High-Frequency Programmers Revolt Over Pay 1018
An anonymous reader writes "Programmers who design and code algorithms for investment banking are unhappy with their salaries. Many of them receive a low 6-figure salary whereas their bosses — who manipulate these algorithms and execute the trades — often earn millions. One such anonymous programmer points out that he was paid $150,000 per year, whereas the software he wrote was generating $100,000 per day."
Bosses earn too much (Score:5, Insightful)
Re:Bosses earn too much (Score:5, Insightful)
Yeah, really. Six figures for a programming job is fantastic pretty much no matter how you slice it. If it seems like the guy who's making ten times that isn't contributing a commensurate amount over what you do, well, welcome to reality. Especially the reality of trading and finance.
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If they are making too much, they are sucking a lot of money out of the system.
Welcome to reality. Especially the reality of trading and finance.
If this blood-sucking is stopped on its tracks, the overall economy will be more efficient. Out with those fucking leaches!
Agreed, though honestly, good luck with that.
But that still leaves me with no sympathy for a programmer earning a mere six figures.
Re:Bosses earn too much (Score:5, Insightful)
No, they are not "sucking money out of the system". They are CIRCULATING money in the system.
Economics 101: Money has no intrinsic value. By itself, outside the financial system, it is pretty pieces of colored, printed paper. Inside the system, it is an agreement to exchange goods and services for other goods and services.
Assume that our uber-bloodsucker takes down a few million and buys a yacht. Guess what? He's paying the salaries for the people who build that yacht, the people who maintain it, the people who crew it, the people who run the marinas. All of them are now working, doing things they (typically) enjoy more than digging ditches on a road crew somewhere, and putting food on THEIR tables.
Say he takes a vacation trip to, oh, say, Rio. He's paying the salaries for the guys at Boeing, who built the airplane. He's paying the salaries for the ramp rats at JFK. He's paying the salaries for the guys at the oil company who refined the fuel for the airplane. All of them continue to work and put food on their tables.
They get the big bucks, compared to the Java weenies you see immortalized in thedailywtf.com, because they generate high returns for their employers. Their employers, in turn, get bigger bucks for taking bigger risks than the programmers do. All of them cause money to CIRCULATE in the economy, in the never-ending exchanges of goods and services.
If you don't like it that someone else is making more money than you are, well, maybe you should have taken the tougher classes in school.
Also note: part of the price for being a high-frequency programmer is generally living and working in New York City. It ain't all roses.
Re: (Score:3, Insightful)
Yeah, but in the end HE is still the one riding on the yacht and taking trips to Rio. While the deckhands are likely paid a pittance for a similar amount of work.
Re:Bosses earn too much (Score:5, Insightful)
Of course, it can also mean a factory shuts down, and moves production to a country with fewer human rights protections, promoting slavery, but really who minds the little details.
Re:Bosses earn too much (Score:5, Insightful)
Re:Bosses earn too much (Score:5, Insightful)
No, they'll probably transfer most of it to fiscal havens, helping to fund drug lords and terrorists.
Have you heard about the Broken Window Fallacy? If these guys get money for nothing and recirculate it, the overall economy in the end gains nothing. The money that passes though these guys could have been used to produce useful goods and services instead of feeding the pleasures of fat greedy pigs.
Re:Bosses earn too much (Score:4, Insightful)
Name me a civilised country where there are no taxes. Nobody likes to pay them, but the truth is this: Societies have administrative costs. These costs have to be financed. So, these costs are financed by taxing the incomes of those who live in those societies and benefit from it. The Scandinavian countries are the ones with the best standard of living, however, taxation there is very high.
If you feel your money is not being well spent, be a useful member of society and get involved in defining the policies that govern where the money goes. Sitting on your ass whining about how "taxes are stealing" is useless and childish.
If you really don't want to pay taxes you might as well move to Somalia. They have no government, hence no taxes. But I guess you'll end up paying "protection" money to some local warlord.
Re:Bosses earn too much (Score:5, Insightful)
The problem with this free market fantasy is that its not actually reflective of what reality nor does it come up with an ideal productivity.
Lets take the 100k/day guy. He makes 3.65 million a year. He's only going to buy 1 yacht with that because he only needs one at a time. Maybe that costs 1M, the rest goes in the bank or into derivatives trading or currency trading or into his bath tub so he can bathe in it. This is all financial masturbation, it doesn't really produce anything. So saying that making that much money ends up circulating it a fallacy because it only ends up circulating amongst the other financial types and not the economy as a whole.
"But he did end up paying for the boat" you say, "he employed all those people". OK, but lets compare that to what would happen otherwise. Making the yacht gives a few artisans a fairly decent amount of income once in a year. If you take that 3 million and give it to 10k poor or middle class people (in the form of salary for actual work done), they will spend *all* of it. Why? Because they are not flush with cash and have lots of things they could buy including things they have been needing but have been putting off buying because they didn't have the cash. So you have circulated a lot more money to a lot more people, and since the money is going into buying things that are useful to more people (as opposed to yachts) the business that flourish are the ones that actually mean something to society and the economy. And you get bonus points for actually making more stuff that has more value.
Those people making all the goods also end up buying things to make the goods, so there is a multiplier effect happening. Now you have can compare a smaller base ($1M vs $3.65M) and a smaller multiplier (yachts need wood, paint, canvas and a small number of other parts vs the wide variety of other things that people would buy with the money such as cars, TVs mobile phones, college text books, groceries etc which are lower margin items that require a lot more investment into their production ) and you end up contributing a LOT less to the GDP as Mr. $3.65M than you do if that money was more evenly distributed.
Not to mention the fact that there is no way that guy deserves to get 100 times the pay. He's not 100 X smarter nor is he 100 X more hard working. Given the recent financial troubles it is rather easy to argue for the reverse. So now you are rewarding the wrong person a disproportionate amount in a way that hurts the economy relative to doing it the right way.
Congrats.
People really ought to stop thinking that they are going to become rich one day. It skews their perception of whats happening in the real world and makes applaud the people who are taking advantage of them.
the Big Apple bites (Score:4, Insightful)
Your Econ-101 course would have been improved by including a copy of Animal Farm. In the lost epilogue, the pigs mint coinage to invest German efficiency into everything they were doing already.
The principle you seem to be ranting on here is that voluntary transactions create wealth, no matter how the transaction is instrumented (coins, jars of pebbles, jiggling twins).
Monopoly is the word we use to describe the situation where voluntary rubs noses with indentured servitude. If there's only one place to purchase food, well, no-one is forcing you to chose survival.
In high speed computing one tends to compute bisection bandwidth: given any way of partitioning the system, what is the maximum bandwidth across the partition boundaries.
The concept of monopoly is similarly fungible. The banking industry has sliced up the economic system so that one partition (the high velocity insiders) have access to first-mover advantage, and everyone else doesn't. One term in what constitutes voluntary trade has been supremely tilted in favour of a group that isn't working nearly as hard as they ought to relative to the resources they command, even if it does, as you point out, greatly enrich Columbian farmers who would otherwise have to grow vegetables.
If the glorious concentration of wealth directed equated to aggregate productivity, Russia would be a model economy.
I will say your recitation of why money in and of itself can't be blamed was superbly rendered.
On the other hand, somehow you didn't manage to notice that typing the query "apple suicide" into Google no longer brings up a fairy tale: it brings up Foxccon in the "I feel lucky" position.
Re:Bosses earn too much (Score:4, Insightful)
Broken window fallacy implies lack of choice and/or value in loss.
Thanks for demonstrating so clearly why people so easily fall for the broken window fallacy. Even if you know what it is about, it is useless if you aren't able to see the loss.
In the original broken window fallacy, the loss was the time and resources the window maker had to spend, building a window for the shopkeeper, instead of building something more productive for him.
In the above case, the loss was the time and resources the boat builders had to spend, building a yacht for the leech instead of building something more productive for the original owners of the money before they were leeched.
Re: (Score:3, Insightful)
I disagree. Programmers are a lot easier to find than people willing and able to lead/run a successful financial firm. And it takes more programmers. The problem is that people want the big bucks without the big risks. And since experience is the best (and often harshest) teacher, these guys going off on their own guarantees an education. I'll bet that many of them will go back to their $150k per year jobs after they realize how hard and risky it is to run a business like that.
Re:Bosses earn too much (Score:5, Insightful)
Can you quantify what "big risks" are involved in running a successful financial firm? That's something I hear a lot, but I've never actually seen a breakdown of what exactly is being risked by upper management vs, say, the programmers. Sure, if the business goes bust upper management loses their jobs, but then so do the programmers.
Re:Bosses earn too much (Score:4, Interesting)
"Sure, if the business goes bust upper management loses their jobs, but then so do the programmers."
And even then, management will have better compensation, if not golden parachutes.
Re: (Score:3, Insightful)
If you're the CEO of an international energy conglomerate, you might end up with a multi-million dollar payout, only a few million a year in salary, and a job in Siberia. Poor Tony.
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That seems about right. In this game, the investors are the only ones who "risk" anything. And ironically, they're also the ones with the least amount of power to decide how the money is managed.
Re:Bosses earn too much (Score:5, Insightful)
Heh. It isn't risky to run a Fortune 500 company. It doesn't matter how well or how poorly you do; you're guaranteed to make enough money to lead a rather lavish life several times over. Carly Fiorina seems to be doing just fine, despite having driven HP into a brick wall. Tony Hayward may not have much of a future with BP, but you'd better believe that he's already "got his life back." The only risk you run is having to wrestle with the demons you create when your actions destroy the lives of other people, and while I'm sure that's an absolutely miserable thing to have to do, it sure as hell beats being one of those other people whose life is, y'know, destroyed because somebody other than themselves fucked up.
If you're running a successful financial firm, "risk" simply doesn't exist for you, at a personal level. It's why so many financial firms so royally fucked up; the cost of failure is borne by your clients and your employees. All you need to do is go before a Congressional panel and say how very sorry you are.
Hell, you don't even need to say that.
Re:Bosses earn too much (Score:4, Insightful)
Show me a former CEO of a fortune 500 company who is living in the poor house today because he fucked up. Now divide that by how many former CEOs of fortune 500 companies out there never have to work again and have children and grandchildren who never have to work.
Big risks? (Score:4, Insightful)
The people who are investing their money are the only ones taking a risk. If the boss gets greedy and makes a few bad trades, they can kiss a nice chunk of their 401k goodbye. If he does a good job, he'll take 20% of the earnings for himself because he managed to find a couple of sucker programmers willing to write something to do all the work for him.
Re: (Score:3, Interesting)
Or, financial firm executives just overvalue the skills of other financial executives and managers because doing so is natural and self-validating.
If programmers were making the decisions on who to pay how much, programmers would probably get paid a lot more and non-programming managers and executives would get paid less. But, obviously, its going to be managers -- and particularly executives -- making t
Re:Bosses earn too much (Score:5, Insightful)
We're talking about Hedge Funds here, so their bosses are in fact ex-Traders, ex-Sales and ex-Analysts from big investment banks and such.
- The reason why they are the bosses of the hedge funds is that they had millions of dollars to start their hedge funds, business contacts to get extra founds at low cost and already potential customers lined up from their time with the big banks.
- The reason they made millions of dollars in the first place is because they got fat bonuses in their previous job.
- The reason they got their bonuses is because they were lucky: I work in the industry and I know what I see. Also, studies show that the best performing hedge funds in one year are less likelly to be in the top the following years - in other words, hedge funds are not consistent in their performance, which indicates that chance, not skill is what determines most of their it.
Keep in mind that, most of the money made in Investment Banking is of the rent-seeking variety, such as:
- Decieve your customers by creating and selling them strange, complex and expensive derivatives to protect them from a certain risk when they could get equivalent protections from buying cheap standard products from the market.
- Get yourself in the middle of a transaction and take a cut. The transaction would occur anyway if u weren't there but either it would be cheaper for the buyer or more profitable for the seller.
- Get 20x your core capital in cheap loans (thanks to low interest rates and an implicit government guarantee). Invest those 21x core-capital in safe, low return instruments (say, 5% yield bonds). At the end cash it, repay loan, post more than 100% returns on your core capital (since the 5% return was applied to the 20x loan + 1x core capital), pay traders big bonuses for their "skill".
Essentially Investment Banking (and Hedge Funds) are the posh version of the Car Mechanic: professionals in the business use their superior knowledge of how finance works to decieve the customers (which are not specialists in that domain) to think that what they really need to "fix the problem" is something a lot more expensive that what is actually needed.
This would be alright if it wasn't for the fact that some of their customers are the managers of things like pension funds which (mis)manage our money and "invest" it through those guys instead of doing the due dilligence themselves to figure out that the average return after comissions and costs of a hedge fund is lower than the return on major market indexes (which you can get cheaply via ETFs).
So:
- Guys that started working in an industry which is mostly parasitic got lucky and made millions in bonuses.
- They used those millions, plus the contacts they created while working in that industry to setup a company and make money directly from the suckers^H^H^H^H^H^H^Hcustomers instead of via bonuses.
- They setup systems (i.e. auto-trading) that allow them to insert themselves into and get a cut from other people's trades because their systems are faster reacting to the market than other traders since they're located next to the exchanges and react within milliseconds.
- Add to this that in many cases, after they left their big bank jobs their old employer lost money on their bets and had to be rescued by the state using our tax money.
There are plenty of bosses out there that one can respect for having real risks and clawed their way to success by creating companies that provided real products/services to their customers but these guys ain't it.
These guys are more like pimps that made enough from forcing junkies to prostitute themselves that they could afford to open a brothel.
Re:Bosses earn too much (Score:5, Insightful)
I'm a full-time, professional programmer, so don't get me wrong on this. Running a successful business is a lot of hard work and, frequently enough, some luck. Most of the people here claiming they could run a successful business have no clue what they are talking about. I've contemplated many times over the years of starting my own business, but it all comes down to steady income versus unsteady income and the hope of a bigger payout.
If you want the big bucks, start a business and make it successful. Then you can hire the grunts at whatever price you want to pay them. Until then, find a place to give you a paycheck and leave all the boring details about how the money gets collected to the "idiots".
Re: (Score:3, Funny)
Re: (Score:3, Interesting)
Re: (Score:3, Insightful)
People losing money over your bad programming isn't really a risk for yourself, the question is, would you be held liable in this case?
Yet...he agreed to it right? (Score:5, Insightful)
I mean, correct me if I'm wrong here, but the programmer in question agreed to the terms BEFORE he wrote the first line of code.
Shouldn't gripes like these come up before you begin working? Maybe this is part of the problem, non?
Re:Yet...he agreed to it right? (Score:5, Funny)
Maybe he was surprised it worked ;)
Re:Yet...he agreed to it right? (Score:5, Insightful)
It's been my experience that pay is not as negotiable as everyone thinks it is.
Re:Yet...he agreed to it right? (Score:5, Insightful)
It's been my experience that pay is not as negotiable as everyone thinks it is.
Yes and no. Simply going to your boss and demanding a raise likely won't get you anywhere.
However, going to your boss saying "company X made me an offer for $Y" (where $Y > $CURRENT_SALARY), then you have a greater chance of getting that raise (assuming they want to keep you onboard). It's a sad fact, but in this day in age it's pretty much what you have to do.
Accountability (Score:5, Interesting)
"One such anonymous programmer points out that he was paid $150,000 per year, whereas the software he wrote was generating $100,000 per day."
And if said software screws up and costs a few hundred million, or otherwise causes other "bad things" to happen, what's the accountability of the programmer or the manager?
Re:Accountability (Score:5, Interesting)
I know guys in that sector... What happens is, whoever they can pin it on gets fired immediately for cause (no unemployment), with the cause being gross incompetence. This, combined with his I.P, noncompete and nondisclosure agreements makes him unemployable in his sector (and possibly all of New York, which upholds such agreements for up to 5 years).
There's accountability. It's called "career death".
Re: (Score:3, Insightful)
And if said software screws up and costs a few hundred million, or otherwise causes other "bad things" to happen, what's the accountability of the programmer or the manager?
Nothing. CEO's wreck companies/cause damages all the time, and all that happens to them, personally/financially is NOTHING. Maybe they get fired and then receive a nice golden parachute. Why should it be any different for the programmers who are the architects of the entire groundwork allowing the company to exist in the first place?
I'd like that guys job. (Score:4, Interesting)
America (Score:5, Insightful)
Good news (Score:5, Insightful)
FTFA:
"Now some programmers feel used and are instigating a revolt.
They are doing so by striking out on their own or forming profit-sharing arrangements."
That's hardly "whining," in fact it's precisely what they ought to do.
The outstanding part is that Forbes is recognizing this. We all know that folks in IT are underpaid in many professions, but the proof is when people actually say "fuck you" and go work elsewhere. That will *force* salaries up to the real market rate. And when publications like Forbes notice this, it's harder for managers to pretend it's not happening.
Thank you, to the ladies and gentlemen who struck out on their own, and thank you to Forbes for noticing. Both of these will make life a little better for the rest of us.
A counterpoint to all of the hate (Score:5, Informative)
A counter-point to all of the hate.
a. The American Dream (tm) says that if you work hard, you will benefit in the end. High risk / effort jobs should pay well
b. I bet these guys signed some sort of non-compete contract. Let's say that you and your buddies are the golden boys of financial trading algorithms. I think that you should get pay increases if your company is doing well. A 20% pay increase would probably shut them up.
c. After actually scanning the article,
Computer jockeys setting up own shops in bids to make millions.
[...]
They are doing so by striking out on their own or forming profit-sharing arrangements. Jeffrey Gomberg, 32, worked for a trading firm that paid him a low-six-figure income after four years on the job. His trader colleagues, by contrast, made millions manipulating the algorithms he'd written.
[...]
The programmer's bosses offered him an office and a $45,000 raise, but he left instead. He found a partner, and together they began trading on their own. The programmer now pockets more than half of any profits his software generates. The programmer says he's making about the same money he did at the job he left. But at his old job he'd topped out in pay while now he says the sky's the limit.
“I'm on my way to making a ton,” he says
It seems that they did the right thing. Why are all of you complaining? They didn't like their job, they grew a pair of balls and went out on their own.
It's amazing what reading TFA can let you know.
Re: (Score:3, Informative)
I cannot speak for these guys, but where I work, software I write for the company stays with the company. If I were to leave and go out on my own, I would be violating the terms of my previous contract so in effect I would have to write my software again. I'd be very surprised if this weren't the case here as well.
Car analogy (Score:5, Insightful)
"Many of them receive a low 6-figure salary whereas their bosses — who manipulate these algorithms and execute the trades — often earn millions."
A Nascar Driver's pit crew recieve a low 5-figure salary while their bosses - who use the cars to win races - often earn millions.
I get why the programmers are disgruntled, the code they write makes a lot of money and they aren't getting a huge cut, but it seems like the algorithm the program is based on would be the most important aspect. Besides, $100,000 a year doesn't seem that bad to me.
Re:Car analogy (Score:4, Informative)
On the east coast, in a big city, that's not that much money.
-l
Re:Car analogy (Score:4, Insightful)
So how do the people in Harlem afford to live there?
Re:Car analogy (Score:4, Interesting)
Mostly, they live in apartments you wouldn't want to live in in neighborhoods you'd probably get shot in.
I spent a week in a hotel in Harlem for business about ten years ago. I'm not in a rush to go back.
Re: (Score:3, Insightful)
Or they could just move to a foreign country and live off $15.000 a year, have 30 vacation days, sick leave that doesn't interfere with that, seven hours of work per day, clean air, and efficient public transportation that doesn't require you to own a car and still be at work in half an hour.
But I guess they want their huge plasma screens and game consoles and three muscle cars and hookers and cocaine.
There's more to life than just money alone.
Re: (Score:3, Insightful)
well, there. i think you've found at least one line of distinction yourself.
"lower upper class" is NOT N missed paychecks away from financial ruin
"upper middle class" IS N missed paychecks away from financial ruin.
Good start?
Regards
That's the point (Score:3, Insightful)
Ripple effect (Score:5, Insightful)
None of them should be making any money (Score:5, Insightful)
Re:None of them should be making any money (Score:5, Insightful)
Indeed.
People shouldn't be allowed to own parts of a company for intervals of less than a month, at minimum. I'd make an analogy here, except there's nothing in society we let people buy and sell that fast, certainly not giant entities....I'd like to see someone try to buy a house and resell it ten milliseconds later. I'd like to see someone buy a can of soda and resell it ten millisecond later!
What happens on Wall Street is simply a fancy game of roulette. Which is fine, I've got nothing against gambling, except they're playing roulette with ownership of the economy, and the only place people can actually invest in the economy.
I was one of those programmers (Score:5, Interesting)
I was a programmer for one of the companies mentioned in TFA; you've heard of them. The algorithms they're talking about are not really developed by the programmers, they're typically invented by the phalanx of PhD mathematicians the company also employs; the programmer's job is to implement it in the most efficient way possible.
Day one I was handed a paper on Eigen-related trading, straight out of TeX and was told to implement it. I admit that I had to go to the bookstore at lunch just to figure out what some of the symbols were. What I had two weeks later was a working version in C++ that did the job; over the course of a few months I refactored and refactored it to run faster; no object copying (everything using references), bit shifting, you name it, I used it. The code was tight and ran fast; as far as I know it's still being used.
I see it more as being a waiter; you may be the "face" of the restaurant, delivering the meal, but your tips also go back to the cooks, busboys, etc. I helped out on another project where, to this day, I *still* don't get how it works, yet the code too runs fast and correctly, as far as I know.
It should also be noted that the pay might be good, but the life is horrible; if you're young and single it's definitely something to go for, but save your money because there will come a time when you just can't do 100 hour weeks, week after week after week for years and years.
The only memory I really have of my 20s and early 30s is the glow of a screen.
MOD PARENT UP (Score:3, Informative)
This guy, understandably AC, has insights as one of the participants.
Same Old Story (Score:3, Insightful)
Many years ago I created fancy condenser units. I could easily create four or five a day and they sold for 5K each. I was payed about $10. per hour and creating $25,000 in product each day.
My point being that our economic system is slanted in such a way that those that actually create are often not paid much at all whereas those that create nothing often are very well paid. That attitude is beginning to trigger some real negatives. The car mechanic or tradesman now often has little conscience and is likely to cheat and do poor work to whatever degree he can get away with it while charging huge rates for his efforts.
Re: Same Old Story (Score:4, Insightful)
The $25k pays for mining the ore, extracting the metals, drilling kilometres under the sea for the oil, polymerising it, designing the units, injection moulding and, yes, your job putting it all together. I'm guessing you didn't do all of that...but if you did, then yes, you should get a pay rise, or at least a funkier job title
The sound of the smallest violin in the world. (Score:4, Interesting)
Here we have a bunch of jerks whining about the 6-figure salaries they earn. I wish I were earning what these guys earn. If they have a problem they can go find a job elsewhere. Or do what everyone else has to do, rise through the ranks of the company and get promoted to the point where you're earning the kind of salary you want to see.
While I agree it's quite insane what some in management are earning they also have the responsibility of the entire company on their shoulders. I have a friend who's a programmer at a billion dollar firm that does business related with the stock market and the upper management is comprised of middle aged guys who's entire life is work. The majority are single or divorced and don't even have time for a girlfriend. But anyway, my point is that pay isn't based on what management is earning. It's based on your perceived value to the company. There are probably countless other programmers lined up behind these guys hoping to take their jobs. Not all are qualified but some are.
The whole point of having employees is so that they generate more income, directly or indirectly, than is expended on them. Otherwise, what's the point of keeping them employed? Again, it's rare that you're going to earn a lot more than you do now at the same job you're doing now. So the two best avenues to seeing your income increase is to get promoted or to start your own business.
Re:waaaaaaambulance (Score:5, Insightful)
RTFA. They are quitting and going somewhere else. The finance sector is going have to deal with this if they don't want to be massively outcompeted by their own ex-programmers.
Re:waaaaaaambulance (Score:5, Funny)
Re:waaaaaaambulance (Score:4, Funny)
+1 - Honesty?
Re: (Score:3, Insightful)
Don’t be absurd. Most model slashdotters just fly off half-cocked. Sometimes it seems like it’s asking too much that they even read the headlines correctly.
Re:waaaaaaambulance (Score:4, Insightful)
Let's see: financial giants, capable of spending hundreds of millions of dollars a year on the servers, all the coders, access to the markets, and not to mention *the assets they trade at a profit*... Vs the guys who made 150k a year and just quit to form a startup. Somehow I doubt they are too worried.
The only chance these guys stand is to basically create a "better" program they can then sell back to the banks. The problem is, the programs themselves are very simple (the simpler the better, speed is all-important) so it comes down to the equipment they use that dictates the revenue. Unless they come up with a more profitable model than "buy low, sell high" they are probably going to have to beg for their old jobs back before too long.
Re:waaaaaaambulance (Score:5, Insightful)
You seem to be mistaking a little bit of coding with the work that is actually being done.
The programmers in this article are not dumb fuck meth addicts building a website and writing a little bit of Flash or C++ or even guys with EE or CS majors, but rather tend to be Economic or Statistic PhDs from Northwestern, UC, and other major programs. From the article, Sergey Aleynikov, according to his LinkedIn pagelike, has at least a masters from Rutgers and likely a PhD.
The programmers are working with SAS and other powerful statistical software that on their own is easy enough to learn. But these programmers are applying what the learned in their PhD studies to create trading and marketing strategies and then create proof of the trading and marketing strategies. They are making their companies millions and get paid very little because "they are only programmers".
They have every right to not be particularly happy. The programmers, these economics PhDs, know their worth and it isn't 125k a year.
Also, there is an increasing tendency in American business culture to undervalue the PhD as a foreigner or nerd degree and require anyone who makes real money to have an MBA.
Re: (Score:3, Interesting)
To back this up, as a developer it irks me to no end when a manager comes up to me and asks me to write a program from a design he wrote on a paper napkin over lunch at the Burger King.
First off, with as much money as he makes...eat lunch at a real restaurant!!
Second, my response is that you're going to get a crappy program unless you give a real design, or I do the job you want me to automate long enough from me to actually understand it. I CAN'T AUTOMATE WHAT I DON'T UNDERSTAND!! Finished. End of story
Re: (Score:3, Informative)
Did you read the article? No, of course you didn't. That's what they're doing.
Re:Somebody call the waaaambulance (Score:5, Insightful)
That's the only way to get the superstars... I ALWAYS am the guy looking for the next job. Why? because asshole executives dont promote high skill tech people... they want to keep them where they are at. So I jump ship every 3-5 years to get my own promotion and pay raise. It is the way most sucessful people climb the ladder.
Honestly only a complete fool is loyal to the company. Because the company is never EVER loyal to you.
Re:Somebody call the waaaambulance (Score:5, Insightful)
I think that something really important to remember in all this is they live in NY. You pretty much have to divide their salary by half to get an equivalent salary anywhere else in the US.
Even with that in mind, I think the real problem isn't that the programmers should make more, it is that the traders should make LESS. Whining about not being able to take advantage of rigging the game to funnel money to yourself like your superiors do shouldn't get you any sympathy.
Re:Somebody call the waaaambulance (Score:5, Insightful)
These guys are not whining about the situation, they are actively taking measures to fix it.
Re:Somebody call the waaaambulance (Score:5, Insightful)
I think the real problem isn't that the programmers should make more, it is that the traders should make LESS
I don't know that I agree. I think this is a very subjective issue. The reality is, the amount of revenue derived partially from these programmers has absolutely nothing to do with what their compensation is or should be. By their rationale, every teller at a bank should have salaries commensurate with that bank's revenue, since they're an element in processing deposits/checks/payments/etc. Hell, the data center I run makes millions every hour, but I don't expect that I should make 7 or 8 figures because of it.
The lesson here is: negotiate well on the way in. Do your homework, find out what the job entails and what responsibilities/liabilities you will have and determine for yourself if the compensation being offered is worth it. Once you cut the deal, that's it. If you don't like it, you can do as the programmers in the article are doing, go somewhere else and try to negotiate a better deal. It ain't personal, it's business.
Re:Somebody call the waaaambulance (Score:4, Interesting)
I don't know that I agree. I think this is a very subjective issue. The reality is, the amount of revenue derived partially from these programmers has absolutely nothing to do with what their compensation is or should be. By their rationale, every teller at a bank should have salaries commensurate with that bank's revenue, since they're an element in processing deposits/checks/payments/etc. Hell, the data center I run makes millions every hour, but I don't expect that I should make 7 or 8 figures because of it.
If the Bank Tellers got some percentage of the money they made the bank by working on the counter that would be similar to the rationale proposed/suggested by the programmers. I suspect the the Bank Tellers often get paid more than they personally make for the bank. Also, if a teller decides to leave, the bank won't find it hard to find someone to replace them.
The programmers, on the other hand, are directly increasing the bank's profits by their actions, and if they all left it would be more difficult to replace them (though obviously not impossible!).
These programmers have done exactly the right thing by going it alone. Now they can make the big bucks off the back of their endeavours, but similarly risk making no bucks if it doesn't work. ...
This is just as it should be, and well done to them for making the first leap
Re:Somebody call the waaaambulance (Score:5, Insightful)
the real problem isn't that the programmers should make more, it is that the traders should make LESS.
Wow. I'm a total stranger, but can I decide what you make? On a whim? Seems you don't have a problem doing it for others.
Re: (Score:3, Interesting)
I worked for a Wall Street firm for a couple of years. My experience there is that the IT folks are overlooked as being an integral part of the success and failure of the company. For example, traders would be upset if their bonuses weren't equivalent to at least their annual salaries. Us IT folk, however, were lucky to see a bonus check that was equivalent to about twice our bi-weekly paychecks.
In my exit interview, I told the person straight up... we're the ones providing the traders with timely data a
Re:Somebody call the waaaambulance (Score:5, Insightful)
It annoys me like hell that people use this kind of arguments.
Maybe they are excellent programmers, but bad business men. It doesn't mean they deserve to have their blood sucked from them.
If you shift all the income from the workers to the managers, everybody will want to make business, and there'll be nobody left to do some work.
Re:Somebody call the waaaambulance (Score:5, Insightful)
Re:Somebody call the waaaambulance (Score:4, Insightful)
Where I live, I make the equivalent of USD 29.000 a year. It looks low, but it's really not bad around here. I have no idea how it is in New York, though. Maybe for a NY standard I'm below the poverty line.
But if the programmer makes N and his boss makes 10 times that by adding very little value, yes, the programmer is being blood-sucked.
Re: (Score:3, Insightful)
Re:Somebody call the waaaambulance (Score:5, Interesting)
Well, for starters, consider the knowledge such programmers need to have in order to write this software:
* financial systems
* frequency trading
* surpassing existing frequency trading
* high speed interconnects and the understanding of both mathematical programming and SMP utilization
* intimate knowledge of "intelligent systems" and how to improve them using predictive math.
* the ability to solve complex problems and adapt to the changing landscape, quickly, due to the rate of change in the ecosystem
In short, we're not talking about bread and butter programming - this kind of stuff is likely much more difficult than any game programming out there, likely on par with game engine development in many ways. It's not easy, and slouches won't cut it.
Not only that, but they're living in New York. I can live relatively comfortably on less than a third of what it'd take for me to "scrape by" in NY (note, I'm married with children, so I'm not your stereotypical geek): if it's not the high cost of living, it's the taxes on "not welfare receivers" and the constant fees for things like parking, vehicle registration, utilities, etc. A construction worker in NYC makes as much as $80k a year, for crying out loud (slightly over twice what I'm making).
Even if renting a 2-bedroom "Economy" apartment in NYC, I'd likely end up spending more than my entire current salary - just on rent. That place is expensive. Similarly, I'm sure there's someone in Sudan or Somolia or wherever is pissed that those wingers in the US make $7.25/hour (or whatever minimum wage is now) to do food service. What extravagance! That must be why they hate us.
That said, everything about frequency trading makes me ill. I'd be really happy if the so-called traders just fired them all, and the so-called "industry" went tits up. They are using the rough equivalent of ad-clicking bots.
Re:Somebody call the waaaambulance (Score:4, Insightful)
Re:Somebody call the waaaambulance (Score:4, Interesting)
http://www.npr.org/templates/story/story.php?storyId=127747626 [npr.org]
JOFFE-WALT: This is Steve Rubinow with the New York Stock Exchange, and he says if you want to sell something, you want to buy something, those high-frequency computer are there to sell and buy from you.
Mr. RUBINOW: Which makes for a fairer market for all participants, both the people that are up to their necks in it, and people like you and me as retail customers. Those prices are about as fair as they can be.
JOFFE-WALT: No way, says Kevin Cronin. He works for Invesco. And Cronin is more like what you think of as a regular investor - manages big pension funds and mutual funds. And he says high-frequency computers watch what he does. When he starts to buy, the computers swoop in and start to buy as well, and then sell at a higher price minutes, sometimes even seconds later.
Mr. KEVIN CRONIN (Director, Invesco Global Equity Trading): They dont care about the stocks. All they care about is jumping in front of us and making a penny or two, and doing that millions of times a day.
JOFFE-WALT: That seems annoying to you. But why is that...
Mr. CRONIN: Of course it's annoying.
JOFFE-WALT: Oh, but why is that wrong?
Mr. CRONIN: What are they doing to provide anything in the marketplace other than trying to take the information that our orders give and try to profit themselves?
JOFFE-WALT: Now, high-frequency traders counter that anyone can pay to get access to that information and that speed.
Re:Somebody call the waaaambulance (Score:5, Interesting)
I used to write stockmarket software for a global supplier. Nice stuff, through this software ran billions a day, direct feed to the stockmarket-floor.
Now I work as a consultant for a consultancy firm, to get this contract they had a "fixed entermediate consultancy firm", who took 10% profit on my price just to put me into the company. (under their labels and what not)
So I filled in timesheets for my employers, the intermediate party and for the client. It wasn't very clear why I was filling in timesheets for the client as well, but it turned out my work was billed to their clients billing my work per hour with a factor of 2.5 on my price because they could.
This effectively resulted in me working hard, virtually for free, and generating profit for 4 companies (employer, intermediator, client, clients' client) while my pay was insulting for the work I've put out (under 8% of the cash my work generated).
If you want to keep your devs productive and happy, you should spoil them a bit and they'll put out. But I know alot with the same sentiments and effectively migrating to management hoping they'll make their big bucks, often resulting in incompetent management.
Re:Somebody call the waaaambulance (Score:4, Insightful)
But I know alot with the same sentiments and effectively migrating to management hoping they'll make their big bucks, often resulting in incompetent management.
Yeah, I know this perfectly. In my country, if you're not a manager by 30, you're a loser. That results in a lot of people moving into management that shouldn't be there, and would be useful doing other things.
Also, companies treat engineers like shit and then complain they can't employ good engineers. There aren't any. They're all too busy being bad managers.
Re:Somebody call the waaaambulance (Score:5, Interesting)
Re: (Score:3, Insightful)
And you really think the colleagues using the software were footing the bill? Bullshit. It's about time developers stood up and demanded compensation for their inventions instead of letting idiot stock traders reap the rewards by pushing a few buttons.
Re:Somebody call the waaaambulance (Score:5, Insightful)
And you really think the colleagues using the software were footing the bill? Bullshit. It's about time developers stood up and demanded compensation for their inventions instead of letting idiot stock traders reap the rewards by pushing a few buttons.
The stock traders make what they do because they know what buttons to push and when. If they push the wrong button at the wrong time, they stand to lose millions for their clients and themselves. These programs have no idea as to when to buy, sell or hold. All they do is retrieve data and analyze it into reports. It's up to the trader to know what to do with it.
If being an "idiot stock trader" who makes millions is so easy, why aren't you doing it? You can push a few buttons, right?
Re: (Score:3, Insightful)
The stock traders make what they do because they know what buttons to push and when.
No, they make so much money because they control money. People who control lots of money always make lots of money. They can make sure of that.
Re: (Score:3, Informative)
I don't know what he's complaining about. The programmer in question is making more money in one year than most people in my county see at once in several (I say most, there are those who make 6- and even 7-figure salaries around here, though I do believe it is a minority that does so).
Re:it depends on where the value is (Score:5, Insightful)
Re: (Score:3, Insightful)
I agree here. Does the algorithm do everything on its own and the programmer's bosses have no input? I'll bet the software is a very small piece of the money-making picture. Was the programmer provided with any resources to write that algorithm? Could the programmer write the algorithm on his own, freelance style, and sell it to the company? I doubt it. Maybe these programmers deserve a raise, and the bosses probably get paid too much, but this is a one-sided story
I doubt someone gave the programmer a ta
Re: (Score:3, Interesting)
"He deserves no more than he agreed to when he started employment."
Only if:
* He was a properly informed agent when he entered the deal
* Environment for the agreement hasn't changed
"You can't complain about a salary that YOU agreed to."
Of course you can (you always can do it). You can even *ethically* do it if you were tricked into an unballanced deal.
Re: (Score:3, Insightful)
they point out that they get paid only $60,000 a year, whereas the coal
Fixed it for ya.
Re:Coal miners are unhappy with their salaries... (Score:5, Interesting)
$60000??
My brother in law drives a coal truck and is on $140000 a year for four days a week work (12 hour shifts).
His meals and accommodation are paid for and he's flown there and home once a fortnight.
Not bad for someone who would be regarded as white trash by most (uneducated, four kids didn't, finish high school and yet earns more then most college graduates)...
I'm starting to think in my old age that Uni / College is for the most part the 21st century version of indentured servitude.
Re:Right... (Score:5, Insightful)
Algorithmic trading is not effective if you have to pay commission on your trades. Their software only works if it's used by a corporation with
1) network connections to stock exchanges
2) seats on those exchanges, which allows stock to be traded directly instead of through a broker
Re:Simple solution. (Score:5, Funny)
Erm.... my options are quit or quit?
What about quietly undermining the organization while biding your time looking for opportunities?
Re:Simple solution. (Score:5, Funny)
Re:Simple solution. (Score:5, Informative)
Strangely enough, that's what the article is about. A whole bunch of programmers asking for more money, being told they can't have it, then quitting and setting up competing businesses that are outperforming the first set.
Re:Simple solution. (Score:5, Funny)
Re:Simple solution. (Score:4, Interesting)
Now their only downside is that they didn't have the capital that their previous employer did, and therefore couldn't scale their operation immediately to make $2M profit, however they still did quite well for themselves and things kept growing.
In the case of the HFT programmers, what's to stop them from pulling off a malicious "Office Space" tactic (as mentioned below)?
Re:Simple solution. (Score:5, Funny)
Option Three:
Write a subroutine that takes the fractions of cents usually rounded off and tallied up later, and deposit them into an account of your own. Then sit back as the money trickles into your account. What could possibly go wrong?
Re:Simple solution. (Score:4, Insightful)
Of course one may want to make sure they have another job before quitting...or "not as much money as I want" could easily turn into "no money at all."
Re:Simple solution. (Score:4, Interesting)
It says everything I need to know about Slashdot that nobody has said this yet.
Re: (Score:3, Interesting)
We have a winner!
If you're already at the point where you'd be fine with quitting, consider organizing a union instead. Worst that can happen is that they can look for some excuse to fire you (in violation of a bunch of federal and state labor laws), and you were planning on leaving anyways. Now, I know that this goes against a lot of folk's libertarian ideals, but unions can dramatically improve the working environment for their members.
The other factor here is that when programmers complain a lot about sa
Re: (Score:3, Insightful)
If he's in New York City - which is very likely - 150k a year isn't exactly champagne wishes and caviar dreams.
Re:Boo Effin Hoo (Score:4, Interesting)
And it ain't exactly the poor house either. People have this idea that things are so expensive in the big cities (New York, Chicago, San Francisco, etc.) but that really only applies to housing. $150k in New York is probably matched by $80-100k elsewhere in the states.