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What the interns have wrought, 2025

blog.janestreet.com

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Re: What the interns have wrought, 2025

#61

Post by infecto »

nemomarx wrote: post #43
Cthulhu_ wrote: post #33

Earlier quoted context omitted.

Thing is, there's very few problems that don't involve money or making money that can be solved with software. Even laudable projects like green energy are ultimately capitalist endeavours, since nobody will build solar panels etc for free.

Yeah but building stuff to sell is fairly different from making trades faster or other market stuff? It's another level detached from real value

How is it different? We could make an argument that the efficient allocation of capital is what drives the rapid expansion of solar. It provides loans for businesses and individuals, it helps investors raise money, it rewards companies for doing well, it allows farmers to hedge crops. It is not perfect but it helps facilitate most of our modern society. Not perfect but which system would be better?

Re: What the interns have wrought, 2025

#62

Post by infecto »

strogonoff wrote: post #53
Cthulhu_ wrote: post #33

Earlier quoted context omitted.

Thing is, there's very few problems that don't involve money or making money that can be solved with software. Even laudable projects like green energy are ultimately capitalist endeavours, since nobody will build solar panels etc for free.

There is a difference between 1) doing something valuable that is then rewarded with money through market mechanics and 2) maximizing money as an end in itself. The former is a great feature of capitalism, the latter is its tragedy and Achilles heel. In the first case, money is important (if you completely ignore it, you can’t deliver value sustainably), but in a perfect world it should be more like fuel and an indic…

Already said it before but the efficient allocation of capital benefits all of us. From the farmer hedging their crop prices to the local manufacturing company that is drawing a loan to expand their business. What system would you have in its place?

Re: What the interns have wrought, 2025

#63

Post by techdmn »

MontyCarloHall wrote: post #26
KHRZ wrote: post #2

I was curious what kind of company needed to develop all these different kinds of advanced tech. Turns out it's just so they can be sneaky and trade shares quickly. Kind of sad IMO.

Agreed. Amongst the top 5% smartest quantitatively-minded kids I knew in college, I’d say ~25% of them ended up at quant shops like Jane Street, sometimes straight out of school, sometimes after doing a PhD. I can only imagine what good that brainpower could do for humanity if it weren’t occupied finding cleverer ways to manipulate electronic money.

Apologies for a (mild) thread-jack. My opinion, one problem with our economic system is focus on short-term results, to the point that several notable companies' stock prices are completely divorced from the reality of their performance. This makes sense if the stock market is primarily a device for gambling or extracting wealth. Investors care less about the prospects of the company than the prospects of the market. I suspect this can trickle all the way down: Board -> CEO -> managers -> individual contributors, all given goals intended to pump the stock short-term, rather than build long-term results.

How do we start to care about quality, building lasting things, fundamentals? What would happen if we taxed capital gains at 100% for the first, I don't know, 3 / 6 / 9 months of holding an asset? Maybe investors would have more incentive to care about fundamentals?

Anyway, I assume I'm wrong about all of this, just looking for someone to explain why. ;-)

Re: What the interns have wrought, 2025

#64

Post by antonvs »

infecto wrote: post #23
monospacegames wrote: post #15

Earlier quoted context omitted.

Is that why they got banned in India recently? Because they were too good at offering complex financial instruments to customers at competitive prices? Ultimately companies like Jane Street have no moral rudder and it is a waste of talent for smart young people to work for them, but we are so far beyond such considerations at this point that it sounds naive to even suggest that maybe talented people should work on th…

At the end of the day they are a prop firm. They are a business trying to make money and part of that is market making but it’s not solely market making. You may not like it but we function in a capitalist society and as such the efficiency of markets is part of that. To have that happen usually requires the market as a whole participating and that includes firms like Jane Street. In the India case I don’t know if wh…

> I don’t believe any of us are in a position to say how folks should be spending their time.

We obviously can't tell people how to spend their time, but we can point out that there might be moral reasons to avoid working in industries and for companies with particularly strong negative impacts on society.

> If we went down that road we could probably argue it back to nobody should be working and should simply be farming for our own food.

This is a classic false dichotomy. There are an infinite number of middle grounds between farming for our own food and an ultracapitalist dystopia in which morality is replaced by profit.

Re: What the interns have wrought, 2025

#65

Post by nemomarx »

infecto wrote: post #61
nemomarx wrote: post #43

Earlier quoted context omitted.

Yeah but building stuff to sell is fairly different from making trades faster or other market stuff? It's another level detached from real value

How is it different? We could make an argument that the efficient allocation of capital is what drives the rapid expansion of solar. It provides loans for businesses and individuals, it helps investors raise money, it rewards companies for doing well, it allows farmers to hedge crops. It is not perfect but it helps facilitate most of our modern society. Not perfect but which system would be better?

If you could either improve hft by some percentage, which slightly increases market liquidity and has downstream impacts, or you could work on making the manufacturing cost of solar panels the same percentage cheaper or making then some percentage more efficient, the latter option is more direct.

I think it would be good if our best minds went to work on directly creating better things instead of indirectly moving money around efficiently so that other people might eventually find success.

Re: What the interns have wrought, 2025

#66

Post by infecto »

antonvs wrote: post #64
infecto wrote: post #23

Earlier quoted context omitted.

At the end of the day they are a prop firm. They are a business trying to make money and part of that is market making but it’s not solely market making. You may not like it but we function in a capitalist society and as such the efficiency of markets is part of that. To have that happen usually requires the market as a whole participating and that includes firms like Jane Street. In the India case I don’t know if wh…

> I don’t believe any of us are in a position to say how folks should be spending their time. We obviously can't tell people how to spend their time, but we can point out that there might be moral reasons to avoid working in industries and for companies with particularly strong negative impacts on society. > If we went down that road we could probably argue it back to nobody should be working and should simply be far…

Sure, but that’s kind of my point, once you open the door to moral gatekeeping of jobs, it gets very slippery very fast. You can always trace the “negative impact” argument up or down the stack. That accounting software? It helps a business capture margin. That business? Probably acting as a middleman extracting value from someone else. Even compiler contributions ultimately fuel businesses optimizing for profit.

You’re right that there are middle grounds between subsistence farming and some caricature of ultracapitalism, but deciding where to draw that line in practice is messy. Pretending it’s obvious which industries are “moral” and which aren’t usually says more about someone’s priors than it does about some universal ethical framework.

At the end of the day, efficient allocation of capital, imperfect as it is, is what makes the system work. It drives productivity gains, lowers costs, and ultimately raises living standards across the board.

Re: What the interns have wrought, 2025

#67

Post by infecto »

nemomarx wrote: post #65
infecto wrote: post #61

Earlier quoted context omitted.

How is it different? We could make an argument that the efficient allocation of capital is what drives the rapid expansion of solar. It provides loans for businesses and individuals, it helps investors raise money, it rewards companies for doing well, it allows farmers to hedge crops. It is not perfect but it helps facilitate most of our modern society. Not perfect but which system would be better?

If you could either improve hft by some percentage, which slightly increases market liquidity and has downstream impacts, or you could work on making the manufacturing cost of solar panels the same percentage cheaper or making then some percentage more efficient, the latter option is more direct. I think it would be good if our best minds went to work on directly creating better things instead of indirectly moving mo…

I get the intuition, making solar panels cheaper feels more “direct” than making markets more liquid. But that framing underestimates how much “indirect” efficiency matters.

Capital has to get from savers to builders. Liquidity, tighter spreads, and efficient pricing lower the cost of capital for all projects, including the ones building better solar panels. If financing those projects is cheaper and faster because markets function well, more of them get done.

It’s easy to glorify the visible widget (solar panels) and discount the invisible infrastructure (capital markets), but the latter is what makes scaling the former possible. The system needs both.

Re: What the interns have wrought, 2025

#68

Post by nh23423fefe »

achierius wrote: post #45
dude250711 wrote: post #41

Earlier quoted context omitted.

> I can only imagine what good that brainpower could do for humanity if it weren’t occupied finding cleverer ways to manipulate electronic money. Maybe humanity can start paying them decent money first?

You're right, we should fix our economic system so that it better incentivizes things we care about rather than stuff like quant research.

Why did you say we, when you meant I?

Re: What the interns have wrought, 2025

#69

Post by strogonoff »

infecto wrote: post #62
strogonoff wrote: post #53

Earlier quoted context omitted.

There is a difference between 1) doing something valuable that is then rewarded with money through market mechanics and 2) maximizing money as an end in itself. The former is a great feature of capitalism, the latter is its tragedy and Achilles heel. In the first case, money is important (if you completely ignore it, you can’t deliver value sustainably), but in a perfect world it should be more like fuel and an indic…

Already said it before but the efficient allocation of capital benefits all of us. From the farmer hedging their crop prices to the local manufacturing company that is drawing a loan to expand their business. What system would you have in its place?

Off the top of my head, for the manufacturing company, why not have people invest in it? If it is doing something good, people will buy shares, and the company will gain the money to expand. For the farmer, if the issue is harvest instability, why not amortise the cost accordingly?

Re: What the interns have wrought, 2025

#70

Post by smokel »

infecto wrote: post #50
smokel wrote: post #42

Earlier quoted context omitted.

It would be nice if smart people would not require law to operate in an ethical way. For complicated problems, and for people who are just plain stupid, it's nice to have law and law enforcement, so that capitalist society can work properly. But the idea that smart people should "push the boundaries" to find out "what is ok and what is not" is either naive or borderline sociopathic IMNSHO.

I’m not being naive or sociopathic here, I’m pointing out how securities law actually functions, at least in the U.S. It’s rarely as cut-and-dry as you suggest. The courts exist precisely to resolve ambiguity, and there’s always some ebb and flow depending on the administration and the legal environment. Before throwing around labels like “naive” or “sociopath,” it’s worth recognizing that a capitalist system relies…

I'm not opposed to capitalism, and enjoy its benefits everyday. I don 't however agree that efficient markets are required for capitalism. I also don't think that HFT is the only way to create efficient markets.

I do however believe that gaming the system for personal profit is unethical. The intention of the law might have been to build a playground for people to enrich themselves, but from a Christian standpoint, I don 't think this always works out well for society. I'm not a Christian, but I do like some of its values.

I was a bit disappointed about the suggestion that capitalism requires certain things that make Jane Street a necessity. This is not a fact, nor does the current process benefit everyone equally. Rejecting that notion, and possibly reading a bit too much into that, is what caused me to use said terms.

I do agree that we are probably talking past each other though :)

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