Fax Me the Prices

_{Sign up to receive Surface Area or follow me on Linkedin or Twitter. Book a meeting here to talk about ghostwriting from my agency, Principals Media}.

My first real job as a journalist was to cover a market without access to prices.

It was 1991 and I was a reporter working for Bloomberg. I wrote a daily story about the fluctuations in debt issued by developing countries.

I would call bond traders and ask them which assets moved and why. I relied on the banks for all the prices and commentary.

I was flying blind, unlike my colleagues writing about Treasuries or U.S. equities.

How I solved the problem taught me a lot about how markets develop and the extraordinary value of data, as well as how media and marketing can be harnessed.

At the time, emerging markets were in their infancy. Many people still called the assets LDC debt, a politically incorrect acronym for “lesser developed countries.”

I started reaching out to market makers to ask if they would fax me prices and yields for major assets at the end of each day so I would know what happened.

Most banks had no interest in giving the prices to a reporter because it brought transparency.

But Alex Rodzianko, head of trading at Chemical Bank, saw an opportunity. He realized the bank could gain valuable PR by attaching its name to the data.

Next, I did something unusual. I published the data in a table accompanying my narrative story.

Effectively, I turned data into news.

In the 1990s, newspapers ran pages of stock market prices called “agate.” That information wasn’t yet available online. I produced the equivalent of agate for emerging market debt.

This was ridiculously time consuming because the prices were sent via fax and I had to retype them all into a word processing document to publish.

But I knew it was something of interest and valuable to the market, particularly the buy side, which didn’t have as much access to the information.

The first days we published the table you could almost hear a gasp in the market. What was Chemical Bank doing giving prices to a reporter at Bloomberg?

Initially some brokers were critical. They said Chemical’s prices weren’t accurate. Later, they wanted to put their name on something similar.

Chemical Bank got PR. I got the prices I needed. Clients got valuable information.

Eventually that fax would be replaced with a live feed. Along the way, the bid offer spread collapsed from points to a quarter and then an eight and less. Price transparency also spurred larger trading volumes.

This is how every market works. You start with static secondary market prices for something obscure like Mexican par bonds and end up with data feeds.

It happened with crypto and yesterday I saw a newsletter with collectible sneaker prices.

My friend Bhargav Shivarthy, founder of Pricing Culture, gathers indicative prices for alternative assets, everything from vintage cars to baseball cards.

There are so many more data sets waiting to be gathered and leveraged.

So many markets that have yet to emerge.

(Part of a series of lessons I learned from three decades at Bloomberg LP.)

BRIEF OBSERVATIONS

AMAZON DELIVERIES: This is one of those things everyone should do.  

THE FUTURE IS FEMALE: The future is female, at least among American television writers.

GRINDING YOUR GEARS: Refreshing perspective from the Internet: sometimes bad things happen for no reason.

THE PARADOX OF AUTOMATION: If people trust the algo too much they don’t pay attention and the results suffer.

FLOSSING: The market confirming that people don’t floss as much as they brush their teeth.