Eichhorn: Dodd-Frank permanently shrank broker-dealer bond inventories
David Eichhorn · David Eichhorn - Serving Clients and Reducing Risk at NISA (EP.403) · Sep 2, 2024 · at 27:17
David Eichhorn, CEO of NISA Investment Advisors, explains why institutional managers act as liquidity providers in modern fixed income markets.
0:00 / 0:14exact quote · 14.1s
720p mp4 · rendered on demand · StarZero watermark
“Ever since, 2008, as Dodd-Frank came in, being enacted slowly over time, the dealer's balance sheets have just shrunk to be just a shell of what they once were. So They don't inventory bonds or many bonds anymore.”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from David Eichhorn
Eichhorn: If rates stay high, private credit will see more pain
“If we continue and rates stay high here, I don't see how there's not more pain in private credit.”
Eichhorn: PE-backed insurers use much more private credit and offshore reinsurance
“Clearly there is a very, very different model for the private equity backed insurers. A lot of insurers are using private credit to be sure, but the private equity backed are using it much more and other products, whether it be CLOs and using a lot of offshore…”
Eichhorn: PE-backed insurers trade at much higher funding note spreads
“Many insurers issue what are called funding agreement-backed notes. Those are policy-level notes. They're parapesu with policyholders, so they're a really great market measure of what's the risk of an insurer, and you just see it in that data. The private equi…”
Eichhorn: Macro interest rate calls offer poorly compensated risk
“I don't need to go on CNBC and say, here's what my rate call is, because we think those are really, really poorly compensated risks, even if you get it right more than you get it wrong.”
Eichhorn: NISA Regularly Talks Institutional Clients Out of Wall Street Derivative Pitches
“There's a lot of things pitched often by the dealer side, Wall Street side, that we don't really believe in, and we will go in and talk to clients, and we've frequently done this. We put some Surgeon General's warnings on things. We're like, here's where that …”
Eichhorn: Investors shouldn't pay 2-and-20 for known market inefficiencies in hedge funds
“I think there's increasingly a view that some component of hedge fund returns are known inefficiencies, and, you know, could be inefficiencies in the commodity market, et cetera, that are not extractable, and you shouldn't pay two in 20, and maybe not even one…”