I hear that the fact that Reuters Dealing 3000 was down added to the confusion because a lot of banks couldn’t cope with quoting some of the crosses. One of my buy-side muckers asked a bank why it was quoting such wide prices in AUD/JPY? The answer, he was told, was that the dealer didn’t really know where the rate was. “Can’t he quote around his inventory?” my mucker asked, but got no reply, suggesting that spot traders these days don’t have positions. Another old fogey emailed me saying: “I assume a lot of the young bucks would have said: ‘What do you mean, quote without a machine?’”
Anyway, there’s no point in rose-tinted nostalgia. Let’s stay positive. I have no doubt that banks make a whole lot more money these days because their dealers think they can’t quote without a machine, and that the answer is to simply widen their prices out when systems fall over. I dread to think how much money I cost some of my employers by believing I knew where the market was and where it was going.