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For the Love of Money

nytimes.com

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Re: For the Love of Money

#151

Post by judk »

dllthomas wrote: post #88
tracker1 wrote: post #66

Earlier quoted context omitted.

Any stock trade where the buy vs. sell of a stock is under 3 months is not investment.. In under a day, even more so. It will not be felt by the company in question in any meaningful way, and is simply a newer form of gambling. By taxing any income made from trades where ownership is less than a month at 100% we can create a more honest trading environment, where sane investment becomes a norm. The fact is that would…

It's not investment, but it may be legitimate market making. If the only people in the market are investors, it is significantly harder for me to liquidate my stock when I need to and significantly harder for me to buy stock when I want to.

Not really. If there aren't investors willing to buy your stock within a few minutes, there won't be any HFTs willing to buy either. HFTs just bridge that gap in time, for a fee.

Re: For the Love of Money

#152

Post by judk »

w_t_payne wrote: post #81
phillmv wrote: post #23

Earlier quoted context omitted.

It's sorta up for debate. My understanding, which is tiny and very limited, is that you can think of the role of finance operators as "liquidity providers". They're the grease in the wheels of capitalism; by either providing access to capital (via loans, or investment) or by matching buyers with sellers. A classical example is you're a farmer that wants to hedge the risk that your crop will fail due to random weather…

There is already regulation governing the minimum pricing increment ("tick size") for financial instruments. It would not take to great a stretch of the imagination to imagine regulation covering the maximum frequency at which trades could occur. We would have to decide what sort of delay we consider tolerable, then (perhaps) hold auctions at that frequency - perhaps once per millisecond, perhaps once per minute, may…

Tick size is exactly the problem! Tick size means that sales go to the people with the fastest computers, not people offering the best prices.

Re: For the Love of Money

#153

Post by judk »

WalterBright wrote: post #97
ItendToDisagree wrote: post #27

Earlier quoted context omitted.

As the above commenter stated. In the classical example (and a perfect world) derivatives can act as a sort of "insurance" or guidebook of risk. But we do not live in a perfect world. Greed is a real thing (and maybe one of the reasons Capitalism works so damn well), so it rarely works exactly that way. In the end it is often just a way to treat the little guy as a sucker while insulating the bigger fish. Or at least…

When I was young, I got into a poker game with some local hoods, and they cleaned me out. I knew enough about the odds to know they were cheating, but not enough to know how they were doing it. I resolved not to play poker again until I understood the game much better. Ditto for derivatives. If you don't understand the game, you should invest in something else.

My poker experience is actually closely analogous to the reality of AIG meltdown: when I lost, my buddies collected, but when I won, "we were just playing for fun, not real money".

Re: For the Love of Money

#154

Post by frogpelt »

yetanotherphd wrote: post #136
frogpelt wrote: post #63

This is the ugly underbelly of capitalism: that people aren't paid based upon their "importance". They are simply paid based upon their "value" to the market. Is it important for Clayton Kershaw to pitch for the Dodgers? No, but it is demanded. While I understand the sentiment of wanting to help the poorest of the poor, if it's true that money isn't the be-all, end-all then does it really matter that a trader makes m…

I would say that in most cases, people need to redefine importance in a way that is hard to accept. There is no need for scare quotes. The value is real, and when a person earns a certain amount, it's because the produce that much value (finance is kind of exceptional, in that there is a mix of true value and rent-seeking). Now how can it be that nurse practitioners don't produce that much value? It is because the re…

Very well stated. And you're right, no need for scare quotes.

Re: For the Love of Money

#155

Post by gesman »

rpicard wrote: post #139
gesman wrote: post #80

Earlier quoted context omitted.

It's arguably better to feel empty about million dollar occupation vs. feeling empty about poorly paid occupation.

It's arguably better to feel empty about a poorly paid occupation than to feel empty about being unemployed. It can go on for a while, but it doesn't mean people shouldn't address their problems.

...starting with definition of the problems...

Re: For the Love of Money

#156

Post by gaadd33 »

javajosh wrote: post #138
michaelochurch wrote: post #8

I've worked in finance. There are all types. Sure, there are asshole alpha traders who whine about $2 million bonuses. Those guys are pretty uncommon, they're disliked even in spite of their P&L, and no one helps them when they get unlucky. There are also people who don't think or live very differently from respectable professors-- except who have $12 million in their bank account instead of $12. There some pathologi…

>If he doesn't feel like working hard, he could probably use his VC connections as a cash cow... Actually, if he doesn't feel like working hard, it sounds like he could retire on a comfortable 6-figure income for the rest of his life. Without interest, naively $6m will yield $100k a year for 60 years, which is more than enough to raise a large family in a nice neighborhood anywhere in the states - especially if the h…

$100K/year with a "large" (lets say 4 kids?) family in Manhattan will not be very comfortable or nice.

Re: For the Love of Money

#157

Post by kamaal »

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.

>>Are they so irreplaceable that they are offered so much salary and bonuses ?

They are doing it to us, as we do to many professions. This whole thing of 'Some professions just can't benefit from economics of scale' come to my mind. Just like how the guy flipping burgers makes minimal economic impact compared to you and I, we make a minimal financial impact compared to these guys.

But there are a lot of areas where you could disrupt this theme of work. Profitable side projects, start up's, bootstrapping and stuff like that can help us out here. But the point is most geeks and nerds are to a great extent very naive when it comes to money matters. We are poor in negotiating skills and we buy into this loyalty thing too easily.

I don't know of one single VP/exec/CEO who wouldn't leave their job for a bigger bonus/paycheck/options, yet if an engineer did it- You would have see these people shouting 'greed' from top of the buildings.

Re: For the Love of Money

#158

Post by nilkn »

gaadd33 wrote: post #156
javajosh wrote: post #138

Earlier quoted context omitted.

>If he doesn't feel like working hard, he could probably use his VC connections as a cash cow... Actually, if he doesn't feel like working hard, it sounds like he could retire on a comfortable 6-figure income for the rest of his life. Without interest, naively $6m will yield $100k a year for 60 years, which is more than enough to raise a large family in a nice neighborhood anywhere in the states - especially if the h…

$100K/year with a "large" (lets say 4 kids?) family in Manhattan will not be very comfortable or nice.

This is silly. You'd be retired. You could go anywhere you want, unbound by the location of some office. You'd have almost no reason whatsoever to stay in Manhattan other than a desire to burn through all your money and raise your kids in an apartment rather than a house with a yard.

There are plenty of cities in the US where a $100k income would afford a very nice middle-class or even upper-middle-class lifestyle.

Re: For the Love of Money

#159

Post by aidenn0 »

peterpathname wrote: post #148
king_jester wrote: post #54

Earlier quoted context omitted.

> The desire to make more money, to improve one's "lot in life" and to succeed, this is a Good Thing. One of the key points of this essay is that making more money doesn't necessarily improve one's quality of life. The author clearly talks about at age 25 being financially secure and wealthy, so his pursuit of additional wealth wasn't really about an increase in quality of life. > You can be rich and unhappy, or poor…

I don't think it's possible. We live in a finite world. All my wealth comes from someone else's poverty.

There is more per-capita wealth today then there was 1000 years ago. This is despite there being far more people today than there was 1000 years ago. Therefore it is possible to increase the total wealth in the world.

Re: For the Love of Money

#160

Post by kamaal »

ItendToDisagree wrote: post #56
king_jester wrote: post #54

Earlier quoted context omitted.

> The desire to make more money, to improve one's "lot in life" and to succeed, this is a Good Thing. One of the key points of this essay is that making more money doesn't necessarily improve one's quality of life. The author clearly talks about at age 25 being financially secure and wealthy, so his pursuit of additional wealth wasn't really about an increase in quality of life. > You can be rich and unhappy, or poor…

That is an interesting question about being a billionaire without exploiting anyone . I'm genuinely curious about that. Not that I think being a Billionaire automatically makes you an asshole. I'm just curious if that is possible just from a logistical standpoint. Somewhere along the line someone gets screwed right?

>>That is an interesting question about being a billionaire without exploiting anyone.

That question actually has deep philosophical implications. I think the net content of evil and good has to be cancel out at a social level completely for the society to go in total social harmony.

So there has to be in some way a balance of evil and good in any society for it even to survive.

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