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The mystique of Goldman Sachs

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Re: The mystique of Goldman Sachs

#31

Post by _wc0m »

jbob2000 wrote: post #6
StClaire wrote: post #4

One thing HN might care about: 3 years ago, 25% of Goldman employees worked in the IT division. They probably had more developers than Facebook and LinkedIn combined. http://www.businessinsider.com/goldman-sachs-has-more-engine...

It's disgusting to me that that much brainpower was/is dedicated to stock trading. All that programming and the only thing we get for it is that we can correctly value a company.

I'll be the unfashionable person that agrees with you, then.

Most developers (workers in general) at worst are merely pointless. I think you could easily make the argument that working in banking (/oil/marketing/think tanks/...) is actively harmful and that the smarter you are, the more damage you can do.

There is no iron law that says that just because you turn up on time, work hard and internalize your organization's goals, that the world wouldn't be a better place if you had just stayed in bed.

Re: The mystique of Goldman Sachs

#32

Post by SegFaultx64 »

branchless wrote: post #19

If the market is so efficient why are so many people working in it? The answer is it's parasitic. They don't allocate capital efficiently, progress has slowed dramatically in the west and a culture of rent seeking has taken over. It's a huge misallocation of resources but of course people simply point to the fact that they are "making money" as a sign of success. And yes, they are indeed "making money". That is the p…

Market efficiency and the number of humans involved are unrelated.

When people talk about market efficiency they are talking about the markets ability to quickly allocate capital where it is needed at a "fair" price.

I think the comments about the industry being largely parasitic are generally correct. They real issue is that if there is a 100 billion dollar transaction taking place and you can make that happen 1% more efficiently any fee you charge up to a billion dollars is a "good deal" from a purely economic standpoint. That is unless someone is able or willing to deliver that same gain for less fee.

That is exactly the arms race that has so inflated the sector.

Re: The mystique of Goldman Sachs

#34

Post by ForHackernews »

StClaire wrote: post #4

One thing HN might care about: 3 years ago, 25% of Goldman employees worked in the IT division. They probably had more developers than Facebook and LinkedIn combined. http://www.businessinsider.com/goldman-sachs-has-more-engine...

And they likely get paid peanuts compared to the front office.

Re: The mystique of Goldman Sachs

#35

Post by minipci1321 »

pc86 wrote: post #23
minipci1321 wrote: post #21

Earlier quoted context omitted.

Then you might get a food for thought from reading the recent thread of comments of Google employees (about what they dislike about Google). This is not to cast a shade on Google, but more to get some insight about how the brainpower may actually be spent.

Link?

https://www.quora.com/What-are-the-negatives-in-working-in-a...

Re: The mystique of Goldman Sachs

#36

Post by exstudent2 »

branchless wrote: post #19

If the market is so efficient why are so many people working in it? The answer is it's parasitic. They don't allocate capital efficiently, progress has slowed dramatically in the west and a culture of rent seeking has taken over. It's a huge misallocation of resources but of course people simply point to the fact that they are "making money" as a sign of success. And yes, they are indeed "making money". That is the p…

> It's a huge misallocation of resources

These resources are self "allocated". No one was forced or coerced into joining Goldman Sachs. Did you ever think that maybe those people enjoy their job? Or that Goldman Sachs isn't the net negative harbinger of the apocalypse you claim it to be? One could even argue that the success of "the west" is due to availability of capital, of which GS has played a role.

Re: The mystique of Goldman Sachs

#37

Post by BatFastard »

branchless wrote: post #19

If the market is so efficient why are so many people working in it? The answer is it's parasitic. They don't allocate capital efficiently, progress has slowed dramatically in the west and a culture of rent seeking has taken over. It's a huge misallocation of resources but of course people simply point to the fact that they are "making money" as a sign of success. And yes, they are indeed "making money". That is the p…

While I agree its parasitic, I dont think its the end of the world. Its more like they are taking all of the cream from the milk, and just delivering skim milk to consumers with out telling them. People notice the milk is different, but can't quite put a finger on it.

Its just part of the problem with income inequality.

Re: The mystique of Goldman Sachs

#38

Post by simonh »

NikolaeVarius wrote: post #9
jbob2000 wrote: post #6

Earlier quoted context omitted.

It's disgusting to me that that much brainpower was/is dedicated to stock trading. All that programming and the only thing we get for it is that we can correctly value a company.

Its insane that you think this is the case. The markets are an incredibly important part of the economy and this technology does not only simply value a company.

Though even if all it did was value companies, a 1% improvement in accuracy on the NYSE would correctly allocate $200 Billion dollars of miss-allocated capital to do more work for the economy. And that's just in the US. Globally it could route half a trillion dollars into more deserving companies, creating new jobs, services and products and pushing down unnecessarily high prices. This is why a well functioning finance industry is so vitally important.

Re: The mystique of Goldman Sachs

#39

Post by jbob2000 »

SegFaultx64 wrote: post #10
jbob2000 wrote: post #6

Earlier quoted context omitted.

It's disgusting to me that that much brainpower was/is dedicated to stock trading. All that programming and the only thing we get for it is that we can correctly value a company.

Not going to comment specifically on the judgement (I agree in general terms). However that is a vast mis-understanding of what a lot of the brain power at an investment bank goes towards. It isn't just equities it is fixed-income and economics as well. But beyond that it isn't just about valuation. It is everything from working on how to actually clear transactions, building dark pools and similar platforms, researc…

Right, but all of what they are doing is self-serving. They develop these things to give their client portfolios an edge over other investment firms. They aren't developing these technologies to apply them to healthcare or general science, it's just to give them an edge in the investment business.

For a company of their size and wealth, their open source contributions are paltry. A handy way to deal with arrays in Java? Wow, that's game changing...

Re: The mystique of Goldman Sachs

#40

Post by SegFaultx64 »

_wc0m wrote: post #31
jbob2000 wrote: post #6

Earlier quoted context omitted.

It's disgusting to me that that much brainpower was/is dedicated to stock trading. All that programming and the only thing we get for it is that we can correctly value a company.

I'll be the unfashionable person that agrees with you, then. Most developers (workers in general) at worst are merely pointless. I think you could easily make the argument that working in banking (/oil/marketing/think tanks/...) is actively harmful and that the smarter you are, the more damage you can do. There is no iron law that says that just because you turn up on time, work hard and internalize your organization…

I agree with a lot of this. Especially work around credit algorithms and alike is fraught with immoral (or at best amoral) choices.

The question is if it is more immoral than working on something like a self-driving car, that is going to yank jobs out from under a huge chunk of the population. I really don't know what the answer is.

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