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Working From Home Feeds Market’s Woes in Little Ways That Add Up Working From Home Feeds Market’s Woes in Little Ways That Add Up
(about 2 months later)
Toggling between two computer screens instead of four. Slower wireless connections. Plain old cellphones — missed calls and all — standing in for highly programmed devices that allow instantaneous connections. Instant messaging and video conferencing replacing quick bursts of conversation across a floor.Toggling between two computer screens instead of four. Slower wireless connections. Plain old cellphones — missed calls and all — standing in for highly programmed devices that allow instantaneous connections. Instant messaging and video conferencing replacing quick bursts of conversation across a floor.
Ever since the coronavirus pandemic forced thousands of traders, sales representatives, analysts, bankers and risk managers out of their workplaces and into their homes, the foot soldiers of finance have been making do with technology that’s far more ordinary than many of them are used to.Ever since the coronavirus pandemic forced thousands of traders, sales representatives, analysts, bankers and risk managers out of their workplaces and into their homes, the foot soldiers of finance have been making do with technology that’s far more ordinary than many of them are used to.
The individual inconveniences are relatively minor — one trader missed a special Bloomberg keyboard, another struggled with having the chat window to his left instead of right — but together, they have had a noticeable impact on the functioning of markets, according to traders, investors and regulators. Over the last month, as much of the finance industry adjusted to working from home, the rapid-fire, split-second nature of global trading slowed slightly because communicating decisions took longer. And that, in turn, added a layer of unexpected friction to already volatile markets.The individual inconveniences are relatively minor — one trader missed a special Bloomberg keyboard, another struggled with having the chat window to his left instead of right — but together, they have had a noticeable impact on the functioning of markets, according to traders, investors and regulators. Over the last month, as much of the finance industry adjusted to working from home, the rapid-fire, split-second nature of global trading slowed slightly because communicating decisions took longer. And that, in turn, added a layer of unexpected friction to already volatile markets.
“When people are in a new environment and using new systems, combined with market volatility, it slows things down a bit,” said Michael O’Brien, director of global trading at the Boston-based investment management company Eaton Vance.“When people are in a new environment and using new systems, combined with market volatility, it slows things down a bit,” said Michael O’Brien, director of global trading at the Boston-based investment management company Eaton Vance.
Of course, much of the recent choppiness in financial markets is tied to fears about the economic fallout of the pandemic, as people around the country shelter in place. But the sudden scattering of many of Wall Street’s traders from their hubs in Lower and Midtown Manhattan and toward a honeycomb of home offices and emergency backup locations introduced an element of discombobulation that few firms had prepared for. Traders around the country faced similar challenges.Of course, much of the recent choppiness in financial markets is tied to fears about the economic fallout of the pandemic, as people around the country shelter in place. But the sudden scattering of many of Wall Street’s traders from their hubs in Lower and Midtown Manhattan and toward a honeycomb of home offices and emergency backup locations introduced an element of discombobulation that few firms had prepared for. Traders around the country faced similar challenges.
Mehmet Kinak, the global head of systematic trading at T. Rowe Price, an asset management company, used to sit with a group of about a dozen traders on the seventh floor of his company’s headquarters in Baltimore. Past the sea of screens — traders typically had three or four at their desks — were views of the National Aquarium and Camden Yards, the home of the Orioles.Mehmet Kinak, the global head of systematic trading at T. Rowe Price, an asset management company, used to sit with a group of about a dozen traders on the seventh floor of his company’s headquarters in Baltimore. Past the sea of screens — traders typically had three or four at their desks — were views of the National Aquarium and Camden Yards, the home of the Orioles.
Now, Mr. Kinak logs in from his home office — a small room in the basement of his Elk Ridge, Md., residence. Instead of engaging in constant chatter, his group connects via live chat tools such as Webex and Symphony. He’s noticed a slight slowdown in the pace of trading with partners on Wall Street as well, which he attributes to a combination of wild swings in markets and the transition to working from home.Now, Mr. Kinak logs in from his home office — a small room in the basement of his Elk Ridge, Md., residence. Instead of engaging in constant chatter, his group connects via live chat tools such as Webex and Symphony. He’s noticed a slight slowdown in the pace of trading with partners on Wall Street as well, which he attributes to a combination of wild swings in markets and the transition to working from home.
“It just takes a little bit more time,” said Mr. Kinak. “But incrementally, it adds up.”“It just takes a little bit more time,” said Mr. Kinak. “But incrementally, it adds up.”
The global financial system is intricate and highly complex, made up of thousands of companies — banks, hedge funds, asset managers, trading specialists — that buy and sell trillions of dollars in assets like stocks, bonds and currencies for themselves or their clients. To do so, companies invest heavily in technology and have elaborate setups meant to simplify communication between trading desks, analysts and clients. Milliseconds make a difference in this environment, because prices can change swiftly.The global financial system is intricate and highly complex, made up of thousands of companies — banks, hedge funds, asset managers, trading specialists — that buy and sell trillions of dollars in assets like stocks, bonds and currencies for themselves or their clients. To do so, companies invest heavily in technology and have elaborate setups meant to simplify communication between trading desks, analysts and clients. Milliseconds make a difference in this environment, because prices can change swiftly.
Some of this activity is deemed so important that President Trump last month declared banking employees “essential” to the functioning of the U.S. economy and exempted them from orders to stay at home or stop working. Some Wall Street employees are still going into the office — especially those on trading floors where activity is both highly regulated and customized, and difficult to replicate at home.Some of this activity is deemed so important that President Trump last month declared banking employees “essential” to the functioning of the U.S. economy and exempted them from orders to stay at home or stop working. Some Wall Street employees are still going into the office — especially those on trading floors where activity is both highly regulated and customized, and difficult to replicate at home.
Troy Rohrbaugh, the head of global markets at JPMorgan Chase recalled how, one day in mid-March, when the market was swinging wildly, a large client needed to sell a significant chunk of bonds. Mr. Rohrbaugh, who was in his office at the bank’s Midtown headquarters, stepped onto the trading floor to confer with a couple of traders and a salesman.Troy Rohrbaugh, the head of global markets at JPMorgan Chase recalled how, one day in mid-March, when the market was swinging wildly, a large client needed to sell a significant chunk of bonds. Mr. Rohrbaugh, who was in his office at the bank’s Midtown headquarters, stepped onto the trading floor to confer with a couple of traders and a salesman.
“We were done and dusted and shelling a price to a client in two minutes, three minutes,” he said. “Can you imagine that conversation taking 30 minutes or longer in markets that are moving as rapidly as they are now?” He continues to work from the office despite a recent outbreak of Covid-19 there.“We were done and dusted and shelling a price to a client in two minutes, three minutes,” he said. “Can you imagine that conversation taking 30 minutes or longer in markets that are moving as rapidly as they are now?” He continues to work from the office despite a recent outbreak of Covid-19 there.
Another company, Citadel Securities, a Chicago “market maker” that matches buyers and sellers, booked a hotel — the luxury Four Seasons resort in Palm Beach, Fla. — and set up a makeshift trading floor so it could continue to do business uninterrupted.Another company, Citadel Securities, a Chicago “market maker” that matches buyers and sellers, booked a hotel — the luxury Four Seasons resort in Palm Beach, Fla. — and set up a makeshift trading floor so it could continue to do business uninterrupted.
But for the most part, financial companies have put in effect strict work-from-home policies. Traders say the impact of the transition has been the greatest in less transparent markets such as corporate bonds. Unlike stock markets, where exchanges provide real-time prices that traders can act upon at any moment, prices in so-called over-the-counter markets for bonds are often negotiated during each trade.But for the most part, financial companies have put in effect strict work-from-home policies. Traders say the impact of the transition has been the greatest in less transparent markets such as corporate bonds. Unlike stock markets, where exchanges provide real-time prices that traders can act upon at any moment, prices in so-called over-the-counter markets for bonds are often negotiated during each trade.
On a typical trading desk, bond traders can gather price information, haggle with brokers and clients or check in with analysts and sales representatives with a few shouts or by pressing a button. By contrast, working from home requires phone calls and instant messages, which take more time, even as markets continue to trade and prices fluctuate before a decision can be made.On a typical trading desk, bond traders can gather price information, haggle with brokers and clients or check in with analysts and sales representatives with a few shouts or by pressing a button. By contrast, working from home requires phone calls and instant messages, which take more time, even as markets continue to trade and prices fluctuate before a decision can be made.
“Trading floors are designed the way they are to most effectively and most efficiently socialize information,” said Joshua Younger, a bond market analyst at JPMorgan. Running a trading operation from home is like “a football team running a play by text,” he said. “It wouldn’t work as well. All the information would get conveyed, but not at the speed and the pace that’s required.”“Trading floors are designed the way they are to most effectively and most efficiently socialize information,” said Joshua Younger, a bond market analyst at JPMorgan. Running a trading operation from home is like “a football team running a play by text,” he said. “It wouldn’t work as well. All the information would get conveyed, but not at the speed and the pace that’s required.”
Government officials who monitor the smooth functioning of markets, and traders and investors who depend on it, note that slower connections have created lags leading to uncertainty — say, about whether a buy or sell order is coming through.Government officials who monitor the smooth functioning of markets, and traders and investors who depend on it, note that slower connections have created lags leading to uncertainty — say, about whether a buy or sell order is coming through.
Traders typically have three to four screens they use to keep a constant eye on price changes, communications from trading partners and market data sources. But at home, most probably have a laptop and another monitor, so more toggling and clicking is required to nail down the maturity schedule of a bond or call up the daily trading volume on a stock.Traders typically have three to four screens they use to keep a constant eye on price changes, communications from trading partners and market data sources. But at home, most probably have a laptop and another monitor, so more toggling and clicking is required to nail down the maturity schedule of a bond or call up the daily trading volume on a stock.
Updated June 2, 2020
Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission.
Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home.
States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people.
Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.
Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.
If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)
More than 40 million people — the equivalent of 1 in 4 U.S. workers — have filed for unemployment benefits since the pandemic took hold. One in five who were working in February reported losing a job or being furloughed in March or the beginning of April, data from a Federal Reserve survey released on May 14 showed, and that pain was highly concentrated among low earners. Fully 39 percent of former workers living in a household earning $40,000 or less lost work, compared with 13 percent in those making more than $100,000, a Fed official said.
Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications.
The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing.
If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.
If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested.
The phone is another matter. Traders usually use a specialized telephone known as a “turret,” with preprogrammed keys to connect with important clients and trading partners. While there are electronic solutions that would allow traders to replicate their turrets online at home, many seem to have reverted to simply looking up numbers and using their cellphones to connect — another small but significant slowdown in communications.The phone is another matter. Traders usually use a specialized telephone known as a “turret,” with preprogrammed keys to connect with important clients and trading partners. While there are electronic solutions that would allow traders to replicate their turrets online at home, many seem to have reverted to simply looking up numbers and using their cellphones to connect — another small but significant slowdown in communications.
Jeff Warren, a Goldman Sachs banker who helped oversee the sale of $600 million in bonds on March 30 for the restaurant chain Yum Brands, found it much more onerous to deal with hundreds of investors from the attic of his mother-in-law’s home in Long Island than from the office. He said he joked to colleagues that while his Downtown Manhattan office has a phone turret that allows 600 calls to come through at once, he is barely able to patch together two lines on a desk phone while working remotely.Jeff Warren, a Goldman Sachs banker who helped oversee the sale of $600 million in bonds on March 30 for the restaurant chain Yum Brands, found it much more onerous to deal with hundreds of investors from the attic of his mother-in-law’s home in Long Island than from the office. He said he joked to colleagues that while his Downtown Manhattan office has a phone turret that allows 600 calls to come through at once, he is barely able to patch together two lines on a desk phone while working remotely.
The coronavirus outbreak threw a wrench into the continuity planning that many Wall Street companies had put in place since at least the Sept. 11 terrorist attacks. Those plans were largely built around the idea that if trading at a bank headquarters was knocked off-line, groups of traders would decamp to satellite trading floors outside the radius of whatever disaster had befallen New York. But those plans quickly became unworkable, given the dangers of infections from coronavirus for virtually all office work that puts people close to one another.The coronavirus outbreak threw a wrench into the continuity planning that many Wall Street companies had put in place since at least the Sept. 11 terrorist attacks. Those plans were largely built around the idea that if trading at a bank headquarters was knocked off-line, groups of traders would decamp to satellite trading floors outside the radius of whatever disaster had befallen New York. But those plans quickly became unworkable, given the dangers of infections from coronavirus for virtually all office work that puts people close to one another.
“This is really not the disaster that they had planned for,” said Daniel Beunza, a business professor at the City University of London, who has studied and recently written a book on bank trading floor culture.“This is really not the disaster that they had planned for,” said Daniel Beunza, a business professor at the City University of London, who has studied and recently written a book on bank trading floor culture.
The trading floor at Driehaus Capital Management, a boutique investment manager, occupies the second floor of a 19th century mansion in Chicago. On a typical day, a handful of traders — with four screens apiece — scour the markets for entry and exit points on the stocks and bonds the portfolio managers have earmarked for buying or selling.The trading floor at Driehaus Capital Management, a boutique investment manager, occupies the second floor of a 19th century mansion in Chicago. On a typical day, a handful of traders — with four screens apiece — scour the markets for entry and exit points on the stocks and bonds the portfolio managers have earmarked for buying or selling.
Now, all of the firm’s traders are working from home but the disruption has not been significant, said Jason Vedder, director of trading. In recent years, Driehaus had bolstered its ability to allow traders to work from home for a number of reasons — not least the ability to stay home during Chicago’s awful winter weather.Now, all of the firm’s traders are working from home but the disruption has not been significant, said Jason Vedder, director of trading. In recent years, Driehaus had bolstered its ability to allow traders to work from home for a number of reasons — not least the ability to stay home during Chicago’s awful winter weather.
That’s not to say nothing has changed. Instead of hearing nonstop chatter, the firm’s traders have an open Zoom video meeting going throughout the day, allowing them to mimic the ease of in-person communication. They also connect to Bloomberg, where they chat with their counterparts at Wall Street banks and execute trades.That’s not to say nothing has changed. Instead of hearing nonstop chatter, the firm’s traders have an open Zoom video meeting going throughout the day, allowing them to mimic the ease of in-person communication. They also connect to Bloomberg, where they chat with their counterparts at Wall Street banks and execute trades.
Mr. Vedder himself works from a third-floor office next to his son’s room in his home on the city’s North Side. He has hard-wired his desktop to increase its speed, and a 150-foot cable spills out of his office and down the stairwell to the modem in the basement.Mr. Vedder himself works from a third-floor office next to his son’s room in his home on the city’s North Side. He has hard-wired his desktop to increase its speed, and a 150-foot cable spills out of his office and down the stairwell to the modem in the basement.