Coders who trade: Wall Street designs its staff for the future

The "questionable people" include grandparents, firemen, teachers, etc with pensions and retirement funds.

>I don't see it contributing to some greater vision or cause. [...] I guess it's just a case of lack of empathy on my part.

Your sentiment is common and I think it's caused by people not connecting the dots from grandparents' retirement pension to the hedge fund trader.

As one example, at the micro level, grandparents are depending on a pension.[1] They also don't want their _real_ purchasing power to diminish. The "real" not "nominal" purchasing power is an important distinction because if the price of bread is $2 in 2017 but becomes $4 in 2037, they want to have adequate future money to buy food. In other words, they want their money to grow and keep up with inflation.

Your grandparents stashing money in a savings account paying less than 1% will not protect their purchasing power from inflation. Likewise, the pension manager that oversees a $1 billion retirement fund to pay retired teachers will declare it bankrupt if it only gets a 1% return by buying Treasury Bills. The pension's assumptions to avoid insolvency might require 8% or better annual returns.

Therefore, all these participants in the economy are looking for better returns. You can't get 8% from savings accounts and t-bills. That's where money managers like private equity, hedge funds, and VCs in Silicon Valley come in. They sell their ability to generate higher returns. This expertise attracts capital from entities like pension funds.

So basically, a bunch of programmers are fine tuning algorithms because [...connect a bunch of dots...] your grandmother doesn't want to be a starving destitute and live under a bridge in her retirement years. If you multiply millions of everyday people not wanting to be destitute (macro level), you end up with hedge fund managers with billions to play with.

That said, can we "reconfigure society" so that all this competitive activity of shuffling money from one pile to another isn't done? Maybe. It would involve fundamental changes that we all can't agree on. For example, if you stop inflation you can stop the incentive to generate returns that try to beat inflation; but then some would say that "deflation" would lead to people hoarding money and the economy would crash. Inflation is the current winning ideology for the modern economy. It's hard to see how we could alter society such that Wall Street traders go away.

[1] for example, the $300 billion California Public Employees pension fund provides these benefits: https://en.wikipedia.org/wiki/CalPERS#Benefits

My salary is quite average for the role/seniority level and AFAICT it's resented by many developers who work here because many will trade their "in" on their industry into more interesting fintech/banking work elsewhere somewhere down the line for higher compensation.

Knowledge of financial transactions is definitely highly specialized and I don't have nearly enough of it yet but it has started to sink in

First you have basic lending and borrowing activities. The bank can afford to pay you interest (well not now that interest rates are at zero) only because your money is invested, usually in loans.

Then you have payments, cash management for companies.

Then you have more complex services offered to larger companies, raising capital (equity and debt) on the market, helping them manage their risk with derivatives (interest rate, currency, commodities (oil, metals, livestock, etc prices), inflation, etc) plus some advisory on corporate actions (mergers, IPOs, etc).

You have insurance, reinsurance.

And then you have asset management, which you can call speculation if you want, but which is essentially people managing investment portfolios on behalf of savers, pension funds, insurance premium for long term risks, etc. With a wide variety of approaches from very conservative money market funds which invest in highly safe and liquid assets, to trackers who try to replicate a benchmark by over performing it by a little, to investments in illiquid assets (property, non listed companies) or very aggressive/leveraged strategies (hedge funds). Fundamentally what they are doing is to ensure your money gets invested wisely (at least they try).

And of course all sorts of intermediaries: consultants, brokers, market data providers, research (sort of financial journalists), prime brokers (who provide financing when you leverage liquid financial assets), system providers, auditors, rating agencies, etc.

Now you could call everything speculation: when a bank lends you money, it bets on your financial soundness. When an investor takes the opposite side of a commodity (say oil) transaction, it bets on the price of oil. But that allowed you to get money to run a business or to offset an oil price risk that could have made you lose money if oil increased (say your are an airline company). There is no real dinstinction between risk taking / risk transfer and speculation. But in most instances it does have a social benefit.

But if they think I can become a domain expert by reading junk on the internet with no one really verifying my skills, I'm happy to take their paycheck.