dChan
Anonymous ID: 4143f3 Jan. 16, 2020, 9:33 a.m. No.7830402   🗄️.is đź”—kun   >>0438

POTUS Goes After Bloomberg: Starting March 1, BLS Will Ban Lockup Computers, Hitting HFT Revenues

 

As first reported on Tuesday, moments ago the BLS confirmed that starting March 1, the Trump admin will ban all electronics including computers from the room where journalists receive early advance access to major economic reports, in an effort to ensure a level playing field, a U.S. official told the same wire services that stand to suffer the most from this major overhaul of how economic data is disseminated.

 

As discussed on Tuesday, currently, the Labor Department hosts "lockups" for major reports lasting 30 to 60 minutes, where journalists receive the data in a secure room, write stories on computers disconnected from the internet, and transmit them when connections are restored at the release time.

 

Confirming our speculation that this was a way for the Trump admin to hit Mike Bloomberg and his eponymous organization where it hurts, the U.S. official, speaking on a conference call with journalists, said "the change is being made because several news organizations that participate are able to profit by providing the numbers to algorithmic traders in a format that provides them an advantage."

 

Translation: Trump is now going after the source of Mike Bloomberg's wealth - the selling of zero-latency market-moving information to HFTs.

 

The overhaul will take effect March 1, the official said. Labor Department officials were asked if the change was specifically aimed at Bloomberg News, which participates in the lockups and whose founder and majority owner, Michael Bloomberg, is running for the Democratic presidential nomination. The official denied any political motivation and cited a prior recommendation by the Labor Department’s inspector general.

 

For those who missed the background on this critical, to all market participants, strateigsts, and traders story, here it is again.

 

Any time the US Department of Labor releases the jobs report on the first Friday of the month, wire agencies such as Bloomberg and Reuters already have a prepared barrage of market-moving data points ready to go to their paying subscribers (and, on the nanosecond, to frontrunning HFT clients) together with a commentary wrapper that is prepared in the 30-60 minutes before the official data release, prepared by journalists who are in "lockup" in a given government data room, which is meant to prevent them from leaking the data to other, more interested (and better funded) parties.

See Cap#1.

However, starting as soon as this week, the "lockup" may now be history, as well as those flashing red jobs headlines that set the market mood for the day, and often, the rest of the month (assuming, of course, that eventually fundamentals will matter again), because in what Bloomberg dubbed the "biggest change to economic data releases in decades", the Trump administration plans to limit the news media’s ability to prepare advance stories on market-moving economic data, such as the monthly jobs report, "in a move that could create a logjam in accessing figures such as the monthly jobs report."

 

Needless to say, Bloomberg - along with Reuters, and countless other wire services, who sell lockup data to extremely generous HFT clients for a lot of money - are not happy.

 

As noted above, currently the Labor Department hosts “lockups” for major reports lasting 30 to 60 minutes, where journalists receive the data in a secure room, write stories on computers disconnected from the internet, and transmit them when connections are restored at the release time.

 

However, for reasons not fully clear, the department under pressure from the administration, is looking at changes such as removal of computers from that room, and an announcement could come as soon as this week, said Bloomerg sources.

 

That, as Bloomberg which would be directly and very adversely affected notes, "could hinder the media’s ability to provide headlines, comprehensive stories and tables at the exact release time."

 

That's one interpretation, another is that it will further democratize information, allowing, or rather forcing, everyone to come up with their own fast take of the data, and even open up the field to new competitors who currently don't have access to the lockup.

 

This is big for markets. Quant strategies focusing on reading headlines will need a rethink. Will lead to huge info asymmetry post data releases. Although may boost role of market economists who need to digest raw data as quickly as possible.

 

There is another fringe benefit such an action would deliver: the US government would finally have to enter the 21st century with modernized websites:

 

If BLS removes lockups, billions in HFT data feed fees to wire services like Reuters and Bloomberg go up on smoke.

 

https://www.zerohedge.com/markets/trump-goes-after-bloomberg-starting-march-1-bls-will-ban-lockup-computers-hitting-hft