, Columnist
Deutsche Bank Did Some Bond Lying
Also bank mysteries, hedge-fund sexism, volatility and Crypto Watchdogs.
Bond lies.
In opaque and illiquid bond markets, if you think that you are getting ripped off by your trader or salesperson, the traditional thing to do is to go complain to her boss. "I do a lot of business with this bank," you say, "and if I find out that your salesperson is lying to me about the markup she is taking, I will put you in the penalty box." And then the boss takes the salesperson aside and says, look, obviously we want to make money, but you are squeezing this client a little too hard, maybe dial it back a bit. And the system works because the customers are sophisticated and can figure out when they are getting ripped off, and because the bosses know that they are sophisticated and so keep a lid on the ripoffs.