Traders Who Can't Code May Become Extinct, Goldman's Tech Pioneer Warns (bloomberg.com) 33
Just how important will the ability to write computer code be to a successful career on Wall Street? From a report: According to R. Martin Chavez, an architect of Goldman Sachs Group's effort to transform itself with technology, "It's like writing an English sentence." As Chavez prepares to leave the company, the onetime commodities staffer who rose to posts overseeing technology and ultimately trading is reflecting on his "26-year adventure" in the industry. "The short, short description of it is making money, capital and risk programmable," he said in a Bloomberg Television interview. "There are certainly many kinds of manual activities that computers are just better at."
Chavez, 55, outlined strengths that can help humans stay relevant, such as their relationship skills and ability to assess risks. Yet he predicted that longstanding career dichotomies on Wall Street, like trader versus engineer, will go away. To keep working, people will need both of those skills. Even money is going digital, a shift that goes far beyond cryptocurrencies, he said, pointing to the success of Stripe as an example of creating new ways to move funds. Stripe, for its part, has become one of the most valuable companies in Silicon Valley.
Chavez, 55, outlined strengths that can help humans stay relevant, such as their relationship skills and ability to assess risks. Yet he predicted that longstanding career dichotomies on Wall Street, like trader versus engineer, will go away. To keep working, people will need both of those skills. Even money is going digital, a shift that goes far beyond cryptocurrencies, he said, pointing to the success of Stripe as an example of creating new ways to move funds. Stripe, for its part, has become one of the most valuable companies in Silicon Valley.
"Things have changed since I first started", (Score:3)
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I don't understand why we still have MBA types around.
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true story, through the 1970s into the 80s, the Thai stock exchange took place on blackboards where people would write bid/ask numbers, and after posting a number wannatraders would t-t-t-tap-tap the board as loud as they could with the chalk to attract attention.
It's all about high speed trading (Score:1)
It's all about high speed trading and whose algorithm is smarter and faster than whose.
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High speed trading isn't just about coding, and a CS / programming degree is woefully insufficient. High speed trading requires knowledge and expertise right down to hardware.
Every instruction you can remove from your code. Every inch you can remove from the communications path. Every clock cycle you can take out of your program execution, is important.
It has gotten so fast that trading firms have built point to point radio links spanning hundreds of miles to get orders to make interoffice communcations fas
Re:It's all about high speed trading (Score:5, Insightful)
What an unbelievable waste of valuable resources. So many brilliant software, hardware and communication engineers across all of these firms, wasting their time turning rich people's money into more money instead of using those amazing skills to develop anything that would move the human race forward. Imagine what could be done with that talent if it were directed somewhere thats actually productive.
Re:It's all about high speed trading (Score:4, Insightful)
You could say that about basically anything, but you're right about financial arbitrage being the ultimate resource drain. Interesting problems, but they don't really move the world forward. You could argue that more efficient markets encourage investment, but I don't think most investors are actually turning their money piles into useful stuff...they're just making bigger piles faster. I'm a realist about the situation though...unless someone invents a Star Trek style replicator capable of producing anything on demand, and/or the value of human labor drops to zero, the financial system is going to continue with little change.
Then again, we also have half the world's Ph.Ds working at Google and Facebook figuring out ways to squeeze a few more clicks and interactions out of an impression, or trying to perfect the profile they've built on everyone to target their advertising even more.
Both finance and internet advertising are draining potential science talent away from math and science research simply because they pay much better. Getting a science Ph.D and going into academia is a lottery...if you're lucky and publish like crazy you'll get a tenured faculty position, but increasingly that's less likely.
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We could stop high speed trading by introducing a tiny delay to every transaction on the order of a second or so... it would eliminate the need for this at all.... or a small tax on each transaction maybe. I don't know but while I dont expect to eliminate the stock market in general this just seems like the absolute worst kind of thing for society and a real example of the inevitable conclusion of capitalism... maybe its possible to shape the market with a little regulation to keep it from becoming somethi
Could the whole system go extinct, please? (Score:4, Interesting)
Why do we still cling to ancient notions of "trading" as if we're still Bronze Age herders bartering hand-made tools? I was looking forward to a technology-driven leisure society of abundance so I could focus on reading obscure novels and talking to new people as I bike across the country.
Instead I am stuck in a mindless grind of office work designing next year's landfill.
Re:Could the whole system go extinct, please? (Score:4, Interesting)
Why do we still cling to ancient notions of "trading" as if we're still Bronze Age herders bartering hand-made tools? I was looking forward to a technology-driven leisure society of abundance so I could focus on reading obscure novels and talking to new people as I bike across the country.
Because the second that you arrived at this utopia, wherein everybody's needs are taken care of, you would start trying to get a leg up on the rest of the pack.
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Describe how this would happen, rationally. Explain to me what "leg up' I'd need or want in my "utopia". It's not really a utopia, we're almost here already compared to how we lived 200 years ago.
But just for fun, please define what this "leg up" actually means to you, then we can engage in a meaningful discussion.
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The roads would be clogged with the people most willing to suffer the crowding, and willing to sleep in their weirdest places with the least predictability. You'd have to find some way to get better resource access than those others, so you could bike across the country and meet new people, instead of spending all day trying to catch an opening in a lane, or find a place to sleep.
Anybody whose leisure activities take place outside the home would experience the same problem in your Utopia.
Imagine the busiest
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Ok so now you've explained what rich people believe will happen without boots firmly on our faces.
Labor day is a great example.. since most of us already have time off.
Sure the roads are crowded but if people got rid of their cars... which are expensive as hell to maintain and start to lose utility as a possession when you have more free time. Well those same roads could hold lots of bikes and I hope it pisses off anyone who feels the need to drive a car in utopia. You got a few free months go bike your
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LOL! I thought I'd seen it all, but here is a guy too poor to afford a clue.
The boot on your face is your own, but you'll never notice.
Utopia can exist. (Score:2)
A Utopia can exist. But it won't be for everyone. Once technology improves to the point that machines can provide utopia for the select few who control that technology, there will be no need for the rest of the people to exist.
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As was written in ancient Greece, as long as there are people who want to lay about on couches eating grapes, there must be war to fund it.
Technology reduces that differential. Less people fighting or suffering or whatever, more people laying about on couches.
DISCLAIMER: Written from my couch! Happy Friday, cube slaves! Oh, wait, your Friday isn't until next month. Attention all netslaves: Get Back To Work!
This is great (Score:1)
We take advice from criminals. Eh, I guess they would know.
It's a fair point (Score:2)
I work in the trading industry (as a statistician/quant), and I have to say it's been about 10 years since I last worked with a trader who could not code. And 20 years since I wanted to.
Split (Score:2)
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What he's really saying is that making decisions in the financial industry is going to require math in the future. High speed trading probably isn't even where computers are most used in finance. Determining risk, tracking performance, evaluating companies... all these things are better done with math (i.e. "code") than yesteryear's seat-of-the-pants-cigar-clenched-in-teeth screaming on a trading floor.
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That's the part I think he's thinking is going to change. You won't have a "trader" reading a bunch of reports and then deciding whether he believes them or not. You'll just execute the recommendations of the reports.
There's a lot of power in having the person who makes the decision also being the one who understands the data and how it was processed.
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Re: Split (Score:3)
"these things are better done with math (i.e. "code") than yesteryear's seat-of-the-pants-cigar-clenched-in-teeth screaming on a trading floor"
Any empirical evidence that markets run by algo trading are in some way "better" than markets run by human traders?
The classic justification for allowing the financial gambling industry to exist at all is that it provides superior allocation of capital, and therefore superior macroeconomic performance. Yet today, under the rule of our robot financial overlords, misin
Isn't it just automation taking these jobs too? (Score:2)
It's funny, because I figured banking and trading would be one of the last industries to remove the margin from their business processes. You still have freshly-minted Ivy League MBAs being given investment banking associate jobs as graduation presents, all of whom make crazy money compared to most entry-level jobs. This sounds like banks are trying to put more of a squeeze on costs by giving more of the entry level work over to algorithms and math...maybe they're reserving the high paying jobs for the trul
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It's funny, because I figured banking and trading would be one of the last industries to remove the margin from their business processes
I keep waiting for the app that puts all the insurance brokers out of business.
Or (Score:1)
Or you could always trade based on fundamentals and hold your securities for longer than it takes a hummingbird to fart.
Nope (Score:2)
Nope.
Computers will follow programmed Chinese walls. Traders will behave unethically / illegally whenever it suits them.
I call it "Digital Iliteracy". (Score:2)
It's everywhere and the severity is staggering. Right now I would compare someone who has no grasp on the difference between a client and a server and the difference between the Web and Google to someone who couldn't read a hundred years ago. You can get by, but only so far. And these people - I suspect - will be falling back fast now. As a webdev expert I get to talk to professionals every day and the amount of ignorance on fundamental concepts that web projekt owners bring to the table is totally baffling
Meh (Score:2)