Buyside on the rise, really?

There's been lots of talk about how the recent cataclysm has dealt the sellside a blow, to the benefit of the buyside. That's an easy way to look at the situation, and that's how it's outlined in a piece from the Financial Times. At first glance, it does seem like the traditional sellside--as defined as the big powerful dealers--has been set back, but you really have to go sector by sector.

When it comes to the equity market, you could easily make the case that the buyside has gained clout over the past decade. When it comes to bonds, the buyside seems to be able to finagle better terms. As for hedge funds--the most active of the buyside players--they've been humbled a bit, and their buyside (the big institutions) are winning more favorable terms.

The big test coming up will be the CDS market, and we are seeing a cosmic battle shaping up: Big dealers bent on preserving their profits against the government, that would force upon them a whole new system that would ultimately benefit the buyside.

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