Goodbye, old friend.
Here's the latest from our Highly Placed Professional:
'I can't tell you which of the four banks that have banned chat rooms is my client. I doubt they are remotely worried about seeing my comments and offers every day, but we've had a lot of laughs and done a lot of business in this closed space we shared.
When a group chat room or some other web based system is closed, it's a bit like losing a friend. You see, we rely so much more on internet based chat traffic to do business these days.
There are a lot of reasons for this: Firstly, people are under a lot of pressure to create paper trails that can be used if there is ever a problem with a trade, so obviously a transcript of the conversation is a valuable tool.
You might ask what's wrong with a tape of a telephone call. Well it's a lot harder to pinpoint and takes a lot more time and effort to produce. Also, these days, dealing floors are so much quieter, let alone the dealing desks or offices of investment funds, that it becomes almost a bit too public always to be yapping on the phone, with everyone able to hear your every word.
So one of the unintended consequences of digital traffic is that it forces everyone to join the club. It's also a lot easier for clients to brush off unwelcome calls or attention. You only have to press a button with an interrupt function to neatly dispose of a nuisance counterparty for the rest of the day. It's hardly surprising that formerly dynamic dealing rooms are now more like public libraries, where the main noise is the tapping of keyboards rather than the rustling of dusty pages.
So like many dealers, I have a list of favourite client chat rooms, and when the other day these guys at the bank said they had to close the room down, I felt a sense of loss. It's now harder to contact them, know when they are in, and we are all certainly off radar.
'Yeah mate, that's how we feel too, but to be honest it may be more than the chat rooms that are closing down.' It was then that I realised that the extent of some banks' recent Libor, foreign exchange and mortgage backed problems are now really starting to hit home with a vengeance. We hear about it a lot, but it hits home when people you have done business with are side-lined or made redundant.
So in more ways than one, it really is a case of 'Goodbye, old friend'.
image: © Abhi