Best Fixed Income Desks Table

Good question

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/vol…

Note that the study having been made by Citi, Citi is not included in these evaluations of market share.

Where would you put Citi in Rates/FX? As far as I know they are very strong in EM, correct?

in that table, what bank is "stan"?

DB for FX. GS for rates and commods.

I would say credit is something like:

JPM BAML Barcap Citi GS MS DB CS RBC WFS

where does Jefferies rank?

I dont know how we are ranking these firms and what "best" means, but I can say that as a hedge fund client JPM is definitely not anything close to the top at least not in rates (ie us treasuries, swaps, etc). They basically made a decision after the crisis not to try to cover smart, "fast-money" accounts in this product. But I rank desks based on how aggresive they are in making me markets...it doesnt mean that JPM isnt a good place to work in fixed income, it just means that you they have made a business decision that may limit your contact with the smarter buyside people as a salesperson or trader.

they are one of few imo that can make that decision given the amount of corporate business they print. fast money business isnt the easiest to trade (depending on what it is) but as bondarb mentioned there is an information component that is valuable. to me it depends on account and what type of business I see from them but in JPM case if that is considered 2-5% of PnL with a high likelihood of loss attached they could choose to show bad levels all the time which is obvious to accounts.

This is a bit off topic, but which banks are best for sovereign debt/interest rate research?

This is going to be a long post and could merit a thread of its own, but this is probably the best place to provide a thorough answer, so I'll go for it.

1. The pic with all the rankings, while good, is from 2009. Relative "rankings" may have changed a bit but again, this all seems very relative and ambiguous with all answers as to what rankings are seem to make more questions than answers.

2. Ranking could mean absolutely anything here, but I have a feeling that this is purely a metric of who sees what percentage of market volumes. That metric will include what is done electronically (REDI/Sigma-X @ Goldman, I think Autobahn is DB's platform) as well as through flesh and blood market makers. Some firms place their electronic platforms above market makers, and the other way around is true as well, but to a lesser degree. On the sell-side, this will impact how firms fare in this study quite significantly, as firms who place more efforts into satisfying clients with electronic liquidity in said products will likely fare better. If you want to learn to be a great dealer, the bank's emphasis on electronic liquidity may be of some importance to you, but using a survey or bank research to make that determination is misguided for a lot of liquid products where being a dealer is a dying art anyway.

Nowhere have I made any mention of how good the human dealers are at things like pricing, accommodating different types of clients (in terms of their price sensitivity and aggressiveness), p/l from prop trading, ability to jump to buyside, etc. That is because it is impossible to quantify some of these things, and the others that can be are never leaving the firm (particularly trader p/l). Also, with that Citi pic from zerohedge, you can't infer inter-desk p/l for a product group (ex: your banks cash 10s trader knows how to manage risk and has been lucky with some good ideas this year, but the swaps desk may be bleeding money from every hole. You won't know this unless you work there). So these surveys have nothing to go on in terms of trying to estimate prop trading abilities of different dealers.

For the less quantitative measures, it gets even more ambiguous. If you want to "jump to the buyside", I am assuming that is in another risk taking role, and there are very few members of this site who have enough experience to jump into another risk taking role. The idea that a junior analyst can spend as little as 0.5 - 3 years in training before taking on risk for one's own balance sheet is something that is mutually exclusive to banks and prop shops. The number of 25 year olds that run enough risk on a daily basis to be taken seriously by the buyside is effectively 0.000000 right now, and considering how risk averse a lot of these institutions have been over the last few years, I don't think that number is going higher. Also, if you want to be on the buyside, trying to become a dealer as some sort of intermediary role is kind of retarded. Dealers will train you to become dealers, not so that you can run off into the land of flowers and honey on the buyside and become instantly rich just by sitting at a desk and looking nice. If you want to be a sprinter, you run the 100m dash in training, you don't run the 10k and hope the skills translate over into your goal.

3. This makes no mention of client diversity. Bondarb mentions that certain banks fear getting run over by his flows (well done sir) and there is something to be said for that. Pricing up mutual funds in Montana all day and marking up a couple of bps off their flows is a dying business (these types of traders are going electronic) and isn't very good for trying to get a better view of what the market is up to. Granted, being on the other side of someone like Greg Coffey's flow only made it much harder to stay within your risk limits, but there is tremendous value in doing business with the Moore Caps, Tudors, Caxtons, Bondarbs and Soros's of the world, and if that means getting run over from time to time, then that is a price that gets paid for seeing some very relevant flow. There are certainly some liquidity abusers out there (Coffey as mentioned is a textbook example of someone who smoked banks and still likely had a negative lifetime p/l), but PMs are generally aware of the fact that the short term benefits are not worth the costs when liquidity really is crap (at least I like to think so).

So that should give you an idea as to what these rankings and surveys seek to achieve. The rise of all the e-dealers is making the industry a lot more efficient and definitely skews the rankings in terms of market share. But if there is one thing I can't stand it is the idea that getting to a bank that is at the top of these ratings is going to make you a better trader or make you more likely to have a career that sees a positive lifetime p/l. Those are two totally different skill sets and they always have been. If you really want to run your own book or take risk quickly,then I guess knowing which bank will allow you to do that is a relevant factor. However, if your goal is to run massive size at your own or another hedge fund, banks are really irrelevant in that process because the amount of people that make it to that level in this industry is an extremely small and meaningless sample size. If you have ever managed an amount of money that was/is important to you or someone who has seeded you (for all the college monkeys out there), I think the argument that that is more relevant than any of these rankings in terms of learning to manage risk is certainly valid and I would agree with it.

Hopefully that helps someone and I didn't just throw up info onto the internet.

great thread, in