. 

Wall St Getting Cut Out of Bond Market It Long Dominated – Bloomberg

Full Article: Bloomberg

For more than a decade, corporate-bond traders resisted efforts to carry out more transactions electronically even as most other corners of financial markets embraced the move to computerized buying and selling. But that’s slowly been changing as new rules have forced dealers to act more like machines, linking up buyers and sellers in almost real time as an exchange would, instead of buying securities from investors and hanging onto them.

JPM and Citi Disband Odd-Lot Trading Desks – Bloomberg

Full Article: Bloomberg

Citigroup and JPMorgan Chase have closed down desks dedicated to handing smaller orders as Wall Street continues to cut costs on trading floors. The two banks have shuttered their odd-lot trading desks in recent months and started executing such trades electronically instead, according to people with knowledge of the

Ways to Survive the Next Liquidity Crisis – Seeking Alpha

Full Article: Seeking Alpha

We’re not the first firm to sound an alarm bell over liquidity in the fixed-income credit markets. Indeed, that bell has been ringing non-stop since the since the collapse of Lehman Brothers. The risk has only grown in recent years as regulations pushed market makers out of the business, in spite of record growth in the size of the corporate bond market.

Robots Conquered Stock Markets. Now They’re Coming for Bonds and Currencies – Bloomberg

Full Article: Bloomberg

The stakes are huge for Wall Street banks competing in the $22 trillion market for U.S. Treasuries and corporate debt and the $5.1 trillion-a-day foreign-exchange market. Handling fixed-income products remains one of industry’s biggest revenue generators. Now firms must disrupt the old model by building out their electronic platforms, or they risk getting sidelined in the future.

  • Wolfman
    WolfmanMarch 8, 2019"It's been a while since I've posted and I'm not sure if anyone noticed! I couldn't help myself today... Here's my take. People act in their own self interest. Why do I start with that? Because I always start with the givens and then work my way through an argument. We've heard for 10 years now that the sell-side has been weakened by regulation and capital restrictions and although many thought this would just be a temporary setback, it has materialized into a fundamen…"

Here’s the Pitch Deck TruMid Used to Raise $53 Million – Business Insider

Full Article: Business Insider

Business Insider got a look at Trumid’s investor presentation, which gives an inside look at what it’s like to start a venue that matches bond buyers and sellers using technology. As you can see from the slides, it’s not easy. Volumes, at least in the beginning, can be hard to find.