As the financial markets and banking models have changed due to increased regulations and further market stress since the 2008 financial crisis, the fixed income markets have seen a dramatic structural shift. The traditional voice-brokered bond trading model, whereby wall street dealers facilitate trades for buyers out of a bond inventory, has become less relevant. In its place, an electronic-trading focused market has emerged, where investors can trade with each other, essentially bypassing the broker middle-man. New capital requirements have caused traditional brokers and banks to pull back on corporate bond inventory, as they must hold an increased amount of capital against their corporate positions. Bond dealer corporate inventories are currently at the lowest level in the last 10 years, at $37 billion. This is down from $95 billion last year, and from $230 billion during the pre-financial crisis boom years. The European financial crisis has also shifted the way banks lend. European real estate companies have doubled their bond issuance this year, as banks in Europe have pulled back completely from traditional loans. A pullback in bond market activity from the traditional players means that smaller, more nimble bond investors (like SNW) are at an advantage. As electronic trading gains relevance, the average size of bond trades has declined, along with bid/ask spreads, which reduces our trading costs. Less liquidity in the market could increase volatility should the market become stressed, something we’ll look to take advantage of. All in all, SNW is participating in this market evolution, and we will continue to look for opportunities as these structural shifts continue.