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For the Love of Money

nytimes.com

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Re: For the Love of Money

#111

Post by nvarsj »

31reasons wrote: post #107
nvarsj wrote: post #101

Earlier quoted context omitted.

No, they're not. But that's the culture since the floor trading days. Even when most things are automated, traders still rake in huge bonuses. (Worked at a prop firm for 4 years).

Is there too much competition to be a trader or anyone can become one ? If so, its seems much better idea to toil away to make millions than toil away at a remote chance to make a million in a startup.

I think it's quite hard now. Lots of prop firms have closed down, regulation has increased significantly and is only getting worse. There's less easy money to be made. The majority of new traders are farmed from ivy league or top private engineering schools.

I've seen some people join as devs and swap into trading. Ironically in these cases they were terrible devs, but increased their salary several times by becoming traders.

Re: For the Love of Money

#112

Post by vinceguidry »

untog wrote: post #38
pbhjpbhj wrote: post #17

Earlier quoted context omitted.

Class in the UK is not solely about money. You can be upper class and living in a homeless hostel, doesn't happen much but possible. You can be working class and be a multi-millionaire. It's about heritage and social [inter]actions as much as it's about money. Class doesn't really feature in how much "better" you're perceived to be either. Some Lords are highly benevolent, clued in and useful members of society that…

I'm pretty sure that's what the OP was saying. That in the UK money and 'class' are separate, wheras in the US they are all bundled into one.

It's the same way in the States too. If you look, you can tell what background a rich or poor person came from. It's just that we don't look as much.

Re: For the Love of Money

#113

Post by vladimirralev »

mseebach wrote: post #68
vladimirralev wrote: post #61

Earlier quoted context omitted.

Don't you just transfer the risk to some other party this way? So that other party will now have to either have the bigger buffer or transfer it to someone else. At the end there will be no net effect on the larger scale. The cycle probably continues until somebody stupid enough to dismiss the risk buys into it at loss.

It's risk , not a certain loss. And you don't "transfer" it, you sell it to a party that wants higher risk (for a fee). Derivatives are nice, in that sometimes its possible to separate the risk out from the asset. Consider a $50k loan at 5% with a 1% risk of default. A pension fund and a hedge fund both have capital, but the pension fund have extremely conservative investors and the hedge fund have extremely risk hun…

That seems accurate, but it doesn't seem to account for the risk of the hedge fund going bust. It's a high risk fund so they either have the cash buffer we talked about or they transfer the risk to others. So the net effect is still null. The pension fund will be in much better position to take the 1% risk multiple times at sufficiently disconnected opportunities insuring each-other reducing the overall risk.

Re: For the Love of Money

#114

Post by 31reasons »

tikhonj wrote: post #109
31reasons wrote: post #83

I am just wondering, are these Wall Street traders smarter than an average techie working in Silicon Valley ? Are they so irreplaceable that they are offered so much salary and bonuses ? It just doesn't seem right. I am afraid to even ask for 150k salary in SV for the same amount of cerebral work.

My impression is that traders mainly have a much easier time quantifying their value. When you can say "look, I literally made $10,000 today and $8,000 yesterday", it's easy to negotiate for a significant chunk of that in compensation. Your leaving would have a very direct effect on the bottom line. As a software developer, the value you provide is not quantifiable like that. Everyone works on the product, sure, but…

So it seems you are better off working in a profession with a very clear quantifiable performance metrics. Software development is not one of them unless you work for your own company. I am curious about making a list of professions that have quantifiable performance metrics.

1.Sales and Marketing

2.SEO

3.Bloggers

4 ..

Re: For the Love of Money

#115

Post by mindcrime »

ItendToDisagree wrote: post #46
mindcrime wrote: post #28

Yay, more villifying "Wall Street" and fueling the "Wall Street vs. Main Street" fire, and suggesting that it's somehow noble or good to not want to be rich. I think everybody should want to be rich. I've tried poverty and in my opinion - it sucks. It sucks big, steaming donkey balls. The desire to make more money, to improve one's "lot in life" and to succeed, this is a Good Thing. Because a few assholes go too far…

As has been stated... The derivatives trading business was a prime culprit for the crash of 2008 so I think it is fair to say that some lying, cheating, stealing went on and the subsection of finance the author was involved in was complacent in it. Also being rich vs poor, and Wall St vs Main Street, are not the same thing by any stretch of the imagination. You can become rich without working in finance. And you can…

As has been stated... The derivatives trading business was a prime culprit for the crash of 2008 so I think it is fair to say that some lying, cheating, stealing went on and the subsection of finance the author was involved in was complacent in it.

Yes that's been stated, but I wouldn't say that it's been proven. There are a LOT of theories about what did and didn't happen as part of the 2008 financial crisis and in the run-up to it. For a take (from an insider) that may be a bit different from some of what has been said elsewhere, read John A. Allison's The Financial Crisis And The Free-Market Cure. Not saying Allison's take is 100% correct, but I just want to point out there are are certainly different points of view on that crisis.

I don't think that all the people who are pissed about the financial crisis are poor or that they think being poor is noble.

Fair enough. I didn't read TFA as being mainly about the 2008 crisis specifically, but that could be a mistake on my part. I do tend to generalize a bit as well.

I think the main issue the author is pointing out is how ignoble it is to be unhappy with a 2mil bonus for a job that really isn't that important in the big scheme of things. 2mil is a lot of money for the vast majority of people and bitching about it just makes you out to be an asshole.

I can (and do) agree that complaining about a $2MM bonus makes you something of an asshole, especially from some points-of-view. I think what bothers me about these articles is the implicit suggestion that "something ought to be done", which leads to the idea of more regulations, more laws, more rules, more restrictions, etc., which I believe - by and large - are counter-productive.

Again, see the John Allison book... if one buys his angle (and I mostly do), there's a strong argument there that it was government policy and the behaviour of government regulators, things dating back to the LBJ era, if not earlier, that ultimately led to the 2008 crisis. Anything that reads as an argument for more government involvement evokes something of a visceral reaction from me, since I am a proponent of laissez-faire.

It also frustrates me when I see people seemingly painting a picture of "wall street VS main street". I don't think that's accurate at all, and I think it's an unhealthy attitude. "Wall Street" and "Main Street" are just different views of the same system. The people of "main street" can certainly leverage capital markets to build wealth... you don't have to be a bigshot wall-street insider to do that. And, in fact, many pension funds, university endowments, etc., are heavily invested in "Wall Street" which means that many people ultimately do benefit from growth in the markets, even if they aren't day-trading or investing as individuals.

Of coure I'm not saying that everybody on Wall Street is perfect, or faultless or anything. I just think it would be better if everybody saw Wall Street as something they can take part in and benefit from, not as some mythical enemy.

Re: For the Love of Money

#116

Post by mindcrime »

gjm11 wrote: post #45
mindcrime wrote: post #28

Yay, more villifying "Wall Street" and fueling the "Wall Street vs. Main Street" fire, and suggesting that it's somehow noble or good to not want to be rich. I think everybody should want to be rich. I've tried poverty and in my opinion - it sucks. It sucks big, steaming donkey balls. The desire to make more money, to improve one's "lot in life" and to succeed, this is a Good Thing. Because a few assholes go too far…

I don't really disagree, but: You write as if the only options are "rich" and "poor". It's possible for the following two things both to be true: (1) Being poor sucks big, steaming donkey balls. (2) Being rich (as opposed to not-poor) is, for one reason or another, not a wise thing to aim for. As it happens, I think #2 isn't correct, because given the way the world is (a) being rich is the only way to be reasonably w…

I don't really disagree, but: You write as if the only options are "rich" and "poor".

True... in the name of brevity, and perhaps out of haste, I did generalize a bit. And the two points I mean to emphasize are:

1. Being poor sucks (I think we can all agree on this)

and

2. There's nothing intrinsically wrong with wanting to be rich, even "dirty, rotten, filthy stinking rich".

In the case of (2), I posit that the desire itself is fine, but the actions you take to try and achieve that end, may or may not be noble, just, good, or ethical.

Re: For the Love of Money

#117

Post by mhb »

bigbang wrote: post #92
31reasons wrote: post #83

I am just wondering, are these Wall Street traders smarter than an average techie working in Silicon Valley ? Are they so irreplaceable that they are offered so much salary and bonuses ? It just doesn't seem right. I am afraid to even ask for 150k salary in SV for the same amount of cerebral work.

I was wondering the same. How hard is it to go from a programmer to a trader in a bank?

Why be a trader in a bank? Lease a commodities seat and trade for your own account. How hard could it be?

Re: For the Love of Money

#118

Post by pmorici »

Tycho wrote: post #75
pmorici wrote: post #21

Earlier quoted context omitted.

They had running water and other complex infrastructure in ancient Rome well before derivatives were invented I really doubt we'd be living in a barren wasteland w/o them. There would certainly be an impact if all that stuff went away but it wouldn't be because of it's absence it would be because of the pain of unwinding it all.

Not to nitpick, but I think they had derivatives before that.

Not in the sense we are talking about them as they relate to financial markets. From what I've read they came about in the 1600's with the rise of the famous tulip bulb bubble.

http://husky1.stmarys.ca/~gye/derivativeshistory.pdf

Re: For the Love of Money

#119

Post by debergalis »

31reasons wrote: post #83

I am just wondering, are these Wall Street traders smarter than an average techie working in Silicon Valley ? Are they so irreplaceable that they are offered so much salary and bonuses ? It just doesn't seem right. I am afraid to even ask for 150k salary in SV for the same amount of cerebral work.

It's pretty simple. Work at a pizza shop, get a lot of free pizza. Work w/ people's money, ...

Re: For the Love of Money

#120

Post by [deleted] »

31reasons wrote: post #83

I am just wondering, are these Wall Street traders smarter than an average techie working in Silicon Valley ? Are they so irreplaceable that they are offered so much salary and bonuses ? It just doesn't seem right. I am afraid to even ask for 150k salary in SV for the same amount of cerebral work.

[deleted]
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