His army of funds gained roughly $26 billion, the equivalent of more than $1 billion in paper profits every single trading session.

Yet Barrickman didnt predict Silicon Valley Banks collapse, or Credit Suisses tortured final days. He doesnt even have a view (at least that hes willing to share) on what the Federal Reserve will do next.

He runs Vanguard Group Inc.s $1 trillion bond indexing business for the Americas, a class of investing that to the outside world, at least is as vanilla as it gets.

Theres nothing vanilla about the money hes pulling in, though. The soft-spoken 47-year-olds funds lured $31 billion last year, even as active managers posted unprecedented outflows amid the worst year for bonds since at least 1977. In fact, he now controls nearly as much US debt including Treasuries, agency and corporate bonds as China, Americas second-largest foreign creditor.

That makes Barrickman exhibit A of a passive management revolution thats reshaping the world of fixed-income, just as it did equities a decade ago. No longer dominated by traders making multimillion-dollar bets and eating what they kill, the real money is flowing to guys like him, whose decisions are increasingly rippling through markets.

We do have size and scale, and that matters in the marketplace, Barrickman said in an interview. Tracking is job one, two and three, he said, adding if we can have a basis point a year, thats a lot of real money.

Equity investors have been shifting to passive index products for years. Created decades ago, their popularity ballooned following the 2008 financial crisis, fueled in part by skepticism of active money managers after stocks cratered.

The transition has been slower in fixed-income. Indexes are made of tens of thousands of over-the-counter bonds, many of which are so illiquid they wont change hands for weeks at a time. Its hard to buy the entire market the way equity investors can buy every stock, making it more difficult for an index fund to track the performance of its benchmark closely.

Indeed, the fixed-income market has long been seen as more complex relative to stocks, allowing firms to justify the need for active management, and the juicier fees that come with it.

But history is repeating. The dramatic losses in debt markets last year, fueled by the most aggressive Federal Reserve policy tightening in a generation, has turned what was once a relatively slow and steady shift away from active bond funds and toward passive products into a stampede.

The gap between passive and active net flows reached a record $1.04 trillion in 2022, almost triple any other year, according to data from EPFR. Passive funds lured $279 billion in new cash, while active funds bled $757 billion.

As of March, assets managed by passive funds surpassed $3 trillion for the first time. They now account for 31% of the fixed-income fund universe, the data show, up from just 13% a decade ago.

Barrickman himself now oversees three of the worlds four largest bond funds, including the $298 billion Vanguard Total Bond Market Index Fund, according to data compiled by Bloomberg.

That means many of the decisions he makes, like which bonds to buy when trying to replicate his funds underlying benchmarks, can have big consequences for the market (the Vanguard Total International Bond Index Fund, for example, only holds roughly half the 13,000 bonds in the index it tracks.)

We have to be, by definition, overweight some places and underweight others to build a sample, Barrickman said. Were dealing in a market that forces us to take some active positions.

Moving Market

Beyond Vanguard, the other big beneficiary of the shift from active to passive in fixed income has been BlackRock Inc. The firms more than 90 US index-tracking bond ETFs have taken in over $100 billion in the past year, according to data compiled by Bloomberg, more than any other firm.

Gang Hu, managing partner at Winshore Capital Partners, which specializes in inflation-protected investments, said passive funds, particularly those run by Vanguard and BlackRock, have become so big and influential that he keeps a spreadsheet tracking their daily flows. Their impact is particularly significant toward the end of the month, when funds move large swaths of securities around to accommodate investment flows, new issuance and maturing bonds as their benchmarks rebalance. 

Everyone watches their flows, Hu said. They could easily move the market. You have to anticipate their moves.

The sheer size of passive mutual funds and bond ETFs run by Barrickman and a few others have changed the dynamics of the market in recent years, said Thomas di Galoma, co-head of global rates trading at BTIG.

There used to be a time in the bond market when a lot of funds would move on the last day of the month, he said. But because they are so large now, they have to move days before month-end, which means their position adjustments affect yields for a longer period.

A native of Ohio, Barrickman graduated from Ohio Northern University before earning his MBA from Lehigh University. In 1999, he joined Vanguard as a municipal bond trader, before working as a bond index trader.

Rising through the ranks, he became the head of bond indexing in 2013. He likes to keep a low profile, rarely appearing on TV or social media. 

Last year, his $92 billion Vanguard Total Bond Market exchange-traded fund (ticker BND), lured $14 billion to become the worlds largest bond ETF.

Barrickman said he expects ETFs to attract a bigger share of passive inflows in the years ahead on account of their cheaper cost structure and the ability of investors to trade them in real time, like stocks.

Ironically, the increasing penetration of passive investing in the bond market has come as active managers have had some of their best years in recent memory relative to their benchmarks.

Over the past five years, 65% of actively managed bond funds tracking the Bloomberg USAgg Index have outperformed the gauge, according to data compiled by Bloomberg. The analysis includes 72 funds with assets of at least $1 billion.

For some, the nuance of the bond market, where issuers can have hundreds of securities, all with slightly different governing rules, lends itself to active managers who can capitalize on the complexity.

Far too much money has gone into passive indexation both on the equity side and the fixed-income side, said John Davi, chief executive officer at Astoria Portfolio Advisors. Active management in the bond world actually makes sense, because you have more opportunity to pick and choose your credit and to make calls on interest rates and duration in order to outperform.

Barrickman agrees that theres a place for active funds in fixed-income investing, even as passive products continue to eat away their market share. 

Were not anti-active, were anti high-cost, Barrickman said. Good low-cost active options, those absolutely have a place. The ETF structure itself has a lot of momentum and adoption.

With assistance from Katie Greifeld and Michael Mackenzie.

Khans party said he was arrested Tuesday in connection with a graft investigation involving a plot of land.

The Islamabad High Court said late Tuesday that the arrest was legal, according Khans lawyer, Intazar Hussain Panjutha. The NAB will present Khan in a special court Wednesday and request to keep him in custody to assist with the investigation, which will be challenged, Panjutha said.

The NAB has been used as a tool to go after political opponents in the past. Former premier Shahid Khaqan Abbasi and Finance Minister Miftah Ismail were kept in custody for months before being released and found innocent.

Khan faces a slew of court cases and was set to be formally indicted Wednesday in a case that involved allegations that he did not properly disclose earnings from the sale of state gifts from his time in office. 

The government has no control over the NAB, Interior Minister Rana Sanaullah said at a press conference in Islamabad. Khan has done corruption that is clearly documented. This and state-gift selling case are both evidence.

Pakistans dollar bonds pared earlier gains, with the security due April 2024 retreating to 50.1 cents on the dollar from as high as 51.3 earlier Tuesday, after news of the arrest. The nations rupee fell 0.35%, the most in a month, at close. Its benchmark KSE-100 Index fell by 1.1% at close, the most in almost seven weeks.

More protests, more disruption, more violence, and more political and economic dysfunction is on the way, said Hasnain Malik, a strategist at Tellimer in Dubai. Taking the painful decisions the economy needs and holding orderly elections will become even harder now.

The latest upheaval comes as Pakistan is grappling with an economy in deep distress. Moodys Investors Service has warned the nation could default without an International Monetary Fund bailout as its financing options beyond June are uncertain. It downgraded the nations rating to an all-time low earlier this year.

Prime Minister Shehbaz Sharif, who traveled to London to attended the coronation of King Charles III, decided to delay his return to Pakistan until Wednesday, Information Minister Marriyum Aurangzeb said Tuesday morning before the arrest, citing the need for consultations on political and national issues.

Islamabad is struggling to restart a $6.5 billion bailout program from the Washington-based lender, which has stalled after the government failed to meet some loan conditions. Political tensions will only add to the risks of a delay.

Over the weekend, Khan had once again accused the nations powerful military of being behind at least two attempts to murder him, focusing on the alleged involvement of a senior official from the Inter-Service Intelligence, or ISI, which oversees Pakistans internal security.

The army had slammed his remarks and asked him to address the matter in court.

The politician is agitating for early elections after getting ousted in April 2022 in a no-confidence vote. Emboldened by strong support in opinion polls and rallies, Khan has shown no signs of backing down against the government and the army and is seeking support from the Supreme Court to hold polls in two provinces for a start.

The arrest could backfire on Shehbaz Sharifs government, Kugelman said. 

It could stoke unrest, intensify public fury against the government, anger key Pakistani partners like China that have called for reduced tensions, and raise serious concerns among bilateral donors and the IMF.

With assistance from Ismail Dilawar, Netty Ismail, Srinivasan Sivabalan and Maria Elena Vizcaino.

The issue may sound trivial compared to real-life concerns such as mass shootings and killer storms. But its a big deal for people who rely on the mid-sized social network to recruit fellow gamers, swap virtual weapons and organize strategy in multiplayer games. A Reddit thread on the change drew more than 4,000 comments, the vast majority of them angry or at least unhappy.

Whats the deal with Discord usernames?

Discord users have long been free to choose any name they wanted, even ones already in use. That was part of the companys aim to let users represent themselves freely, according to a detailed May 3 blog post by Discord co-founder and chief technology officer Stanislav Vishnevskiy. The approach differed from social platforms such as Twitter, which has always required users to select unique names.

Discord assigned each username an invisible four-digit identifier to distinguish them from duplicates. But as Discord grew, the San Francisco-based company decided to expand its messaging system initially limited to conversations within shared groups it calls servers to the entire platform. To help people to find their friends across servers, Discord made those four-digit codes a visible part of usernames. If your username was SgtRock, you might have suddenly found yourself with the handle SgtRock#1842.

That, too, seemed to work for a while. But according to Vishnevskiys post, more than 40% of Discord users either dont remember their four-digit codes variously known as tags or discriminators in Discord-speak or know what they are in the first place. Almost half of all friend requests on Discord fail to reach the correct person, the executive wrote.

So whats changing?

Two changes are taking place simultaneously. In the coming weeks, Vishnevskiy wrote, Discord will start notifying users via an in-app message when theyre cleared to select a new username. Server owners will get priority, followed by users based on the age of their accounts. Paid subscribers to a Discord service that lets them customize their discriminators (among other benefits) will also get early access, although neither Vishnevskiys post nor Discords user documentation offer details.

At the same time, Discord is also allowing users to pick a non-exclusive display name of their choosing. This will be displayed prominently on user profiles, but unlike the username, it wont be used for messaging.

All of this will roll out slowly over the course of several months, per the Discord announcements.

Why does this matter?

Some gamers take their usernames extremely seriously, viewing them as unique and personal extensions of their identity, not to mention pillars of their online reputations. Many also dont appreciate changes being thrust upon them. In the Reddit thread, complaints range from dont fix what isnt broken to accusations that the changes are mostly designed to attract new and often younger users who might be put off by the complexity of the existing system.

That might not be far from the truth, experts suggest. Social platforms tend to be heavily used by a small group and very lightly used by a much larger group, said Drew Margolin, a Cornell University professor of communications. In a commercial sense, he said, theres this tension between what would be appealing to a larger market and what are the main users.

Margolin suggests that network effects that is, the fact that users and their friends are already on Discord, making it difficult to leave will most likely outweigh the current outrage, whose impact is difficult to assess. But theres still a potential for serious blowback, as some gamers have been known to go to extreme lengths to obtain coveted usernames.

What are the possible consequences?

Gamers warn that the move could create a black market in desirable names or even spark dangerous threats to force their surrender. Such threats can range from online harassment campaigns to swatting  the highly dangerous practice of making fake crime reports to police in order to provoke an armed law enforcement response at an opponents home.

Swatting can lead to injuries and deaths sometimes of people unconnected to whatever online feud provoked the action. In 2017, an innocent man was fatally shot by Wichita police responding to a hoax call reporting a kidnapping and shooting. The call was make by a California man named Tyler Barriss, who authorities said was recruited by another gamer to make the call. But the address Barriss used was old, leading police to to a person who wasnt involved in the video game or the dispute.

Barriss pled guilty to making multiple false emergency calls across the U.S. and in 2019 was sentenced to 20 years in prison.

The verdict was announced in a federal courtroom in New York City on the first day of jury deliberations. Jurors rejected Carrolls claims that she was raped, but found Trump liable for sexually abusing her.

Hours earlier, U.S. District Judge Lewis A. Kaplan read instructions on the law to the nine-person jury before the panel began discussing Carrolls allegations of battery and defamation shortly before noon.

Trump, who did not attend the trial, has insisted he never sexually assaulted Carroll or even knew her.

Kaplan told jurors that the first question on the verdict form was to decide whether they think there is more than a 50% chance that Trump raped Carroll inside a store dressing room. If they answered yes, they would then decide whether compensatory and punitive damages should be awarded.

If they answered no on the rape question, they could then decide if Trump subjected her to lesser forms of assault involving sexual contact without her consent or forcible touching to degrade her or gratify his sexual desire. If they answered yes on either of those questions, they will decide if damages are appropriate.

On defamation claims stemming from a statement Trump made on social media last October, Kaplan said jurors needed to be guided by a higher legal standard clear and convincing evidence.

He said they would have to agree it was highly probable that Trumps statement was false and was made maliciously with deliberate intent to injure or out of hatred or ill will with reckless disregard for Carrolls rights.

Meanwhile, Trump posted a new message on social media, complaining that he is now awaiting the jurys decision on a False Accusation. He said he is not allowed to speak or defend myself, even as hard nosed reporters scream questions about this case at me.

Trump said he will not speak until after the trial, but will appeal the Unconstitutional silencing of me no matter the outcome!

Trump never attended the trial, which is in its third week, and rejected an invitation to testify, which the judge extended through the weekend even after Trumps attorney, Joe Tacopina, said Thursday that his client would not testify.

Tacopina told the jury in closing arguments Monday that Carrolls account is too far fetched to be believed. He said she made it up to fuel sales of a 2019 memoir in which she first publicly revealed her claims and to disparage Trump for political reasons.

Carrolls attorney, Roberta Kaplan, cited excerpts from Trumps October deposition and his notorious comments on a 2005 Access Hollywood video in which he said celebrities can grab women between the legs without asking.

She urged jurors to believe her client.

He didnt even bother to show up here in person, Kaplan said. She said much of what he said in his deposition and in public statements actually supports our side of the case.

In a very real sense, Donald Trump is a witness against himself, she said. He knows what he did. He knows that he sexually assaulted E. Jean Carroll.

Carroll, 79, testified that she had a chance encounter with Trump at the Bergdorf Goodman store across the street from Trump Tower. She said it was a lighthearted interaction in which they teased each other about trying on a piece of lingerie before Trump became violent inside a dressing room.

Tacopina told jurors there was no reason to call Trump as a witness when Carroll cant even recall when her encounter with Trump happened.

He told the jury Carroll made up her claims after hearing about a 2012 Law and Order episode in which a woman is raped in the dressing room of the lingerie section of a Bergdorf Goodman store.

They modeled their secret scheme on an episode of one of the most popular shows on television, he said of Carroll.

Two of Carrolls friends testified that she told them about the encounter with Trump shortly after it happened, many years before the Law and Order episode aired.