Friends don't let friends get into finance • Hacker News Board

Re: Friends don't let friends get into finance

#31

Post by rbarooah » Sat, Mar 26, 2011, 8:47 PM UTC

med555 wrote: post #30

rbarooah wrote: post #20

Finance firms put 100% of their time and energy into finding ways of making money out of existing money without producing any other value. Entrepreneurs do a little of this too, but foolishly allow themselves to be distracted by an irrational desire to also make novel and valuable contributions to society. Eventually the entrepreneurs will learn that a part time effort won't cut it and they can't beat the guys who gi…

Google. Zynga. Facebook. Intel. eBay. Apple. etc. All needed bankers to get them access to capital and grow faster, helping them hire more employees and contribute to our economy's growth and standard of living. I'd highly recommend you rely your points on empirical evidence over populist talking points.

The evidence is that the finance industry has grown faster than all of the other sectors, proving my point.

I'd highly recommend that you rely your points on empirical evidence than empty claims.

Re: Friends don't let friends get into finance

#32

Post by med555 » Sat, Mar 26, 2011, 8:53 PM UTC

rbarooah wrote: post #27

med555 wrote: post #25

Earlier quoted context omitted.

Ummm, growth is still happening in the U.S., and has continuously happened aside from a few quarters here and there. The point is not if we're growing, but how much faster we can grow. This is very basic economics.

The growth has been primarily in the financial industry. Oh - I get it now - the finance industry has provided support for itself to grow.

"The growth has been primarily in the financial industry."

Completely false and absurd. Supply follows demand. GDP has grown throughout every industry that hasn't seen a decrease in its demand (e.g. railroads, newspapers, etc.). That includes technology, consumer goods, and technology. The economy doesn't exist in a vacuum. The finance industry provides capital to all industries.

Re: Friends don't let friends get into finance

#33

Post by mynameishere » Sat, Mar 26, 2011, 8:54 PM UTC

cynicalkane wrote: post #18

warrenwilkinson wrote: post #11

Earlier quoted context omitted.

People are forced to trade, here is how: When the government needs a loan to cover its budget, they get it from the Federal Reserve. The Federal Reserve are charged to coin new money to provide the government (see wikipedia Federal Reserve, subheadings: 'Elastic Currency', 'Lender of Last Resort' & 'Central bank'). As the Federal Reserve increases the money supply, the value of the dollars in your pocket/matress/bank…

Here's the non sequitur: 1) inflation makes it costly to hold money 2) inflation forces you to make stupid speculative investments and frequent trades The second doesn't follow from the first.

Most people buy mutual funds, which take a nice fee for doing work a dart-throwing monkey could do (no exaggeration). It would make more sense for people to buy a random sample of the S&P 500, but try telling them that.

Re: Friends don't let friends get into finance

#34

Post by asanwal » Sat, Mar 26, 2011, 8:56 PM UTC

mousa wrote: post #28

asanwal wrote: post #22

Earlier quoted context omitted.

These generalizations about finance being unethical are misguided and misinformed. A bank/VC that gives a loan/investment to small business/startup. That's finance. Hardly unethical. Allowing people to get a car today while paying for it over time (instead of paying upfront). Hardly unethical. Yes, there are bad actors in finance as there are in every space. Don't the Zyngas and others of the world via their offers e…

A lot of the financial industry though today works so many layers above actual loans it's hard to see how they contribute and even harder to see why they make so much more money than everyone else. I'm not an expert, I'm sure there is some justification, but it's not obvious to most people and that's why, sometimes, we the laypeople wonder.

I agree with you to some degree. There is a lot that happens well out of public (and sometimes regulatory) purview. I just think views that "finance is bad" or "startups are the best" are myopic, don't advance the discussion and ultimately fail to realize the inter-related'ness of all these different forces.

Ultimately, we live in a pretty free agent society and if Wall St can pay more (no matter the reason), the rational engineer whose primary motivation is money should take that job. There is nothing wrong with that. The engineer who is motivated by money and other factors (building something valuable, being his/her own boss, etc) also has avenues a la doing a startup.

Re: Friends don't let friends get into finance

#35

Post by med555 » Sat, Mar 26, 2011, 8:57 PM UTC

rbarooah wrote: post #31

med555 wrote: post #30

Earlier quoted context omitted.

Google. Zynga. Facebook. Intel. eBay. Apple. etc. All needed bankers to get them access to capital and grow faster, helping them hire more employees and contribute to our economy's growth and standard of living. I'd highly recommend you rely your points on empirical evidence over populist talking points.

The evidence is that the finance industry has grown faster than all of the other sectors, proving my point. I'd highly recommend that you rely your points on empirical evidence than empty claims.

What does that even mean? Economic growth has grown consistently. Technology now makes up a large portion of our GDP when it hasn't in the past. Why attack the finance industry when you could also attack the technology industry?

There's more demand. Therefore, there's a larger supply. Simple, basic, very elementary economics.

Re: Friends don't let friends get into finance

#36

Post by med555 » Sat, Mar 26, 2011, 8:59 PM UTC

fabjan wrote: post #26

med555 wrote: post #24

Earlier quoted context omitted.

...and economists will tell you something completely different. His points are awful and rely on no empirical evidence.

The difference being historians have facts to go by, and economists have dreams.

Wait, what? Maybe the Austrian School goes by theory if that, but every other school of economics goes by facts -- including the Chicago School, Monetarists, Keynesians, New Classical, etc.

Economists' whole basis for their arguments is through empirical data and mathematical facts. Saying economists just relies on dreams is absolutely absurd and shows complete ignorance of the field.

Re: Friends don't let friends get into finance

#37

Post by med555 » Sat, Mar 26, 2011, 9:05 PM UTC

richcollins wrote: post #23

asanwal wrote: post #16

Article is totally absent of any substantive suggestions to "fix the problem". The real issue is that if you look at the risk-adjusted reward of doing or working at a startup, it doesn't compare well with working on Wall Street. And then there are those who say, let me do a few years on Wall St and then I'll pursue the startup thing. What happens during that time is they lose their entrepreneurial edge (they become c…

It's easy to fix the problem. Stop the government from stealing money and giving it to the banks.

Please explain how the government is "stealing money" for the banks. That is completely absurd. Monetary policy keeps the system in check to stabilize the economy.

Re: Friends don't let friends get into finance

#38

Post by med555 » Sat, Mar 26, 2011, 9:06 PM UTC

rbarooah wrote: post #15

secretasiandan wrote: post #3

the quant finance that takes the best and the brightest (as opposed to the bankers and sales traders), uses informational and computational advantage to make money. How are internet startups any different? Also, even the bankers and sales traders are providing a service that apparently people want. If you can judge them as not creating societal value, why can't I say that the Nth photo sharing website is not creating…

Will the government bail out the photo sharing sites when they fail?

Photo sharing sites doesn't cripple the entire economy when they fail.

Re: Friends don't let friends get into finance

#39

Post by techcrunchtroll » Sat, Mar 26, 2011, 9:08 PM UTC

Some career advice for all of you on Hacker News.

This advice may be two years too late, but may help someone just getting in now. The decision to leave a high-paying Wall Street firm is foolhardy and one that you will more than likely live to regret later. It would be much more prudent for you to stick around at a firm for 5-6 years, put away $500K-700K in cash, get some experience, make connections and then make your move. Otherwise, you'll probably end up stuck at a startup that is not really going anywhere anytime soon (maybe it will, but maybe it won't), and it will be too late to go back to Tier-1 firms to make some cash.

So the lesson for you young guys out there: Don't pull the trigger too soon IF YOU ARE ALREADY IN A MONEY EARNING JOB.

Wait it out for several years, build a small safety net, and stash away some capital for your entreupreneural endeavors a couple of years later.

Re: Friends don't let friends get into finance

#40

Post by rbarooah » Sat, Mar 26, 2011, 9:08 PM UTC

asanwal wrote: post #34

mousa wrote: post #28

Earlier quoted context omitted.

A lot of the financial industry though today works so many layers above actual loans it's hard to see how they contribute and even harder to see why they make so much more money than everyone else. I'm not an expert, I'm sure there is some justification, but it's not obvious to most people and that's why, sometimes, we the laypeople wonder.

I agree with you to some degree. There is a lot that happens well out of public (and sometimes regulatory) purview. I just think views that "finance is bad" or "startups are the best" are myopic, don't advance the discussion and ultimately fail to realize the inter-related'ness of all these different forces. Ultimately, we live in a pretty free agent society and if Wall St can pay more (no matter the reason), the rat…

This would be true if the losses from the last crash hadn't been socialized.

If the financial industry had actually had to bear the consequences of the risks they take in the same way that entrepreneurs do, the decisions would be rational. As it is, the finance sector is protected by the government whereas startups are not.