Goldman Sachs automated trading replaces 600 traders with 200 engineers • Hacker News Board

Re: Goldman Sachs automated trading replaces 600 traders with 200 engineers

#31

Post by burkaman » Tue, Feb 07, 2017, 9:24 PM UTC

tomelders wrote: post #15

burkaman wrote: post #11

Earlier quoted context omitted.

Isn't this type of trading sort of unique in how easy it is to consume the data? Even in other investing areas, people who just "look at data and make decisions" cannot be easily replaced until computers can read and understand natural language and understand the state of the world. I can't immediately think of anything else this type of automation could apply to.

Not really. The world is data. Anything you need to know about the world is in a table somewhere, and the web has done a great job of making the planets data accessible to machines. Other areas may be more complex, but complexity isn't as big a barrier as it may seem. Also, those areas are probably not as complex as people think they are. I'm reminded of the AI that started making breakthroughs in oncology by looking…

> Anything you need to know about the world is in a table somewhere

No it isn't. If I read an article about the Volkswagen emissions scandal, what table do I look in to figure out how much consumers will care, and how aggressive various governments will be with their punishment? When Disney buys the rights to Star Wars, where should I look to see if it's worth what they paid for it? Should I rely on data from 30 year old movies, or look at merchandise sales or something? If I start seeing a lot of articles about climate change and the dangers of fossil fuels, should I sell my stock in Exxon?

Not that humans are particularly good at this stuff, but I don't think computers will be as good or better for a long time.

Re: Goldman Sachs automated trading replaces 600 traders with 200 engineers

#32

Post by zardo » Tue, Feb 07, 2017, 9:25 PM UTC

burkaman wrote: post #24

Retric wrote: post #12

Earlier quoted context omitted.

Computers are already making trades based on natural language articles. EX of some research from 2008: http://www.seas.upenn.edu/~cse400/CSE400_2007_2008/DavdaMitt... You see real world movement within seconds of the release of some public data. Which is far to soon for humans to read much of anything.

Absolutely, but isn't this type of software generally used to augment existing jobs, rather than replace them? The program can make basic inferences like "10 negative GE articles -> Sell GE stock", but you still need a human to make more general decisions about an industry as a whole, related companies, how long-term an issue is, etc. Basically, nobody's job is as simple as reading the news and deciding whether artic…

>Absolutely, but isn't this type of software generally used to augment existing jobs, rather than replace them?

Is there a difference? If a person does 10x as much you need 1/10th as many of them.

Re: Goldman Sachs automated trading replaces 600 traders with 200 engineers

#33

Post by roymurdock » Tue, Feb 07, 2017, 9:26 PM UTC

tomelders wrote: post #4

A agency that I once worked for was asked to create a presentation of the future of trading for a well known trading platform. It was the typical fluff around voice interfaces, augmented reality, VR and all that drivel. But we all knew what the future really meant - taking people out of the equation - but we also knew that the people paying for the presentation didn't want to hear that. When people talk about the ris…

> If your job is to look at data and make decisions based on that data, you're gonna be the first to go

Depends on the type of data, how it's collected, how it's aggregated, etc.

I'm a market researcher so I look at data all day. Thing is - I look at both qualitative and quantitative data from a ton of different sources (financial filings, surveys, macreoconomic organizations, vendor briefings, engineer interviews, etc.).

I size the markets for embedded technologies that are automating away data-driven jobs. Most notably in the industrial sector, where years of near-zero industrial productivity growth have left a lot of manufacturing/oil&gas/utilities companies hungry for any way to bring costs down.

The newest technology right now is the "IoT Cloud Platform" which aggregates data from a bunch of industrial machines (directly from devices, or through IP enabled gateways), routes the data, and sends it to a cloud where it can be analyzed and monitored automatically to predict failure and prevent unplanned downtime. From a component standpoint its made up of a (1) piece of client software that sits on the machine or gateway, or a configured agentless client, (2) infrastructure VMs for load balancing/server provisioning, (3) host VMs to run an OS, middleware, and a runtime framework, and (4) applications that run on top of the host VM.

One of the more interesting demos of this tech is a Microsoft/GE joint project that used drones to take pictures of power lines, sent that data to the Azure IoT Suite, which then performed visual analysis to determine which power lines were damaged or deteriorating, saving the cost of sending humans out to climb up these structures. All the big companies - Amazon, Microsoft, IBM, SAP, Oracle - are trying to add more intelligent applications on top of these platforms, with machine learning, neural nets, and blockchain-based applications being some of the most advanced.

If your job follows a simple binary data check or logical chain - is this machine functioning within specs (if not, order replacement), did we hit the target price for this asset (if so execute x number of orders), does this piece of equipment look functional (if not, report to manager) - sure you should be worried about your job.

If you go one step up from the basic logical workflow, and enter the realm of data synthesis, or of handling data that requires skepticism/critical thinking, I think you have no reason to worry about an algorithm doing your job anytime soon.

The financial sector in general is getting some of its excess fat trimmed due to a period of increased regulation and low interest rates/returns. This is a good spin for these finance companies, rather than "we're laying off 2/3rds of our cash equities trading desk".

Re: Goldman Sachs automated trading replaces 600 traders with 200 engineers

#34

Post by thavalai » Tue, Feb 07, 2017, 9:26 PM UTC

tomjen3 wrote: post #18

tomelders wrote: post #4

A agency that I once worked for was asked to create a presentation of the future of trading for a well known trading platform. It was the typical fluff around voice interfaces, augmented reality, VR and all that drivel. But we all knew what the future really meant - taking people out of the equation - but we also knew that the people paying for the presentation didn't want to hear that. When people talk about the ris…

No doubt. The last people to be replaced are going to be software devs (because when you can write a computer program with an AI you can make the AI write the AI and you have general AI), cleaning ladies and probably police investigators.

"But of your job is to look at data and make descisions based on that data, you're gonna be the first to go."

"The last people to be replaced are going to be software devs"

If your job is to write code so people can look at data and make decisions based on that data, you're gonna be the second to go.

Re: Goldman Sachs automated trading replaces 600 traders with 200 engineers

#35

Post by aabajian » Tue, Feb 07, 2017, 9:27 PM UTC

tomelders wrote: post #4

A agency that I once worked for was asked to create a presentation of the future of trading for a well known trading platform. It was the typical fluff around voice interfaces, augmented reality, VR and all that drivel. But we all knew what the future really meant - taking people out of the equation - but we also knew that the people paying for the presentation didn't want to hear that. When people talk about the ris…

>>But of your job is to look at data and make descisions based on that data, you're gonna be the first to go.

I posted the other day about machine learning and radiology. It's the type of job that squarely fits your definition, although things move much more solely in medicine.

Re: Goldman Sachs automated trading replaces 600 traders with 200 engineers

#36

Post by zardo » Tue, Feb 07, 2017, 9:28 PM UTC

tomjen3 wrote: post #18

tomelders wrote: post #4

A agency that I once worked for was asked to create a presentation of the future of trading for a well known trading platform. It was the typical fluff around voice interfaces, augmented reality, VR and all that drivel. But we all knew what the future really meant - taking people out of the equation - but we also knew that the people paying for the presentation didn't want to hear that. When people talk about the ris…

No doubt. The last people to be replaced are going to be software devs (because when you can write a computer program with an AI you can make the AI write the AI and you have general AI), cleaning ladies and probably police investigators.

The world's oldest profession will be the world's last profession.

Re: Goldman Sachs automated trading replaces 600 traders with 200 engineers

#37

Post by appleiigs » Tue, Feb 07, 2017, 9:32 PM UTC

cm2187 wrote: post #10

A lot of dope smoking in this article. There are a handful of markets that are large and liquid enough to fully move to electronic trading, like spot FX, vanilla interest rate swaps, perhaps treasuries trading. But most other markets are very much relationship driven. For instance a trader will make a market on illiquid bonds based on what he thinks is the appetite from the short list of potential buyers, and that's…

Your comment is spot on. The work Goldman Sachs does is relationship driven. As a corporate client of GS, I don't need data. I need advice.

Don't confuse the work that investment banks do with the work that NASDAQ does or with high-frequency trading.

In addition, the reason why GS has less traders and more developers is more to do with government regulations preventing GS from doing certain types of trading. Not because developers or AI is better. Dumb article.

Re: Goldman Sachs automated trading replaces 600 traders with 200 engineers

#38

Post by burkaman » Tue, Feb 07, 2017, 9:32 PM UTC

zardo wrote: post #32

burkaman wrote: post #24

Earlier quoted context omitted.

Absolutely, but isn't this type of software generally used to augment existing jobs, rather than replace them? The program can make basic inferences like "10 negative GE articles -> Sell GE stock", but you still need a human to make more general decisions about an industry as a whole, related companies, how long-term an issue is, etc. Basically, nobody's job is as simple as reading the news and deciding whether artic…

>Absolutely, but isn't this type of software generally used to augment existing jobs, rather than replace them? Is there a difference? If a person does 10x as much you need 1/10th as many of them.

But this is about responding faster, not responding more often. It helps you react to a story before everyone else, but there's only so many stories in a day.

Re: Goldman Sachs automated trading replaces 600 traders with 200 engineers

#39

Post by Scea91 » Tue, Feb 07, 2017, 9:34 PM UTC

zardo wrote: post #32

burkaman wrote: post #24

Earlier quoted context omitted.

Absolutely, but isn't this type of software generally used to augment existing jobs, rather than replace them? The program can make basic inferences like "10 negative GE articles -> Sell GE stock", but you still need a human to make more general decisions about an industry as a whole, related companies, how long-term an issue is, etc. Basically, nobody's job is as simple as reading the news and deciding whether artic…

>Absolutely, but isn't this type of software generally used to augment existing jobs, rather than replace them? Is there a difference? If a person does 10x as much you need 1/10th as many of them.

Or you can have 10× productivity.

Re: Goldman Sachs automated trading replaces 600 traders with 200 engineers

#40

Post by onion2k » Tue, Feb 07, 2017, 9:36 PM UTC

tomjen3 wrote: post #18

tomelders wrote: post #4

A agency that I once worked for was asked to create a presentation of the future of trading for a well known trading platform. It was the typical fluff around voice interfaces, augmented reality, VR and all that drivel. But we all knew what the future really meant - taking people out of the equation - but we also knew that the people paying for the presentation didn't want to hear that. When people talk about the ris…

No doubt. The last people to be replaced are going to be software devs (because when you can write a computer program with an AI you can make the AI write the AI and you have general AI), cleaning ladies and probably police investigators.

because when you can write a computer program with an AI you can make the AI write the AI and you have general AI

There doesn't need to be a single AI to create the entire app. An AI to model data structure, an AI to build an interface, an AI to consume external APIs, etc. We already mostly bolt libraries together to make software; it doesn't take a huge leap for those libraries to be generated by machine learning.

Building anything but the most complex apps will be trivial in 10 or 20 years time.