It’s not the best time to be a bond trader – that much is obvious. Liquidity in the market is lousy and new capital requirements are making trading less profitable. The fact that the Fed continues pumping money into the economy while keeping interest rates low hasn’t helped either. But no one knew it was this bad.
A new Bloomberg report on the current state of bond traders is downright depressing. It’s not just the numbers – bond trading is down a massive 22% over the last five years with liquidity plunging 70% – but also the people stories. Even big names with great resumes who can earn job offers find themselves back in the market in a matter of months.
Jon Bass, a former bond trader at Solomon Brothers, just landed his fifth job in five years, according to the report. He spent five months at Mizuho Securities, a year at defunct brokerage firm MF Global and less than two years at BTIG. Bass just took another job at Jefferies as a senior sales executive. Likewise, fixed income specialist Lee Fensterstock has had at least five jobs since leaving Jefferies in 2007.
And they may be the lucky ones. Headcount is down roughly 30% since 2010, with Credit Suisse, Deutsche Bank and UBS doing much the pruning. Compensation has followed. Pay fell anywhere from 25% to 50% during that period, depending on the job title. Compensation consultant Johnson Associates says that bonuses will be down as much as 15% this year.
Perhaps the most interesting part of the report is that the industry, understandably, is seeing no new blood. Twenty and thirty-year-olds are choosing other career paths, leaving the same old candidate pool for the same old jobs. Hence the slow-moving, rather depressing game of musical chairs.
