Tags: BlackRock, bond markets
BlackRock’s paper-issuing arm issued a pretty interesting paper this week on bond standardization.1 Basically: there are a lotta bonds, and none of them trade and it’s impossible to get the size you want of the bond you want, and this could be solved by each issuer only having, like, three bonds, and re-opening them when they need to borrow more money, instead of creating new bonds all the time. Each issuer has only one stock, mostly, so why can’t they cut back on the bonds a bit?
Also all the bonds should mature at the same times, preferably like IMM dates, to make hedging easier. And to make everyone refinance at the same time. What fun those times would be. September 20, 2008, for instance, five days after Lehman filed for bankruptcy, would have been a rough time to have to refinance bonds.
The argument is pretty straightforward. Bonds don’t trade very much: Read more »
Tags: BlackRock, bond trading, ingratitude, MarketAxess
All BlackRock wanted to do was make things easier for you. It had no prurient pecuniary motive in launching its own corporate bond-trading platform. It just wanted to help. That’s how it’s become the world’s largest money manager, after all. Read more »
Tags: BlackRock, job offers, just 35 minutes on MetroNorth!, Larry Fink, Tim Geithner
According to CG, there’s a desk at BlackRock waiting for the former Treasury Secretary when he’s ready. Read more »
Tags: BlackRock, Charlie Gasparino, executive suite players, friends of Charlie Gasparino, Larry Fink, surveys, Treasury Secretaries
“My survey of Wall Street executives [shows] Jack Lew in the running for this job…They think that he’s the most likely guy to be Treasury Secretary at least that’s according to the people I talked to: major Wall Street CEO’s and executive suite players that I deal with…The other guy that’s out there is Larry Fink CEO of BlackRock. I will say this, Larry Fink is a guy I know very well. I consider him a friend. The upside to Larry is clearly that there is no smarter guy on Wall Street that I know right now. He really understands the business…I think Larry wants the job. The negative is that he is really associated with the Wall Street crowd. That is something that I don’t think the Obama administration would go for.” –Charles Gasparino, close personal friend of Larry Fink [FBN]
Tags: BlackRock, Larry Fink, long jump, Olympics 2012
BlackRock sees your piddling food eating contests and raises you a real challenge. Read more »
Tags: BlackRock, Larry Fink, lawyer up!, Liborgate
Or it might not. No one can say at this time. Charlie Gasparino reports: Read more »
Tags: Aladdin Trading Network, BlackRock, Volcker Rule
What are you planning to buy from BlackRock? They have bonds for you:
BlackRock Inc. is planning to launch a trading platform this year that would let the world’s largest money manager and its peers bypass Wall Street and trade bonds directly with one another. … The trading platform would be run by the New York-based company’s BlackRock Solutions arm and offer 46 clients—including sovereign-wealth funds, insurance companies and other money managers—the ability to trade in corporate bonds, mortgage securities and other assets, company executives say.
Under the plan, the platform would seek to match buyers and sellers of the same securities, in a process known as “crossing trades.” BlackRock Solutions would charge a small fee for the service that would be much lower than Wall Street’s trading commissions.
Some of the transactions would effectively cut out the Wall Street dealers that have long acted as middlemen in the credit markets. BlackRock’s asset business, which oversees $3.5 trillion, would also use the platform.
So why wouldn’t you use this thing, whose working title is “Aladdin Trading Network”?* It’s pretty tautological that if you can cross a bond with another investor at a price that, with BlackRock’s small fee, is inside the market that you can get from dealers, you should do that. And presumably BlackRock’s $3.5 trillion AUM, plus whatever its clients post on this platform, provides a good opportunity for crossing. And from the Journal article there seems to be plenty of low-hanging fruit, e.g. BlackRock’s own funds only cross about 3% of their trades and are aiming to move that to 6-8%, so presumably that is possible in the basic sense that 6-8% of its trades are matchable with each other, so in a perfect-information world it’s kind of weird they’re not matching those already.
Of course the answer to why you wouldn’t use this is that there are so many bonds each of which is special in its own way, and you have your little heart set on a particular bond that is green with pink polka-dots and will accept no substitutes, and BlackRock either doesn’t have the one you covet or doesn’t want to part with it and neither do the 46 other folks on the system and so you have no choice but to source it from a dealer who will charge you a big nasty spread. Actually BlackRock will facilitate that for you too, which is perhaps a clue about how robust the matching will be: Read more »