Odd Lots Podcast: Under the Rusty Hood of the $8 Trillion Corporate Bond Market

A market that's exploded in size without modernizing.

Every week, hosts Joe Weisenthal and Tracy Alloway take you on a not-so-random walk through hot topics in markets, finance, and economics.

On the agenda for our second episode is one of the hottest financial topics of them all: trading in the corporate bond market. This week we spoke with Chris White, the creator of Goldman Sachs’s GSessions bond-trading platform and now CEO at ViableMkts, about the difficulties of forcing change on this crucial area of finance.

The value of corporate bonds outstanding has jumped from $5.9 trillion in 2009 to more than $8 trillion currently, thanks to years of low interest rates that have encouraged companies to borrow from eager investors. At the same time, many have been warning about so-called liquidity, or ease of trading, in the rapidly expanding market. While stocks are traded with the click of a button, many bond deals are still struck over the phone. “What you’re getting is a market that’s exploded in size without modernizing,” says White.

We learn about the difficulties of shaking up a business that’s so far proved resistant to cultural and technological change. We also hear why White stopped calling internal meetings at Goldman, and discover the difference between “two-minute guys, two-year guys, and 10-year guys” within the storied investment bank.

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