Slashdot Mirror
High-Frequency Programmers Revolt Over Pay
An anonymous reader writes "Programmers who design and code algorithms for investment banking are unhappy with their salaries. Many of them receive a low 6-figure salary whereas their bosses — who manipulate these algorithms and execute the trades — often earn millions. One such anonymous programmer points out that he was paid $150,000 per year, whereas the software he wrote was generating $100,000 per day."
It isn't that the programmers earn too little it's that their bosses earn too much.
History is so yesterday!
I mean, correct me if I'm wrong here, but the programmer in question agreed to the terms BEFORE he wrote the first line of code.
Shouldn't gripes like these come up before you begin working? Maybe this is part of the problem, non?
Mod me down with all of your hatred and your journey towards the dark side will be complete!
"One such anonymous programmer points out that he was paid $150,000 per year, whereas the software he wrote was generating $100,000 per day."
And if said software screws up and costs a few hundred million, or otherwise causes other "bad things" to happen, what's the accountability of the programmer or the manager?
He can have mine, where he'll write code that helps save lives everyday, for less than six figures.
RTFA. They are quitting and going somewhere else. The finance sector is going have to deal with this if they don't want to be massively outcompeted by their own ex-programmers.
Did you read the article? No, of course you didn't. That's what they're doing.
I don't need a million points of light, just two points of multi-mode fiber and a 10 Gig-E router.
FTFA:
"Now some programmers feel used and are instigating a revolt.
They are doing so by striking out on their own or forming profit-sharing arrangements."
That's hardly "whining," in fact it's precisely what they ought to do.
The outstanding part is that Forbes is recognizing this. We all know that folks in IT are underpaid in many professions, but the proof is when people actually say "fuck you" and go work elsewhere. That will *force* salaries up to the real market rate. And when publications like Forbes notice this, it's harder for managers to pretend it's not happening.
Thank you, to the ladies and gentlemen who struck out on their own, and thank you to Forbes for noticing. Both of these will make life a little better for the rest of us.
I think that something really important to remember in all this is they live in NY. You pretty much have to divide their salary by half to get an equivalent salary anywhere else in the US.
Even with that in mind, I think the real problem isn't that the programmers should make more, it is that the traders should make LESS. Whining about not being able to take advantage of rigging the game to funnel money to yourself like your superiors do shouldn't get you any sympathy.
The programmers are revolting...
You said it; they stink on ice.
Don't blame me, I voted for Cthulhu.
A counter-point to all of the hate.
a. The American Dream (tm) says that if you work hard, you will benefit in the end. High risk / effort jobs should pay well
b. I bet these guys signed some sort of non-compete contract. Let's say that you and your buddies are the golden boys of financial trading algorithms. I think that you should get pay increases if your company is doing well. A 20% pay increase would probably shut them up.
c. After actually scanning the article,
Computer jockeys setting up own shops in bids to make millions.
[...]
They are doing so by striking out on their own or forming profit-sharing arrangements. Jeffrey Gomberg, 32, worked for a trading firm that paid him a low-six-figure income after four years on the job. His trader colleagues, by contrast, made millions manipulating the algorithms he'd written.
[...]
The programmer's bosses offered him an office and a $45,000 raise, but he left instead. He found a partner, and together they began trading on their own. The programmer now pockets more than half of any profits his software generates. The programmer says he's making about the same money he did at the job he left. But at his old job he'd topped out in pay while now he says the sky's the limit.
“I'm on my way to making a ton,” he says
It seems that they did the right thing. Why are all of you complaining? They didn't like their job, they grew a pair of balls and went out on their own.
It's amazing what reading TFA can let you know.
I don't know what he's complaining about. The programmer in question is making more money in one year than most people in my county see at once in several (I say most, there are those who make 6- and even 7-figure salaries around here, though I do believe it is a minority that does so).
"There is a way that seems right to a man, but its end is the way of death." Proverbs 16:25 (NKJV)
"Many of them receive a low 6-figure salary whereas their bosses — who manipulate these algorithms and execute the trades — often earn millions."
A Nascar Driver's pit crew recieve a low 5-figure salary while their bosses - who use the cars to win races - often earn millions.
I get why the programmers are disgruntled, the code they write makes a lot of money and they aren't getting a huge cut, but it seems like the algorithm the program is based on would be the most important aspect. Besides, $100,000 a year doesn't seem that bad to me.
Sent from my iPhone 5
I agree here. Does the algorithm do everything on its own and the programmer's bosses have no input? I'll bet the software is a very small piece of the money-making picture. Was the programmer provided with any resources to write that algorithm? Could the programmer write the algorithm on his own, freelance style, and sell it to the company? I doubt it. Maybe these programmers deserve a raise, and the bosses probably get paid too much, but this is a one-sided story.
There are more things in heaven and earth than are dreamt of in your philosophy.
they point out that they get paid only $60,000 a year, whereas the coal
Fixed it for ya.
--fatboy
Everyone is paid less than their worth. That's why people would form unions before they were stupefied by tv and the false hope that they would rise to the exploitative class. The fact that people are now paid less than 1/100th their worth isn't surprising but it is pathetic.
Democracy Now! - your daily, uncensored, corporate-free
Like most model slashdotters, I fly off half-cocked then RTFA.
Algorithmic trading is not effective if you have to pay commission on your trades. Their software only works if it's used by a corporation with
1) network connections to stock exchanges
2) seats on those exchanges, which allows stock to be traded directly instead of through a broker
It annoys me like hell that people use this kind of arguments.
Maybe they are excellent programmers, but bad business men. It doesn't mean they deserve to have their blood sucked from them.
If you shift all the income from the workers to the managers, everybody will want to make business, and there'll be nobody left to do some work.
I'm not an electronic trader but I do work in a data-intensive tech job on Wall Street. And the above mindset is very common - that business guys are super smart and everyone else is a glorified office assistant. All of the senior managers at my company have MBA's and give only minor thanks to the computer scientists and statisticians that keep them employed. My supervisor only has a vague idea of the data and that's only because I keep him informed. Without me the guy would be completely lost. The techies definitely don't get much respect.
Erm.... my options are quit or quit?
What about quietly undermining the organization while biding your time looking for opportunities?
THL phish sticks
Yes, and I am the IT Manager who makes sure that the bankers and analysts have the hardware, software and comms tools to do their jobs. Right down the corridor is Michael's room - he's our maintenance guy - if he didn't empty my bin, keep the area tidy and make sure the lights stay on...
AT&ROFLMAO
Strangely enough, that's what the article is about. A whole bunch of programmers asking for more money, being told they can't have it, then quitting and setting up competing businesses that are outperforming the first set.
"I Know You Are But What Am I?"
Those programmers and those brokers are doing nothing of worth to society. They are just playing games with currency. If our government wasn't in complete collusion with Wall Street, millisecond trading would be illegal. The issue isn't that the programmers aren't making enough money, it's that their jobs and the jobs of their bosses should not even exist.
Ceci n'est pas une sig.
Option Three:
Write a subroutine that takes the fractions of cents usually rounded off and tallied up later, and deposit them into an account of your own. Then sit back as the money trickles into your account. What could possibly go wrong?
Let's see: financial giants, capable of spending hundreds of millions of dollars a year on the servers, all the coders, access to the markets, and not to mention *the assets they trade at a profit*... Vs the guys who made 150k a year and just quit to form a startup. Somehow I doubt they are too worried.
The only chance these guys stand is to basically create a "better" program they can then sell back to the banks. The problem is, the programs themselves are very simple (the simpler the better, speed is all-important) so it comes down to the equipment they use that dictates the revenue. Unless they come up with a more profitable model than "buy low, sell high" they are probably going to have to beg for their old jobs back before too long.
Wow! It's amazing what you learn when you actually read the article. I should do it more often.
These guys are not whining about the situation, they are actively taking measures to fix it.
If he's in New York City - which is very likely - 150k a year isn't exactly champagne wishes and caviar dreams.
And you really think the colleagues using the software were footing the bill? Bullshit. It's about time developers stood up and demanded compensation for their inventions instead of letting idiot stock traders reap the rewards by pushing a few buttons.
Camping on quad since 1996.
$60000??
My brother in law drives a coal truck and is on $140000 a year for four days a week work (12 hour shifts).
His meals and accommodation are paid for and he's flown there and home once a fortnight.
Not bad for someone who would be regarded as white trash by most (uneducated, four kids didn't, finish high school and yet earns more then most college graduates)...
I'm starting to think in my old age that Uni / College is for the most part the 21st century version of indentured servitude.
Excuse me, I believe you have my stapler.
Of course one may want to make sure they have another job before quitting...or "not as much money as I want" could easily turn into "no money at all."
I was a programmer for one of the companies mentioned in TFA; you've heard of them. The algorithms they're talking about are not really developed by the programmers, they're typically invented by the phalanx of PhD mathematicians the company also employs; the programmer's job is to implement it in the most efficient way possible.
Day one I was handed a paper on Eigen-related trading, straight out of TeX and was told to implement it. I admit that I had to go to the bookstore at lunch just to figure out what some of the symbols were. What I had two weeks later was a working version in C++ that did the job; over the course of a few months I refactored and refactored it to run faster; no object copying (everything using references), bit shifting, you name it, I used it. The code was tight and ran fast; as far as I know it's still being used.
I see it more as being a waiter; you may be the "face" of the restaurant, delivering the meal, but your tips also go back to the cooks, busboys, etc. I helped out on another project where, to this day, I *still* don't get how it works, yet the code too runs fast and correctly, as far as I know.
It should also be noted that the pay might be good, but the life is horrible; if you're young and single it's definitely something to go for, but save your money because there will come a time when you just can't do 100 hour weeks, week after week after week for years and years.
The only memory I really have of my 20s and early 30s is the glow of a screen.
you called?
+1 - Honesty?
Happy people make bad consumers.
I think the real problem isn't that the programmers should make more, it is that the traders should make LESS
I don't know that I agree. I think this is a very subjective issue. The reality is, the amount of revenue derived partially from these programmers has absolutely nothing to do with what their compensation is or should be. By their rationale, every teller at a bank should have salaries commensurate with that bank's revenue, since they're an element in processing deposits/checks/payments/etc. Hell, the data center I run makes millions every hour, but I don't expect that I should make 7 or 8 figures because of it.
The lesson here is: negotiate well on the way in. Do your homework, find out what the job entails and what responsibilities/liabilities you will have and determine for yourself if the compensation being offered is worth it. Once you cut the deal, that's it. If you don't like it, you can do as the programmers in the article are doing, go somewhere else and try to negotiate a better deal. It ain't personal, it's business.
The REAL Option Three: Understand that the managers are capital and you are labor, and start a union, and force a wage scale onto them.
It says everything I need to know about Slashdot that nobody has said this yet.
I agree here. Does the algorithm do everything on its own and the programmer's bosses have no input? I'll bet the software is a very small piece of the money-making picture. Was the programmer provided with any resources to write that algorithm? Could the programmer write the algorithm on his own, freelance style, and sell it to the company? I doubt it. Maybe these programmers deserve a raise, and the bosses probably get paid too much, but this is a one-sided story
I doubt someone gave the programmer a task "earn money", and he came up with a novel idea on his own to do that. Much more likely, someone much higher up the food chain identified an opportunity - either himself, or more likely, copying it from someone else doing the same thing. Maybe even tweaking it a little bit. The code would be a little part of the whole picture - the whole picture probably includes things like real-time trade access, working capital and the tweaks/monitoring management do.
In the big picture, of course Wall Street anything makes way too much. And the rationale for attracting the best brains into what is arguably a zero-sum game most of the time - or recession-inducing madness at other times - can obviously be discussed as well, on the macro level. But I doubt the programmer here added more value than most other normally competent programmers would do. They got a task, and did it. And got a good salary for doing what they're told.
And you really think the colleagues using the software were footing the bill? Bullshit. It's about time developers stood up and demanded compensation for their inventions instead of letting idiot stock traders reap the rewards by pushing a few buttons.
The stock traders make what they do because they know what buttons to push and when. If they push the wrong button at the wrong time, they stand to lose millions for their clients and themselves. These programs have no idea as to when to buy, sell or hold. All they do is retrieve data and analyze it into reports. It's up to the trader to know what to do with it.
If being an "idiot stock trader" who makes millions is so easy, why aren't you doing it? You can push a few buttons, right?
There is no "I disagree" mod for a reason. Flamebait, Troll, and Overrated are not substitutes.
Exactly right. The value doesn't actually come from the algorithms, it comes from the position of the bank which gives it access to information before the rest of the market, allowing the big banks to (illegally? certainly unethically) skim money while essentially creating no new value for the marketplace. There are plenty of people who could write those programs, but only a few people in strategic positions can make sure the banks get the inside track to screw everyone else on earth. Hooray for deregulation!
Although the moon is smaller than the earth, it is farther away.
Hi, you must be new to America. Here, money is more important than life, ethics, or anything else.
Palm trees and 8
You seem to be mistaking a little bit of coding with the work that is actually being done.
The programmers in this article are not dumb fuck meth addicts building a website and writing a little bit of Flash or C++ or even guys with EE or CS majors, but rather tend to be Economic or Statistic PhDs from Northwestern, UC, and other major programs. From the article, Sergey Aleynikov, according to his LinkedIn pagelike, has at least a masters from Rutgers and likely a PhD.
The programmers are working with SAS and other powerful statistical software that on their own is easy enough to learn. But these programmers are applying what the learned in their PhD studies to create trading and marketing strategies and then create proof of the trading and marketing strategies. They are making their companies millions and get paid very little because "they are only programmers".
They have every right to not be particularly happy. The programmers, these economics PhDs, know their worth and it isn't 125k a year.
Also, there is an increasing tendency in American business culture to undervalue the PhD as a foreigner or nerd degree and require anyone who makes real money to have an MBA.
Hoist Number One and Number Six.
Only on Slashdot can a $100,000-$150,000 salary be described as "[having] their blood sucked from them." Wow.
Many years ago I created fancy condenser units. I could easily create four or five a day and they sold for 5K each. I was payed about $10. per hour and creating $25,000 in product each day.
My point being that our economic system is slanted in such a way that those that actually create are often not paid much at all whereas those that create nothing often are very well paid. That attitude is beginning to trigger some real negatives. The car mechanic or tradesman now often has little conscience and is likely to cheat and do poor work to whatever degree he can get away with it while charging huge rates for his efforts.
I used to write stockmarket software for a global supplier. Nice stuff, through this software ran billions a day, direct feed to the stockmarket-floor.
Now I work as a consultant for a consultancy firm, to get this contract they had a "fixed entermediate consultancy firm", who took 10% profit on my price just to put me into the company. (under their labels and what not)
So I filled in timesheets for my employers, the intermediate party and for the client. It wasn't very clear why I was filling in timesheets for the client as well, but it turned out my work was billed to their clients billing my work per hour with a factor of 2.5 on my price because they could.
This effectively resulted in me working hard, virtually for free, and generating profit for 4 companies (employer, intermediator, client, clients' client) while my pay was insulting for the work I've put out (under 8% of the cash my work generated).
If you want to keep your devs productive and happy, you should spoil them a bit and they'll put out. But I know alot with the same sentiments and effectively migrating to management hoping they'll make their big bucks, often resulting in incompetent management.
I think we can keep recursing like this until someone returns 1
And it ain't exactly the poor house either. People have this idea that things are so expensive in the big cities (New York, Chicago, San Francisco, etc.) but that really only applies to housing. $150k in New York is probably matched by $80-100k elsewhere in the states.
"Educate the mind but never at the expense of the soul."~Blessed Basil Moreau
Your post should have had a spoiler warning, now I feel unmotivated to read the article.
Where I live, I make the equivalent of USD 29.000 a year. It looks low, but it's really not bad around here. I have no idea how it is in New York, though. Maybe for a NY standard I'm below the poverty line.
But if the programmer makes N and his boss makes 10 times that by adding very little value, yes, the programmer is being blood-sucked.
the real problem isn't that the programmers should make more, it is that the traders should make LESS.
Wow. I'm a total stranger, but can I decide what you make? On a whim? Seems you don't have a problem doing it for others.
I had a sucky sig.
We have a winner!
If you're already at the point where you'd be fine with quitting, consider organizing a union instead. Worst that can happen is that they can look for some excuse to fire you (in violation of a bunch of federal and state labor laws), and you were planning on leaving anyways. Now, I know that this goes against a lot of folk's libertarian ideals, but unions can dramatically improve the working environment for their members.
The other factor here is that when programmers complain a lot about salaries, that usually means they're being treated poorly in other ways. If I'm getting $100K and working 40 hours a week in a comfortable office with free lunches and snacks and smart colleagues and reasonable project requirements, I'm not likely to start agitating for more pay (In part that's because that pay scale is well above the median for a programmer in my area). If, on the other hand, I'm required to work 60-80 hours a week in a cellar with no bonuses or overtime or perks, I'm not so happy about the $100K.
I am officially gone from
But I know alot with the same sentiments and effectively migrating to management hoping they'll make their big bucks, often resulting in incompetent management.
Yeah, I know this perfectly. In my country, if you're not a manager by 30, you're a loser. That results in a lot of people moving into management that shouldn't be there, and would be useful doing other things.
Also, companies treat engineers like shit and then complain they can't employ good engineers. There aren't any. They're all too busy being bad managers.
"He deserves no more than he agreed to when he started employment."
Only if:
* He was a properly informed agent when he entered the deal
* Environment for the agreement hasn't changed
"You can't complain about a salary that YOU agreed to."
Of course you can (you always can do it). You can even *ethically* do it if you were tricked into an unballanced deal.
Unfortunately, employers use the "bad economy" argument to try and justify the rampant abuse. A perceived bad economy is an employer's best friend.
bluHatter
Here we have a bunch of jerks whining about the 6-figure salaries they earn. I wish I were earning what these guys earn. If they have a problem they can go find a job elsewhere. Or do what everyone else has to do, rise through the ranks of the company and get promoted to the point where you're earning the kind of salary you want to see.
While I agree it's quite insane what some in management are earning they also have the responsibility of the entire company on their shoulders. I have a friend who's a programmer at a billion dollar firm that does business related with the stock market and the upper management is comprised of middle aged guys who's entire life is work. The majority are single or divorced and don't even have time for a girlfriend. But anyway, my point is that pay isn't based on what management is earning. It's based on your perceived value to the company. There are probably countless other programmers lined up behind these guys hoping to take their jobs. Not all are qualified but some are.
The whole point of having employees is so that they generate more income, directly or indirectly, than is expended on them. Otherwise, what's the point of keeping them employed? Again, it's rare that you're going to earn a lot more than you do now at the same job you're doing now. So the two best avenues to seeing your income increase is to get promoted or to start your own business.
The stock traders make what they do because they know what buttons to push and when.
No, they make so much money because they control money. People who control lots of money always make lots of money. They can make sure of that.
I worked for a Wall Street firm for a couple of years. My experience there is that the IT folks are overlooked as being an integral part of the success and failure of the company. For example, traders would be upset if their bonuses weren't equivalent to at least their annual salaries. Us IT folk, however, were lucky to see a bonus check that was equivalent to about twice our bi-weekly paychecks.
In my exit interview, I told the person straight up... we're the ones providing the traders with timely data and faster calculations so that they don't have to go back to using a stubby pencil. Start recognizing what the IT people do, because if they all decided to stop working, the traders would be stuck going back to doing their calculations with stubby pencils and would fall so far behind they'd be losing more money than they'd be generating.
Seems like my prediction finally came true.
OCO is Loco
To back this up, as a developer it irks me to no end when a manager comes up to me and asks me to write a program from a design he wrote on a paper napkin over lunch at the Burger King.
First off, with as much money as he makes...eat lunch at a real restaurant!!
Second, my response is that you're going to get a crappy program unless you give a real design, or I do the job you want me to automate long enough from me to actually understand it. I CAN'T AUTOMATE WHAT I DON'T UNDERSTAND!! Finished. End of story.
I have a piece of work that I have to use everyday that was written by a web developer brought in to help "automate" my job. It is such a POS, that it makes the easy stuff hard, and completely ignores the hard stuff. It is not the developer's fault. He didn't understand what I was doing, and just flew off the handle, creating automation where he saw possibilities.
bberens is correct. The people who REALLY know the business, are the one that automate it (correctly).
Aah, change is good. -- Rafiki
Yeah, but it ain't easy. -- Simba
Well, for starters, consider the knowledge such programmers need to have in order to write this software:
* financial systems
* frequency trading
* surpassing existing frequency trading
* high speed interconnects and the understanding of both mathematical programming and SMP utilization
* intimate knowledge of "intelligent systems" and how to improve them using predictive math.
* the ability to solve complex problems and adapt to the changing landscape, quickly, due to the rate of change in the ecosystem
In short, we're not talking about bread and butter programming - this kind of stuff is likely much more difficult than any game programming out there, likely on par with game engine development in many ways. It's not easy, and slouches won't cut it.
Not only that, but they're living in New York. I can live relatively comfortably on less than a third of what it'd take for me to "scrape by" in NY (note, I'm married with children, so I'm not your stereotypical geek): if it's not the high cost of living, it's the taxes on "not welfare receivers" and the constant fees for things like parking, vehicle registration, utilities, etc. A construction worker in NYC makes as much as $80k a year, for crying out loud (slightly over twice what I'm making).
Even if renting a 2-bedroom "Economy" apartment in NYC, I'd likely end up spending more than my entire current salary - just on rent. That place is expensive. Similarly, I'm sure there's someone in Sudan or Somolia or wherever is pissed that those wingers in the US make $7.25/hour (or whatever minimum wage is now) to do food service. What extravagance! That must be why they hate us.
That said, everything about frequency trading makes me ill. I'd be really happy if the so-called traders just fired them all, and the so-called "industry" went tits up. They are using the rough equivalent of ad-clicking bots.
~/ssh slashdot.org ssh: connect to host slashdot.org port 22: too many beers
What exactly are the big risks? If you fail, you turn to your buddies doing well for an "angel investment" and start all over again. If you get caught lying/stealing/cheating, you have to give up about 10% of your hundreds of millions in profit to make the SEC go away.
The people who are investing their money are the only ones taking a risk. If the boss gets greedy and makes a few bad trades, they can kiss a nice chunk of their 401k goodbye. If he does a good job, he'll take 20% of the earnings for himself because he managed to find a couple of sucker programmers willing to write something to do all the work for him.
Don’t be absurd. Most model slashdotters just fly off half-cocked. Sometimes it seems like it’s asking too much that they even read the headlines correctly.
Alexander Peter Kristopeit bought his basement from his mommy for one dollar.
I don't know that I agree. I think this is a very subjective issue. The reality is, the amount of revenue derived partially from these programmers has absolutely nothing to do with what their compensation is or should be. By their rationale, every teller at a bank should have salaries commensurate with that bank's revenue, since they're an element in processing deposits/checks/payments/etc. Hell, the data center I run makes millions every hour, but I don't expect that I should make 7 or 8 figures because of it.
If the Bank Tellers got some percentage of the money they made the bank by working on the counter that would be similar to the rationale proposed/suggested by the programmers. I suspect the the Bank Tellers often get paid more than they personally make for the bank. Also, if a teller decides to leave, the bank won't find it hard to find someone to replace them.
The programmers, on the other hand, are directly increasing the bank's profits by their actions, and if they all left it would be more difficult to replace them (though obviously not impossible!).
These programmers have done exactly the right thing by going it alone. Now they can make the big bucks off the back of their endeavours, but similarly risk making no bucks if it doesn't work. ...
This is just as it should be, and well done to them for making the first leap
Eclectic beats from Leeds, UK
handmadehands.co.uk
Frequency trading could be fixed quickly. The NASDAQ , the NYSE, and the other exchanges could simply say that if you buy a stock you have to hold it for 24 hours. If you think that's too long, I might agree, but I think we can all agree that no value is added by buying/selling a stock in under a second to make a profit. That money is coming from folks who are long-term investors trying to have some sort of retirement.
My brother worked in an industry that used a similar tactic; he along with about five other people were paid $40K per year to do a bunch of manual work which resulted in well over $2M in profit for the company. When they were promised a percentage of the earnings and never received it after two years, they all left and did the same thing on their own.
Now their only downside is that they didn't have the capital that their previous employer did, and therefore couldn't scale their operation immediately to make $2M profit, however they still did quite well for themselves and things kept growing.
In the case of the HFT programmers, what's to stop them from pulling off a malicious "Office Space" tactic (as mentioned below)?
This guy, understandably AC, has insights as one of the participants.
Can we get a "-1 Wrong" moderation option?
Mind you, I met a couple of Swedish software development managers who weren't even 25. Needless to say, they were complete morons at either management or software engineering. One sad, sad trend in Europe is thinking that if you go to college (after which you get your obligatory master's degree or even a doctorate) you'll be guaranteed to fit a manager role. I've had kids coming to interviews for software development positions, with no previous experienge, saying they expected to become managers in 6 months. Why? Because, they said, they went to the right university. It's not even funny. Most rich kids, who can afford turning 28-30 and still be in school, become managers only because they're unfit at anything else, since they totally lack the real world experience. I'm Romanian. I used to have a Croatian girlfriend who told me the same about her country. I now live in France. Guess what, it's the same.
well, there. i think you've found at least one line of distinction yourself.
"lower upper class" is NOT N missed paychecks away from financial ruin
"upper middle class" IS N missed paychecks away from financial ruin.
Good start?
Regards
Adding insult to injury, the industry big bosses, TV pundits and politicians are always screaming bloody murder about our labour laws, claiming they're the most restrictive in Europe (which is a lie).
Interestingly the same lies can be heard here in Sweden as well as in Denmark, Norway and France (don't know about other countries but I suspect the same is true there). It's always the same crap as well "our restrictive socialist labour laws are the worst in Europe and are making us fall behind by punishing business owners" and "Our companies being taxed much worse than businesses in any other European country"...
Greylisting is to SMTP as NAT is to IPv4
Most people miss an important point regarding salaries, and you actually referred to it passingly: Salaries are not given because of how much money you make or how directly you are connected to the money making portion of the business - you are paid for how hard it is to replace you. :) ). What does matter is how hard it is to replace said programmer, and this depends on the complexity of the software he wrote. Maybe he wrote Pacman which is a simple program but brought lots of revenues or maybe he wrote the next version of Office all by himself. I don't know. The latter is very hard to replace and should be paid accordingly, while if the former is being paid 150k, then he should say thank you and STFU.*
The teller in the bank is very important for the bank's profits. If there were no tellers, a significant portion of the bank's revenues would be lost. But, replacing a teller is easy. There are not so many requirements from a teller regarding former education/experience and the on job training is quite easy. On the other extreme, the CEO of the company is very hard to replace. He worked and studied years to be able to do his job (well, ideally) and the on job experience is invaluable and thus makes him hard to replace. When a CEO is replaced there is a period of unsteadiness in the company.
Programmers are somewhere in the middle. It does not matter that they are the one that actually wrote the program. They are part of the profit-making machine in the same way that the marketing person that closed the deal and the catering guy that brought the food are critical to the proper operation of the company (don't know about you, but if the catering stopped catering, then my entire workplace will stop working
Bottom line, throwing numbers like: I make 150k a year while my boss makes 10x is pointless. The important thing is how invaluable you are. If you leaving will cause major problems to the company, they should pay more. If not, than you should stop complaining.
* - Yes, I read the summery, and he codes algorithms for financial institutes, I gave those examples just to clarify my general point. No, I did not RTFA, problems? :)
Whenever in an argument, remember this.
For high-frequency trading you need
a) To have highly realiable servers located right next to the exchange.
b) To be a broker in the exchange so that your trading fees are not the sky-high retail fees that you would have to pay if going through a broker.
c) Money for your systems to trade with, margin calls and such
d) Backoffice systems to deal with things like settlement.
This is the barrier to entry in this business that keeps anybody with the right knowledge to set-up high-frequency trading systems that compete with investment banks and hedge funds.
If you read the article you see that some of these guys have left their banks and setup shop doing high-frequency trading because there is a company that provides them the conditions listed above while they provide the know-how AND this company has a better profit sharing arrangement that the banks/hedge-funds they were working for.
For most exchanges there are no such companies around willing to lower the barrier to entry into this business for knowledgeable people, so there is no easy way for those people to get out on their own and do it without working for a bank.
Dude, you are clueless. When these expert traders f up they still get their money. It might take months or years for their bad choices to surface but in the meantime they get their commissions and bonuses. Do you think they pay that money back????
OK, let's say you have an extra $20 million to invest in the market. Are you going to invest via the broker that f'ed up months or years ago (now that their bad choices have surfaced), or are you going to invest in the guy(s) that have a good track record? Of course, you're not going to go with the guy that has made bad choices. Your $20 million, plus the thousands of other investors with extra cash laying around that will make the same decision you do, mean millions in lost commission from the guy that screwed up, even if he was paid for the original screw up.
Next, you are a manager at a major financial trading firm. You got a guy in the trenches making decisions that have cost your clients millions or even billions. When your clients lose money, they don't have extra cash to invest in the future, meaning your company loses money and YOU lose money. How long are you going to keep this guy around? Is he going to be one of the guys you give bonuses to, promote and invite to that dinner party your wife holds to keep busy?
In other words, even if traders make money on bad trades, they will lose money, possibly all of it, in the long run if they make bad trades. It takes several "attaboys" to make up for each "Oh sh*t".
There is no "I disagree" mod for a reason. Flamebait, Troll, and Overrated are not substitutes.
That's the only way to get the superstars... I ALWAYS am the guy looking for the next job. Why? because asshole executives dont promote high skill tech people... they want to keep them where they are at. So I jump ship every 3-5 years to get my own promotion and pay raise. It is the way most sucessful people climb the ladder.
Honestly only a complete fool is loyal to the company. Because the company is never EVER loyal to you.
Do not look at laser with remaining good eye.
Also, there is an increasing tendency in American business culture to undervalue the PhD as a foreigner or nerd degree and require anyone who makes real money to have an MBA.
I don't think that's an "increasing tendency", I think that's a solid fact. Without doing much real research (since we all know facts hold far less weight than our own opinions and gut feelings, right?), I'm willing to bet that of the top, say, 500 richest people in the country (who have a degree at all), you'll be lucky to find more than a handful of PhD's, but plenty of MBAs. I've never heard anyone mention Dr. Bill Gates, Dr. Sam Walton, Dr. Warren Buffet, or Dr. Larry Ellison...
Honorary degrees aside.
ad astra per alia porci
I would disagree. These high frequency trades add liquidity and depth to the market.
I work for a investment company that offers plain vanilla products [Mutual Funds, Life Insurance, etc.] to average people.
20 years ago when we traded shares the bid/ask spread was between 12.5 to .25 cents. Now it is routinely lower then a penny.
When we bought or sold we knew we were going to affect the market – and not in our favor.
In short, our trading costs [both direct and indirect] have fallen by over 80% because the market is so much more efficient and deeper then when it was. These savings get passed to our investors. This is true for the industry as a whole.
http://www.npr.org/templates/story/story.php?storyId=127747626
JOFFE-WALT: This is Steve Rubinow with the New York Stock Exchange, and he says if you want to sell something, you want to buy something, those high-frequency computer are there to sell and buy from you.
Mr. RUBINOW: Which makes for a fairer market for all participants, both the people that are up to their necks in it, and people like you and me as retail customers. Those prices are about as fair as they can be.
JOFFE-WALT: No way, says Kevin Cronin. He works for Invesco. And Cronin is more like what you think of as a regular investor - manages big pension funds and mutual funds. And he says high-frequency computers watch what he does. When he starts to buy, the computers swoop in and start to buy as well, and then sell at a higher price minutes, sometimes even seconds later.
Mr. KEVIN CRONIN (Director, Invesco Global Equity Trading): They dont care about the stocks. All they care about is jumping in front of us and making a penny or two, and doing that millions of times a day.
JOFFE-WALT: That seems annoying to you. But why is that...
Mr. CRONIN: Of course it's annoying.
JOFFE-WALT: Oh, but why is that wrong?
Mr. CRONIN: What are they doing to provide anything in the marketplace other than trying to take the information that our orders give and try to profit themselves?
JOFFE-WALT: Now, high-frequency traders counter that anyone can pay to get access to that information and that speed.
The programmer who writes the algorithm is, in many of these firms, the main driver of profits
Incorrect, and this is the reason you (and several others) are missing the point. You are assuming (with no evidence to back up your claim) that these algorithms are essentially the "machine" that makes the money. You're completely overlooking the various infrastructure and investment that it takes to make these things happen. I don't have the energy to list the many, many components that must exist to have a successful brokerage firm, but suffice to say, it's far more than just algorithms, otherwise any programmer worth his/her salt would be making a killing on Wall Street.
Your logic is like telling Edison he doesn't deserve the bulk of profits from the light bulb
That's right! Edison wouldn't have inherently deserved the lion's share of any/all revenues derived from various companies making/selling/using his invention "the lightbulb". If he invented it, but Sylvania makes millions of them in their factories, then sells them via Sears, where they are bought by customers who install them in their homes in fixtures made by various light fixture manufacturers, and power then from various electrical utility providers, Edison should not be entitled to a piece of each part of the chain's profits.
This really isn't that difficult. As others have pointed out, it's a combination of how difficult it would be to replace a person combined with their measurable/demonstrative monetary contributions to a company that determine the salary. The issue with these programmers is that the profits seem high because this is a game of scale, not profit margin. The big brokerage firms are making big bucks on millions and millions of very tiny profit margins. However, they're also taking on all the risk, putting up all the money, and providing all of the other parts of the working machine (employees, facilities, communication, etc).
And so it says that they did the right thing: they left their crappy, thieving jobs and started their own firms. They're still only making about their old salaries, but they're calling the shots and the sky's the limit. This is why ethical capitalism RULES.
Gamingmuseum.com: Give your 3D accelerator a rest.
This is supported by a significant amount of labor economics research. (At least the pay part). The majority of increase in income comes nearer to the start of the career than the end and from changes in jobs/companies rather than promotion in place.
As for the behavior of the companies: If something is promised get it in writing. If they don't want to give it to you in writing you were never going to get it in the first place. Corporations are not people and don't have memories outside of what is written down and can be discussed in a courtroom. Any individual who promises you anything can get hit by a truck or replaced with a moron and then promise is gone.
Your Econ-101 course would have been improved by including a copy of Animal Farm. In the lost epilogue, the pigs mint coinage to invest German efficiency into everything they were doing already.
The principle you seem to be ranting on here is that voluntary transactions create wealth, no matter how the transaction is instrumented (coins, jars of pebbles, jiggling twins).
Monopoly is the word we use to describe the situation where voluntary rubs noses with indentured servitude. If there's only one place to purchase food, well, no-one is forcing you to chose survival.
In high speed computing one tends to compute bisection bandwidth: given any way of partitioning the system, what is the maximum bandwidth across the partition boundaries.
The concept of monopoly is similarly fungible. The banking industry has sliced up the economic system so that one partition (the high velocity insiders) have access to first-mover advantage, and everyone else doesn't. One term in what constitutes voluntary trade has been supremely tilted in favour of a group that isn't working nearly as hard as they ought to relative to the resources they command, even if it does, as you point out, greatly enrich Columbian farmers who would otherwise have to grow vegetables.
If the glorious concentration of wealth directed equated to aggregate productivity, Russia would be a model economy.
I will say your recitation of why money in and of itself can't be blamed was superbly rendered.
On the other hand, somehow you didn't manage to notice that typing the query "apple suicide" into Google no longer brings up a fairy tale: it brings up Foxccon in the "I feel lucky" position.
Now that you are in a senior position, do you insure that people below you are generously paid? How much of a pay increase would you be willing to forgo in order to reward the people underneath you who contribute to your success?
-rd