From Venk's Quarterly Letter today ...
Before Dodd-Frank, there was a big difference between dealers and brokers. Loosely distinguished, the dealers were the larger underwriters, often part of banks with larger corporate banking efforts, whose traders were able to use significant amounts of balance sheet to provide liquidity to trading customers. Brokers, on the other hand, usually didn’t have balance sheet and acted as agents, simply lining up and sitting in the middle of buyers and sellers, who would effectively trade with one another. The difference is largely one of risk and timing. A dealer using balance sheet might buy a bond from a customer seller without being in touch with a buyer. The bet the trader is making is that she has chosen the right price and can then sell that bond to a buyer later for a price higher than what she paid previously.
https://1drv.ms/b/s!AmF1g-5ef-jIk81YZWY29QfGHGA8lAMy other heart break.
