Goodbye Bloomberg

March 14, 2009

I’ve written several times before about Bloomberg, and why they’re such a blot on the etrading landscape. Now we’re in a recession and Bloomberg’s clients all want to cut back on those grand a month terminals. More and more I hear folk say “why pay a grand a month for an email account ?”

Bloomberg’s difficulties should be opportunities for those involved in proprietary single dealer channels. The advantages of single dealer channels for dealers are obvious. And they can be attractive to clients too – they’re free to clients, and can carry innovative offerings that the multi dealer ECNs aren’t nimble enough for. But what they lack, by their very nature, is the direct real time price competition of the multi dealer RFQ.

Could there be some form of mitigation for this handicap ?  Two avenues seem possible. Firstly the moribund LiquidityHub consortium. The tech infrastructure is in place for composite prices for a whole range of rate products. The consortium could agree to allow members to republish LQH composite price on their single dealer channels. Secondly, vendor driven aggregation. Single dealer channels are now common enough that vendors have sprung up to service the sector: Caplin & Lightstreamer for instance. The vendors themselves could perform the price aggregation in portals. Dealers could reuse vendor supplied aggregate or composite prices to make single dealer channel tickets MiFID compliant for the buy side by enriching them with the portal prices.

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2 Responses to “Goodbye Bloomberg”

  1. tom brakke Says:

    You’re right, there’s no reason to spend that kind of money for email, at least now that the era of free money is over.

    It’s amazing to me how so much horsepower could have been so misused by so many. There are tremendous capabilities lying fallow; firms haven’t realized how to integrate the capabilities of the tool into their approach. (And Bloomberg hasn’t had to effectively sell those capabilities; can you say “fat and happy”?)

    They are certainly not for everyone, but the cost/benefit can be altered dramatically by someone who knows what they are doing with the thing.

  2. John Greenan Says:

    Ah – a good point there…BUT…

    Who owns liquidity hub now?

    Give you you hint; owner is mayor of New York….

    All I’d say is that there are so many institutional blockages to quality executable quote and price dissemination that any technology solution is only a teeny tiny part of the puzzle.

    I’d suggest that FIX is the way to do this anyway – but I may be a bit biased!

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