Bloomberg’s fury at some misstep or disappointment often meant a telephone slammed or thrown across the desk. Some employees remembered gauging the length of the telephone wires before approaching the boss with questionable news. “I do tend to break phones all the time,” Bloomberg admitted. That was when telephones were still safely tethered to telephone wires.37 He often resorted to his rough Salomon vocabulary and his favorite dirty jokes to relieve the tension, much of which he had created on his own.
Bloomberg later argued that the secret was not simply these fourteen-hour days, it was picking the right project, producing it on time, building an interactive machine full of data added bit by bit by bit. Producing the Bloomberg box was like learning to read, he would say, you start with one-syllable words. “If you try to read Chaucer in elementary school, you’ll never accomplish anything.”38 Later, as he grew older, he would add luck to that equation, but often with a standard caveat. “Work hard enough and you make your own luck,” he said.39
Bloomberg’s timing to focus on bonds for the early Market Master looked brilliant, especially in retrospect. As the economy was beginning to sour, Paul Volcker, the Federal Reserve Board chairman, announced that bond interest rates would float, and as Michael Lewis wrote,“Overnight the bond market was transformed from a backwater into a casino.”40 Bloomberg, with his machine focused on the bond market, was there to rake in the house proceeds.41
When Merrill made their early deal with Bloomberg, he promised not to sell the machine outside the company. Soon, however, he got the okay to see if other customers were interested. Bloomberg and Secunda would lead the team going around the country to market their machine with the Merrill Lynch bull logo on it.
To go to conventions where their machine was always “between the Great Bear water jug and the ladies room,” as Secunda remembered, the duo flew “in the back of the plane,” tourist class. They slept in seedy third-rate hotels like the one in Chicago with a McDonald’s in the lobby, a room with a broken sink, and a communal bathroom down the hall.42
Bloomberg did the talking; Secunda did the demos. “In the early days, people were either amazed or they just couldn’t understand,” Secunda recalled. One executive groused, “Why do I need all that? I get a report at the end of the day.” Secunda just shook his head at a smart man’s ignorance.43
Soon, however, word got out about the Bloomberg machine that bond traders quickly grew to love. A Market Master made them smarter, made them money. The financial press also began to discover the bond traders’ secret, and Institutional Investor lavished early praise on Bloomberg’s machine. “Market Master has become one of the most popular additions to the fixed-income manager’s crowded desk,” the respected magazine gushed. “Market Master can examine one security or an entire market.”44
One early problem was the name. Market Master sounded like a kitchen appliance. And almost nobody could remember the name of the company. What was it? Innovative, uh, something?
So Michael Bloomberg named the company and the machine after himself. His argument was that somebody else was using the name Market Master and, “anyways,” as he always said, people kept calling it “Bloomberg’s machine” or the Bloomberg. Like the Dows and the Reuters, the Fords, the Chryslers, and of course his beloved Salomon Brothers, in 1986 Bloomberg stopped any pretense of humility about the increasingly coveted machine. The company became the Bloomberg Limited Partnership and the box became the Bloomberg Terminal.45
His old friends were not surprised. One recalled that each time the younger Mike made a phone call—to hire the cook for the fraternity, to rent the summer cottage in the Hamptons—he stressed his name, repeatedly, to make sure the person on the other end could remember it. “That’s Mike Bloomberg, B-L-O-O-M-B-E-R-G,” he would say, spelling it once or more, just in case.
Thus, the brand was born. Soon, there would also be Bloomberg News, Bloomberg Television, radio (WBBR), Bloomberg Businessweek, Bloomberg Markets, Bloomberg Pursuits, Bloomberg Politics, Bloomberg Government, Bloomberg Law, Bloomberg Tradebook, Bloomberg Philanthropies, to name a few. His autobiography is titled, what else, Bloomberg by Bloomberg. When he ran for mayor in 2001, his financial declaration to city officials would list thirty-nine subsidiaries with such names as Bloomberg Services LLC or Bloomberg Bondtrade LLC or Bloomberg Philippines LLC. His philanthropy would spread his name to universities, hospitals, art galleries, and Boston’s science museum where the Bloomberg tag would be added to a room or a branch or some vital operation.
The name became the profit center, the business. But it was also attached to the very proud Mike Bloomberg. Protect the company; protect the name; protect the man. In 2014, his lawyers registered about four hundred web addresses when a new city domain became available. The idea, of course, was to make certain they didn’t fall in the wrong hands. They included normal links to Bloomberg and his empire, but they also included MikeIsTooShort.nyc and MikeBloombergisaDweeb.nyc, several versions of Fuckbloomberg.nyc or Bloombergthespoiler.nyc.46
* * *
The key to the continued success of the Bloomberg—and a way to ward off competitors—was to keep adding data and explanations of data and getting it organized faster for the customer. During the rocky first years, Bloomberg had one of his many fortuitous coffee dates—this time with a man named John Aubert, who owned something called Sinkers (not fishing gear, this was data about bonds being paid off). Aubert was an enthusiastic data nerd, but he was unhappy with his business. After the two talked, Aubert agreed to take over and organize a good part of Bloomberg’s data collection. He had one requirement. “I didn’t want to live in New York,” Aubert recalled years later.47 Aubert lived outside Princeton, New Jersey, in a little community called Skillman. It is peaceful and quiet, a Grandma Moses landscape come lazily to life. So Bloomberg agreed, as long as it was near an airfield so that he and others could get out easily to the “brain,” as it was called, and back to the city.
Aubert’s operation was housed in a small building that could have been a rural dentist’s office. The staff grew steadily so that by 2017 nearly 1,200 people worked in two new, high-tech buildings that looked like almost any corporate back office or the bookkeeping center for the university.
Workers in this comfortable field office lived by the mantra “Data is the key to the kingdom,” and Bloomberg created a cushy world for them with elaborate free luncheons and their own garden, games on the lawn on nice spring days. But when the corporate reports came in over the years, they raced to get them onto the computers so that they could be massaged into charts and added to the historical record for the company and the industry.
* * *
Data had been key to Bloomberg’s kingdom from the beginning. One especially important cache came early from the New York Federal Reserve in downtown Manhattan. The Fed was the source for the rates of U.S. Treasuries that could affect every company, every CD holder. It was on the list of must-reads every day for stock and bond traders around the world.
But even in the 1980s, the New York Fed still used a system straight out of the 1950s. Late every workday afternoon a Fed worker would give handwritten lists of prices to a runner who would then scurry to midtown, if you could scurry during the city’s notorious rush hour. At Rockefeller Center’s offices of the Associated Press, a harried typist would hurriedly punch in the details to the AP’s many clients. In 1987, Bloomberg convinced the Fed, the Associated Press, and others including the Wall Street Journal to scrap this “pony express,”48 as he called it, that resulted in plenty of mistakes, mostly typographical errors. Instead, Bloomberg offered to take over the task and transmit the numbers immediately (or in about five seconds),49 and electronically at 5:00 p.m. every day. Bloomberg then got the credit for providing what some felt was the most important piece of financial information published in the U.S. every day. Bloomberg celebrated, of course: “That, needless to say, made me very happy.”50
Eventually the data banks at Bloomberg would bulge with infor
mation, and the Bloomberg became a kind of Google for business. From the beginning, the big selling point was that you could ask the terminal questions, and “we’d pull data from different sources and combine it to give you an answer,” Secunda said.51 If there were three guys offering a three-year-note, Bloomberg showed them together, an instant comparison, and if you wanted a graph to go with it, sure, Bloomberg would create one for you. And, more important, as Wall Street became more complex and data seemed to come from everywhere, the Bloomberg analysts could usually provide guidance.
Mike Bloomberg was always moving, pushing the company to expand its reach, more customers, more offerings on the terminal. When the fixed income business was a rousing success, Bloomberg decided it was time to expand. He wanted to add equities to the terminal, not just bonds. It was time for the big stock markets, too.
“At one point, Mike says, ‘We’re gonna take some of your resources away . . . and we’re gonna repurpose people to start doing equities, and I want a significant amount of the sales force to go out because it’s a hard sell.’ ”
Secunda remembered the panic it caused in the company. “I’m like, ‘Oh, my God, you’re going to wreck us because we have such an opportunity here [where we are],’ ” he said. “But, of course, he was right . . .
“He pushed me and other people out of our comfort zones into places where, you know, he saw opportunity, and he was willing to take the risk.”52
As the market grew more complex so did the terminal. By 2016, for example, there were about fourteen thousand different functions on the machine, so many that few company insiders, much less customers, had tried to use all of them.53
Other additions turned out to be not only helpful to clients, but also vital to the business. The best example was the Bloomberg machine’s internal email. It was not simply a closed chat room for traders. It was a club. “Bloomberg Me” was its password, and membership required $12,000 a year (and later $22,000 a year) as the basic rental for the Bloomberg machine.
Pioneered in the early 1990s, the messenger service was fairly basic. “We thought being able to talk to customers was a lot more powerful than a broadcast for everybody,” Secunda explained. And since almost everybody with a Bloomberg had email, you stood a better chance of contacting the CEO, not the summer intern. It was “the world’s most expensive email,” one user said.54 Expensive and exclusive—for many, that was exactly the point.
On September 22, 1988, Bloomberg’s magic machine had been anointed from on high—by the Wall Street Journal. On the front page of the Journal, two financial reporters, Matthew Winkler and Michael Miller, described the mastermind of this new financial machine as a “breezy, profane” former trader who not only had “a puckish sense of humor and a prodigious temper,” but who also had an “audacious plan” to transform the $4 trillion global bond market.
The bond market was “a chaotic bazaar where prices and products vary depending on where you are shopping,” they wrote. What if Bloomberg could provide a single quotation system, a central market for bonds, for example? The article was heavy on possibilities, once again portraying the plucky little Bloomberg operation versus the giants like Reuters and even Telerate (the Journal company, Dow Jones, owned 56 percent of Telerate at that point).
Miller and Winkler compared Bloomberg’s growing system to the sudden breakthrough by American and United Airlines, which had hooked agents on their electronic reservations and ticketing systems. And they advised Merrill that it was time to break their old agreement that barred Bloomberg from selling his machines everywhere, even to Merrill’s competitors. Because Merrill owned 30 percent at that point, Bloomberg’s success would only add to their bottom line. Brokers at the excluded Wall Street firms were “hungry” for the Bloomberg machine and were even ready to swap their bond prices for the analysis.55
Bloomberg proudly added the page to his office wall. But he was also ready to do more than enjoy a moment’s praise, even from the Journal.
5
BLOOMBERG MAKES THE NEWS
“I was so addicted to [the] Bloomberg . . . In a few seconds, I could learn an incredible amount.”
—Floyd Norris, former New York Times columnist
If timing is everything in the financial world, Michael Bloomberg believed in 1990 that it was the right moment to get into the journalism business. He watched the Berlin Wall come down in 1989 and, as he saw it, “Capitalism had triumphed.”1 At the same time, journalism was in trouble. The big international story—the cold war—had fizzled, and readers were looking elsewhere for news. Two newspaper towns were barely sustaining one newspaper. Lots of journalists needed jobs, and few news organizations knew how to cover the new obsession—with money.
“Readers might not have realized it to start with,” Bloomberg said, “but here was a hole. I knew Bloomberg could fill it.”2
He also knew just the man to do it, that combustible, thirty-three-year-old Wall Street Journal reporter named Matthew Winkler, who had been one of the authors of the 1988 article on his wall. Winkler’s own story reads like a guidebook for the classic Mike Bloomberg hire. When he decided he needed his own wire service for his terminals, Bloomberg turned to the highest-energy journalist he knew, a man who also understood what his company was doing.
Matthew Winkler had discovered Mike Bloomberg’s moneymaking machine3 when he was in London writing for the Journal. A recent graduate of Kenyon College with a degree in history, Winkler was suddenly swept up in a financial journalist’s dream job: he was covering the European markets in the 1980s for the Wall Street Journal just as Prime Minister Margaret Thatcher ordered a major deregulation of the financial industry in London. The upheaval in the markets was so dramatic that it became known as a Big Bang.4
One of Winkler’s main sources during that tumultuous time was a bond expert at Merrill Lynch who shared insights that “were always right and always impeccable,” as Winkler put it. One day Winkler asked his source, “I know you’re brilliant and all, but how do you come up with all this stuff every day when we talk?” The secret, the trader admitted, was that he had “a Bloomberg on his desk,” and Winkler rushed over to see this strange new device. He knew about other computers, Quotrons, Telerates, but this “diminutive screen” was obviously very different. The Bloomberg “in its infancy could tell whether one security was cheaper or more expensive than the others. There was no system that could do that at that time,” Winkler remembered. What surprised him was that other companies and news organizations had access to some of the same data, the prices, plus information of all sorts going back years, for example. They knew stuff that they weren’t really using; it was stacked in a basement somewhere. In contrast, Bloomberg was scraping whatever facts and numbers he could find to give historical context, the relative value of financial products. And to give it quickly.
* * *
Back in New York in December 1987, Winkler, by then quite the expert on bonds, and Michael Miller, who covered technology, started comparing notes over lunch at the Journal cafeteria. The two journalists quickly recognized what would become the most important story in Winkler’s career. They called Mike Bloomberg to ask if he would sit for an interview. It was like asking a struggling actor if he’d like the title role in a new film called Batman.
Bloomberg quickly invited the duo to his now-expanded offices in an I. M. Pei building at Park Avenue and Fifty-ninth Street. The man who had so admired the open hub at Salomon Brothers had an old-fashioned office with an old-fashioned wooden door that you could close to seal off his staff, now numbering about 220 at various offices around the country. As soon as Winkler and Miller sat down, Bloomberg began telling them about how he had the best company “in the world” and even the best employees, who would jump out the window for him to serve his happy customers. “Right,” Winkler replied. “And the dish ran away with the spoon.”
Suddenly Bloomberg stood up and stomped away, furious at these skeptics, these journalists doubting his word. Winkler
and Miller weren’t certain whether they were supposed to find their way out. But, a few minutes later, Bloomberg came back, this time lugging a large stack of computer printouts, which he dumped in Winkler’s lap. “There,” Bloomberg said, pointing to the list of his customers. “If you don’t believe what I’m saying, call ’em yourself.”
The list with names and phone numbers was pay dirt for newspaper reporters, and Winkler and Miller spent the next five months calling dozens of Bloomberg clients to ask how they fared on his machines. The result was the story on September 22, 1988, that was like a coming-out in the financial world for the Bloomberg Terminal.
About a year later, Winkler5 got a call from Bloomberg, who said he wanted some advice. Winkler guffawed. Advice from a mere reporter? Bloomberg was serious. He wanted to get in the news business. How could it be done? Winkler quickly began to muse about how Bloomberg could marry his data and analysis with up-to-the-minute news. Winkler told him, “You’d actually have something that right now doesn’t exist. Nobody has it.” Something that doesn’t exist, something that nobody else had—Winkler was dangling a tantalizing prospect before a man who was busy creating a machine that nobody else had, that didn’t exist elsewhere.
At a Japanese restaurant later that day, Winkler mapped out a more detailed plan for Bloomberg to follow, starting small with five reporters in Tokyo, five in London, and five in New York. (Bloomberg wanted two in each city, Winkler said.) “Good,” Bloomberg concluded. “I’m gonna do it. You’re gonna do it for me. When can you start?” Winkler said it all happened so fast he didn’t even ask about his salary. (Like top Bloomberg hires, he didn’t suffer, of course.)
The Many Lives of Michael Bloomberg Page 7
