Matt Levine, Columnist

Bond Trades and Merger Codenames

Also Dred Scott vs. the fiduciary rule, hedge fund returns, polo, oil unicorns, etc.

October 19, 2016 at 1:18 PM UTC

Matt Levine is a Bloomberg Opinion columnist. A former investment banker at Goldman Sachs, he was a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz; a clerk for the U.S. Court of Appeals for the 3rd Circuit; and an editor of Dealbreaker.

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Bond trading.

Here's the heartwarming story of a Goldman Sachs high-yield bond trader named Tom Malafronte, who bought bonds when customers were selling them, and sold them when customers were buying, and made $100 million between January and June. Congrats all around! In one sense, this is a story about the recovery of bond trading at the big banks this year, as Goldman, JPMorgan, Citigroup and Bank of America have all beat earnings expectations this quarter on stronger-than-expected bond trading revenues. (Though to be fair, Malafronte's success seems to have come in the previous two quarters.) Banks make money when clients want to trade, clients wanted to trade, and so Malafronte made money.