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Bloomberg Markets Magazine

Bloomberg Markets Magazine May 2016

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Country:
United States
Language:
English
Publisher:
Bloomberg Finance LP
Frequency:
Back issues only
$9.99

in this issue

1 min
contributors

Beijing-based Tom Orlik (“How to Get the Definitive Read on China’s Growth,” page 44) is Bloomberg’s Asia chief economist. The author of Understanding China’s Economic Indicators, Orlik was previously the chief China economics correspondent for the Wall Street Journal and an adviser to the U.K. Executive Director of the International Monetary Fund. His analysis is published on the Bloomberg Intelligence Economics dashboard {BI ECON }. Tom Cullum is a fixed-income trading business manager at Bloomberg in New York. Cullum (“The Muni Market Readies for Electronic Trading,” page 46) was a bond trader and salesperson for Merrill Lynch and Dresdner Kleinwort Wasserstein before running a global credit fund for Banquo Credit Management. Cullum recently led the enhancement of {MBW }, an electronic-trading platform for municipal bond trades. “Users can now get straight-through…

2 min
what matters most to people in markets as they look ahead

“Parts of fixed-income are offering more compelling returns than stocks. It would be imprudent not to take advantage of opportunities in high-yield bonds, bank loans, and elements of the investmentgrade bond market and structured credit. Subprime autos look cheap, but I wouldn’t touch them.” Scott Minerd CHIEF INVESTMENT OFFICER AT GUGGENHEIM PARTNERS “The emerging economies have been the engine of growth for the last 15 years, and the fuel for that engine has been debt creation.” Chad Morganlander MONEY MANAGER AT STIFEL N ICOLAUS “In the short term, the U.K.’s EU referendum has potentially huge consequences across asset classes. A vote for Brexit could mean a 20 percent fall in sterling and a 1.5-percentage-point slowdown in GDP growth. Inflation and labor costs could rise sharply. But over time, Brexit could prove beneficial.” Ben Laidler GLOBAL…

7 min
the world is upside down. get used to it

JAPANESE FAMILIES seem to have a sudden affinity for home safes. According to the Tokyo-based manufacturer Eiko, shipments have doubled since last fall. And in Germany, insurer Munich Re has stashed some €10 million ($11.4 million) worth of its own cash into vaults. Why the squirreling? One possible reason is the creeping imposition of negative interest rates across the world, which could make it more rewarding to bypass banks—and a safe or vault is, well, more secure than a mattress. Welcome to the upsidedown world of modern monetary policy. In this new reality, borrowers get paid and savers penalized. Almost 500 million people in a quarter of the global economy now live in countries where interest rates measure less than zero. That would’ve been an almost unthinkable phenomenon before the 2008 financial…

1 min
the new trading floor

WELCOME TO Wall Street’s real home. The sight of human traders throwing elbows in an open outcry-style pit has mostly faded into memory. Today, trading in stocks, currencies, derivatives, and other assets happens in the windowless, humming confines of data centers, where exchanges store their most critical machinery. The Chicago Board Options Exchange, Nasdaq, and NYSE Group are among those that keep servers in cages on the floor of NY4, a facility in Secaucus, N.J., run by Equinix, the largest owner of interconnected data centers globally. This view, from a catwalk one story up, shows some of the miles of fiber-optic cable connecting exchanges, brokers, hedge funds, and others. Ductwork dissipates the heat the building’s 100,000-plus servers throw off. For a look inside the heart of the financial system, turn…

5 min
predicting the future by decoding the past

WHEN JAMES SHINN WAS working for the CIA as a senior East Asia expert more than a decade ago, he longed for the tools of a weatherman. He wanted to be able to predict that the chance of North Korea testfiring a missile within a month was, say, 60 percent. It remained a fantasy, he says, until now. Shinn and his 14-person team at Predata have developed software that numerically describes political volatility and risk. It vacuums up vast quantities of data from online conversations and comments, compares them with past patterns, and spits out a probability. Shinn likens his product to sabermetrics, the statisticsdriven baseball strategy popularized in Michael Lewis’s Moneyball. “By carefully gathering lots and lots of statistics on their past performance from all corners of the Internet, we…

6 min
the treasury market’s fastest traders don’t like trading treasuries

SAM PRIYADARSHI KNEW the Federal Reserve’s March statement was good for the Treasury market before he’d read a word of it. Just as the statement was released, Vanguard Group’s head fixed-income derivatives trader saw a chart of 10-year Treasury futures prices go vertical. The price move, a jump in trading volume, and other indicators of market depth all flashed bullish signals for Priyadarshi’s team on the trading floor of Vanguard’s “Goliath” fixed-income building in Valley Forge, Pa. Goldman Sachs analysts later said the statement was one of the most dovish releases since the financial crisis. On the other side of the floor, Gemma Wright-Casparius wasn’t looking at her screen at all. She handles portfolio decisions and trading for more than $60 billion of U.S. government-debt portfolios for Vanguard and was reading a…