What value do we create here?
astatespacetraveler.com
What value do we create here?
1–10 of 60 posts
Re: What value do we create here?
#2First of all, I disagree with the entire premise of the question. Why does the intelligent have an obligation to dedicate his or her life to the creation of maximal value for society? Sounds like Nietzsche's slave morality to me. Why does the attractive/tall/healthy not have a similar special moral obligation?
Second of all, providing liquidity is very important. Sure, you are only shaving off a few basis points, but multiply that by a few trillion and you are creating serious value. How much value does a silly time-wasting video game provide relative to the efficient allocation of the world's capital?
Finance is an extremely exciting field, where machine learning, econometrics, physics, and just about everything else converge. Imagine a world without car insurance, where startups cannot offer equity, where there are no IPOs. Finance facilitates co-operation, trade, and, yes it is cliche, but world peace. If you are interested, please don't let the media and finger-pointing politicians turn you away from this exciting line of work.
Re: What value do we create here?
#3[deleted]
Re: What value do we create here?
#4Not very well written. The point is unclear... I had to read xxzz's comment to really figure out what he meant (probably because to me as to xxzz, "increasing the liquidity of the secondary bonds market" doesn't sound like "worthless value" at all, so the main point of the article contradicts my sense of values).
I think the question "How do we add value?" is important, but only in the sense that it can help you figure out what are the key activities of the business, that you should be involved in. It can help focus you, basically.
Re: What value do we create here?
#5First of all, I disagree with the entire premise of the question. Why does the intelligent have an obligation to dedicate his or her life to the creation of maximal value for society? Sounds like Nietzsche's slave morality to me. Why does the attractive/tall/healthy not have a similar special moral obligation? Second of all, providing liquidity is very important. Sure, you are only shaving off a few basis points, but…
When you talk about creating serious value, you're not talking about value in general, but the value derived from the money supply. Not that there's anything dirty about money. But value can come from other places.
For some people, it's hard to escape the soul-sucking nature of working in finance. The super-high salaries are a kind of anti-filter: they attract people who really don't "love what they do." And eventually money isn't enough to keep such people working. That's why i-banking has such a high burnout rate.
Speaking of Nietzsche, I know someone who quit i-banking to teach philosophy, of all things.
Re: What value do we create here?
#6First of all, I disagree with the entire premise of the question. Why does the intelligent have an obligation to dedicate his or her life to the creation of maximal value for society? Sounds like Nietzsche's slave morality to me. Why does the attractive/tall/healthy not have a similar special moral obligation? Second of all, providing liquidity is very important. Sure, you are only shaving off a few basis points, but…
First of all, I disagree with the entire premise of the question. Why does the intelligent have an obligation to dedicate his or her life to the creation of maximal value for society? Sounds like Nietzsche's slave morality to me. Why does the attractive/tall/healthy not have a similar special moral obligation?
I might be projecting, but having hung out with Carter (the author) a few times while he spent this past summer out here in Palo Alto, I can probably assure you that it's just an un-stated assumption that's causing you guys to differ. The reason he's asking that question of "what value do you add?" is because it leads to personal fulfillment. Some people are personally fulfilled by shaving basis points. Hell, I could be one of them if not for the the lost forests of entry-level finance work.
Carter is talking to people that want to have huge impact on society. They dream to be Rockefellers, Jobs's, Brins, and so on. In those cases, it's always worth stepping back and thinking about what overall impact you're having. If all you're doing is shaving basis points you're probably not changing the nature of society.
And no, this doesn't rule out finance; J.P. Morgan diverted the vast holdings of Europe into the burgeoning economy of these United States (http://en.wikipedia.org/wiki/J._P._Morgan#Treasury_gold) during a crisis.
Re: What value do we create here?
#7First of all, I disagree with the entire premise of the question. Why does the intelligent have an obligation to dedicate his or her life to the creation of maximal value for society? Sounds like Nietzsche's slave morality to me. Why does the attractive/tall/healthy not have a similar special moral obligation? Second of all, providing liquidity is very important. Sure, you are only shaving off a few basis points, but…
The intelligent don't have an obligation to create maximal value. But if you're making money without creating value for society, then what you're doing is rent seeking and "cheating" people who do create value. http://en.wikipedia.org/wiki/Rent_seeking
I definitely agree that finance is an exciting field where a lot of interesting topics converge. However, the examples you give are way exaggerated. The full complexity of the modern financial system isn't really needed to facilitate trade/provide insurance/provide financing/whatever else. Those things don't go away if fewer people are trading inside spreads.
Yes, liquidity is important for a market. But it's not an end in and of itself. There is no value in liquidity. There's only value in what liquidity enables. It's like what Paul Graham always talks about, you have to make something people want. Liquidity is kind of like ball bearings. No one really wants ball bearings, but they're useful because of what they enable. Liquidity is the same way.
Edit: I'm also not suggesting that there's no value in making ball bearings or intermediate products, just that they are not the ultimate goal.
Re: What value do we create here?
#8First of all, I disagree with the entire premise of the question. Why does the intelligent have an obligation to dedicate his or her life to the creation of maximal value for society? Sounds like Nietzsche's slave morality to me. Why does the attractive/tall/healthy not have a similar special moral obligation? Second of all, providing liquidity is very important. Sure, you are only shaving off a few basis points, but…
The intelligent don't have an obligation to create maximal value. But if you're making money without creating value for society, then what you're doing is rent seeking and "cheating" people who do create value. http://en.wikipedia.org/wiki/Rent_seeking I definitely agree that finance is an exciting field where a lot of interesting topics converge. However, the examples you give are way exaggerated. The full complexit…
You're wrong about liquidity. By providing liquidity to a market you are providing immediacy to someone else. Market participants seeking immediacy place a specific value on it and are willing to pay someone for the privilege. As a market participant, if you want to buy or sell at the market, you're directly benefiting from the liquidity being provided by other participants.
Re: What value do we create here?
#9Earlier quoted context omitted.
The intelligent don't have an obligation to create maximal value. But if you're making money without creating value for society, then what you're doing is rent seeking and "cheating" people who do create value. http://en.wikipedia.org/wiki/Rent_seeking I definitely agree that finance is an exciting field where a lot of interesting topics converge. However, the examples you give are way exaggerated. The full complexit…
You're wrong about liquidity. By providing liquidity to a market you are providing immediacy to someone else. Market participants seeking immediacy place a specific value on it and are willing to pay someone for the privilege. As a market participant, if you want to buy or sell at the market, you're directly benefiting from the liquidity being provided by other participants.
Yes, but still no. By providing liquidity you can be directly benefiting someone else but you're still not directly creating value.
Liquidity, immediacy or anything else in the financial markets don't have any intrinsic value. The only reason the financial system exists at all is to facilitate the efficient allocation of resources towards the production of things that have real value.
Re: What value do we create here?
#10First of all, I disagree with the entire premise of the question. Why does the intelligent have an obligation to dedicate his or her life to the creation of maximal value for society? Sounds like Nietzsche's slave morality to me. Why does the attractive/tall/healthy not have a similar special moral obligation? Second of all, providing liquidity is very important. Sure, you are only shaving off a few basis points, but…
Considering how many people in the world are starving, ill, undereducated, and unemployed, I'd say we're doing a piss-poor job of 'efficiently allocating the world's capital'.