How Wall Street went to work with the lights outNovember 1, 2012: 8:17 AM ET
With mass transit snarls and power outages in lower Manhattan, some finance workers went to great lengths to get the trades flowing again on Wednesday.
By Cyrus Sanati
FORTUNE -- Wall Street isn't going to let some pesky tropical storm get the best of it. After two days of closure, the markets reopened on Wednesday to solid, albeit, light, trading, with only a few technical glitches. Large equity orders that had stuffed up the pipes ran through the system relatively well considering the four-day-long break in trading. Treasuries and other fixed income products also made it through the gates relatively unscathed.
There was concern about Wall Street's ability to rise to the occasion yesterday -- not because of flooded servers (The NYSE has its computerized data hub some 30 miles to the west of the exchange floor); rather, it was out of concern that the traders, bankers, lawyers and analysts that run the machines simply wouldn't show up for work. While the vast majority of trades conducted on Wall Street are done by computers, humans are still needed to make the investment decisions that make the machines trade. At the same time, there are also a lot of trades conducted in the so-called "over-the-counter" market – like physical commodity trades or credit default swaps, that depend on bids and offers from real people.
Despite all the commotion over the blackouts, flooding and transit snarls, Wall Street showed up. But for those that couldn't physically be in the office for one reason or another, telecommuting was the name of the game. An equity analyst at Oppenheimer who lives across the river in Brooklyn told Fortune that he and his colleagues were all working from home this week because the firm's building in lower Manhattan was flooded. He said that he probably wouldn't be able to get back into the building until Tuesday next week, which is good for him as the subways should be running by then.
Meanwhile, across the Hudson River in New Jersey, some Wall Streeters found it impossible to get into work even when their buildings had power and sustained little damage. The head of equity research at a major asset manager told Fortune he was working from a Starbucks where they had free Wi-Fi and hot coffee. His usually hour-long train trip into Manhattan would have probably taken him two or three times as long if he drove as only two of the three major crossings into Manhattan from New Jersey were open. Nevertheless, he said he would look into carpooling or taking a bus to get into work on Thursday.
But for the vast majority of Wall Streeters, Wednesday was just another mandatory workday. If your building had power, you were expected to show up, especially if you were a junior employee. In Manhattan's hip downtown neighborhoods, scores of well-to-do financial professionals found themselves in a dilemma. They were close enough to work that they could walk, if need be, but they had no power, cellular service or hot water. Those trendy walk-up tenements that once housed New York's urban poor a century ago suddenly weren't cool anymore - they started to look more like haunted houses.
A young attorney tasked with defending one of the big banks in the ongoing Libor bank rate rigging case told Fortune he couldn't deal with the blackout and headed uptown to seek "civilization." He decided to bunk up dorm room style in a fancy midtown hotel with three of his young colleagues. There they found power for their iPads, cellular and internet service for their Blackberrys, and, of course, hot water for a shower.
Most workers with offices downtown in the Financial District were given a pass due to the power outages. But Goldman Sachs (GS), which has its headquarters in the low-lying neighborhood of Battery Park City, managed to somehow come out completely unscathed. The firm surrounded its tower at 200 West st with hundreds of sandbags that successfully kept water out of the building. It also seems to be one of the only buildings downtown with a generator powerful enough to provide full power – not just emergency power – to the entire skyscraper. This allowed the firm to stay open during the storm.
But coming into work really hurts with no mass transit. Many of Wall Street's finest heeded the call and ordered car service to whisk them from their Upper East and Upper West side abodes into Midtown Manhattan, where most of the big banks are located these days. That's how two sales traders made their way into the office Wednesday. They told Fortune they were going to simply bill the company for the service. They had to be at their desks early to broker deals to buy side firms in London and New York. Those firms have been chomping at the bit to buy and sell everything from credit default swaps to shares in Apple for days so there was big money to be made.
A portfolio manager at a large asset manager in London told Fortune all of his 30-some-odd US broker contacts were on their Bloomberg messenger chat programs on Wednesday ready to trade. Superstorm Sandy wasn't really discussed.
"One guy said his Mother's basement was flooded," he said. "There is no story here."
A more junior portfolio manager at the same firm noted that the European markets had been extremely "boring" on Monday and Tuesday with the U.S. markets closed. With the U.S. Treasury market out of commission, a lot of other markets linked to the critical benchmark, like many credit derivative products, simply couldn't move. He said he finally "got" why Wall Street was so important and how despite all the chest bumping he sees and hears in the City; London is nothing without New York.