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Why do traders in investment banks feel their jobs are immune from AI, etc?

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Re: Why do traders in investment banks feel their jobs are immune from AI, etc?

#61

Earlier quoted context omitted.

I found my apartment online. Set up the meeting. Negotiated the documents and corrected them where necessary. The broker I paid 10% of my first year's rent? Apparently he bought a ticket to Paris the morning of our closing.

If you negotiated the documents yourselves, why were any broker involved ?

Most apartments in New York City have a broker involved somewhere. In this case, the building owner had a sell-side broker. A condition for renting the building was paying the building owner's fee, directly to the broker, and while simultaneously absolving the broker of any responsibility to me, the paying party, over the building owner, the technical client.

Re: Why do traders in investment banks feel their jobs are immune from AI, etc?

#64

Earlier quoted context omitted.

If you negotiated the documents yourselves, why were any broker involved ?

Most apartments in New York City have a broker involved somewhere. In this case, the building owner had a sell-side broker. A condition for renting the building was paying the building owner's fee, directly to the broker, and while simultaneously absolving the broker of any responsibility to me, the paying party, over the building owner, the technical client.

The whole NYC real estate brokers thing is completely fucked. The whole thing is a scam.

Re: Why do traders in investment banks feel their jobs are immune from AI, etc?

#65
post #2

Because investment bankers are just salespeople? Nobody is suggesting AI will replace salespeople in the near future. I could see there being fewer grunt analysts in the future, though.

> Nobody is suggesting AI will replace salespeople in the near future. They aren't? Because I see this happening all the time. Automated checkout lines, E-Trade and online brokerages, etc. Low-value transactions are handled more and more by electronic "salespeople". All it takes to reach high-value transactions as well is for the clientele to decide they trust machines more than humans, which is not all that unlikely…

I think that the term 'salespeople' here refer to those who proactively push their products to the market and by doing so widen the market for the company they represent.

The examples you give are indeed places where buying or selling happens, but where does the incentive to do these transactions come from? It's still from humans. Sure, we are bombarded left and right with ads that were carefully targeted for us by complex algorithms, but I don't think I've ever bought anything from Amazon without reading a review about the product from another user, or bought stock without going through several opinions written by more-or-less respected analysts.

Re: Why do traders in investment banks feel their jobs are immune from AI, etc?

#66
because traders are used to seeing such predictions fail.

Reuters was trading FX electronically since the early 1990s. At the tier one IB I worked for the IT budget was 500m USD a year (across products), and that was in 1997! Huge resources were thrown at automation. However, to this day, large trades in FX (> 10m USD notional) are still almost exclusively performed by humans over a telephone or over the bloomberg messaging system.

That's because, no matter how much you automate stuff, there is still the 1% "edge case" scenario where something goes wrong, and when that happens, you most definitely want a human that you can "look in the eye", when you have that sort of execution risk. Remember that markets move really fast and there is a lot of risk in big trades that "go wrong" because unwinding said trade will almost certainly cost one of the sides a fortune.

Also, high finance is not just about what you know. It's inevitably about who you know, about "illogical" factors such as salesperson charisma, entertainment, and most importantly, a credible personality type that understands the edge case risks. These things are very hard to replicate with a machine. You'll say they should be, that these things are unfair, but they remain a fact after many attempts at removing them have failed.

As for AI, let's for now call it what it is: machine learning. Learning from the past. That's fine for recognising stop signs at different distances, angles and degrees of noise. But in finance, the past is often misleading. Sure there's trend, but there are also very big instabilities in the historical correlation matrix. Paradigms shift without you even realising it. The constant is change. AI is not good enough at that, yet.

BTW, that's not to say machines are not making inroads. It's becoming almost impossible to get a decent trading job now with knowing at least R and Python to a comfortable degree, and good quant programmers cost a fortune. There's massive demand.

Re: Why do traders in investment banks feel their jobs are immune from AI, etc?

#67

Earlier quoted context omitted.

This is the classical hn bias. Normal people would like to talk to humans. Hn users would rather get info, plans, etc from houses and eventually buy them and sign the contract using a REST API with a node.js client..

That's a rational buyer...what do you think the bank does? They run the numbers to see if the person qualifies, has great credit, etc...do you think they care how your day is going? Lol...

[deleted]

Re: Why do traders in investment banks feel their jobs are immune from AI, etc?

#68

Earlier quoted context omitted.

This is the classical hn bias. Normal people would like to talk to humans. Hn users would rather get info, plans, etc from houses and eventually buy them and sign the contract using a REST API with a node.js client..

Exactly lots of people want the experience of the salesman in picking a house, information on the neighbours and what its like to leave there & why the previous person is getting rid of it. The HN bias is a bit like the salesman is the inefficient part disincentivized to help you and trying to rip you off.

The salesman is incentivized to screw you. They work on commission so the faster they can move houses, the better. Real estate agents are screwing both the buyer (feed you bullshit to get you to buy) and the seller (convince to back off of higher prices because the 0-15% difference in price isn't worth the weeks more effort on their commission).

Re: Why do traders in investment banks feel their jobs are immune from AI, etc?

#69

Earlier quoted context omitted.

This is the classical hn bias. Normal people would like to talk to humans. Hn users would rather get info, plans, etc from houses and eventually buy them and sign the contract using a REST API with a node.js client..

That's a rational buyer...what do you think the bank does? They run the numbers to see if the person qualifies, has great credit, etc...do you think they care how your day is going? Lol...

Of course they don't... But they are not the client... It's the client who needs honeyed words, and that an AI can't do..
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