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Goldman Sachs automated trading replaces 600 traders with 200 engineers

technologyreview.com

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Re: Goldman Sachs automated trading replaces 600 traders with 200 engineers

#81

Post by qeternity »

rl3 wrote: post #60
appleiigs wrote: post #37

Earlier quoted context omitted.

Your comment is spot on. The work Goldman Sachs does is relationship driven. As a corporate client of GS, I don't need data. I need advice. Don't confuse the work that investment banks do with the work that NASDAQ does or with high-frequency trading. In addition, the reason why GS has less traders and more developers is more to do with government regulations preventing GS from doing certain types of trading. Not beca…

> As a corporate client of GS, I don't need data. I need advice. Such as: "Buy these sub-prime assets that we've bundled into CDOs. By the way, we're actively betting against you and stand to make a ton of money when they tank."

Banks are huge, with different divisions. People who spout these types of lines don't actually understand how it works. Plus, there is the whole due diligence aspect. You can't blame anyone else. Also anytime anyone sells you something, they are telling you they think it's worth less than you do. Yet everyone is fine with that in every other industry.

Source: hedge fund trader who fights banks all the time, but doesn't agree with their scapegoating.

Re: Goldman Sachs automated trading replaces 600 traders with 200 engineers

#83

Post by [deleted] »

jmagoon wrote: post #66
onion2k wrote: post #40

Earlier quoted context omitted.

because when you can write a computer program with an AI you can make the AI write the AI and you have general AI There doesn't need to be a single AI to create the entire app. An AI to model data structure, an AI to build an interface, an AI to consume external APIs, etc. We already mostly bolt libraries together to make software; it doesn't take a huge leap for those libraries to be generated by machine learning. B…

But isn't there still the step of translating the business logic into a machine readable format, and isn't that what the majority of software engineers do at this point anyways?

[deleted]

Re: Goldman Sachs automated trading replaces 600 traders with 200 engineers

#84

Post by rezashirazian »

tomelders wrote: post #4

A agency that I once worked for was asked to create a presentation of the future of trading for a well known trading platform. It was the typical fluff around voice interfaces, augmented reality, VR and all that drivel. But we all knew what the future really meant - taking people out of the equation - but we also knew that the people paying for the presentation didn't want to hear that. When people talk about the ris…

I agree. Doctors should be very worried.

Re: Goldman Sachs automated trading replaces 600 traders with 200 engineers

#85

Post by cm2187 »

qeternity wrote: post #81
rl3 wrote: post #60

Earlier quoted context omitted.

> As a corporate client of GS, I don't need data. I need advice. Such as: "Buy these sub-prime assets that we've bundled into CDOs. By the way, we're actively betting against you and stand to make a ton of money when they tank."

Banks are huge, with different divisions. People who spout these types of lines don't actually understand how it works. Plus, there is the whole due diligence aspect. You can't blame anyone else. Also anytime anyone sells you something, they are telling you they think it's worth less than you do. Yet everyone is fine with that in every other industry. Source: hedge fund trader who fights banks all the time, but doesn…

The Viniar explanation is actually quite good (not the "unfortunate to have on email" bit, the 20cent in the dollar bit):

https://www.youtube.com/watch?v=ccjZEvBGOuk

And to be fair to GS (not that it is the widow and the orphan), the "shitty deal" wasn't a reference to the collateral of the CDO, but to the fact that they didn't manage to sell a position on that transaction.

Re: Goldman Sachs automated trading replaces 600 traders with 200 engineers

#86

Post by Futurebot »

tomelders wrote: post #4

A agency that I once worked for was asked to create a presentation of the future of trading for a well known trading platform. It was the typical fluff around voice interfaces, augmented reality, VR and all that drivel. But we all knew what the future really meant - taking people out of the equation - but we also knew that the people paying for the presentation didn't want to hear that. When people talk about the ris…

Autor and Acemoglu wrote about this in their paper 'Skills, Tasks and Technologies':

'Following, ALM, we refer to these procedural, rule-based activities to which computers are currently well-suited as "routine" tasks. By routine, we do not mean mundane (e.g., washing dishes) but rather sufficiently well understood that the task can be fully specified as a series of instructions to be executed by a machine (e.g., adding a column of numbers). Routine tasks are characteristic of many middle-skilled cognitive and manual jobs, such as bookkeeping, clerical work, repetitive production, and monitoring jobs. Because the core job tasks of these occupations follow precise, well-understood procedures, they can be (and increasingly are) codified in computer software and performed by machines.'

Re: Goldman Sachs automated trading replaces 600 traders with 200 engineers

#88

Post by vacri »

tomelders wrote: post #4

A agency that I once worked for was asked to create a presentation of the future of trading for a well known trading platform. It was the typical fluff around voice interfaces, augmented reality, VR and all that drivel. But we all knew what the future really meant - taking people out of the equation - but we also knew that the people paying for the presentation didn't want to hear that. When people talk about the ris…

> But of your job is to look at data and make descisions based on that data, you're gonna be the first to go

Manufacturing and agricultural jobs have already been automated away, while data analysis jobs are only just now starting to feel the pinch - and then only in companies with very deep pockets working on a niche problem. 'First to go' has missed the mark by many years.

Re: Goldman Sachs automated trading replaces 600 traders with 200 engineers

#89

Post by ionwake »

freddyc wrote: post #87

Want to know how I know AI is over-hyped? All of the VCs who were bullish on Bitcoin a few years back are now "thought leaders" on AI.

You sound wrong.

Reread your comment and look at the price of bitcoin. Perhaps your inference is upside down.

Re: Goldman Sachs automated trading replaces 600 traders with 200 engineers

#90

Post by danans »

teachrdan wrote: post #42
burkaman wrote: post #11

Earlier quoted context omitted.

Isn't this type of trading sort of unique in how easy it is to consume the data? Even in other investing areas, people who just "look at data and make decisions" cannot be easily replaced until computers can read and understand natural language and understand the state of the world. I can't immediately think of anything else this type of automation could apply to.

Another obvious example is actuaries and any number of other analysts in the insurance industry. According to Google[1], actuaries earn an average of just over $97k/year. While this may not strictly be an "investing area," it's a clear target for automation. 1. https://www.google.com/search?q=actuaries

It's not so much the actuaries but the claims adjusters whose jobs will be automated:

http://www.inc.com/kevin-j-ryan/artificial-intelligence-repl...

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