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Goldman Sachs Automated Trading Replaces 600 Traders With 200 Engineers (technologyreview.com)
Goldman Sach's New York headquarters has replaced 600 of its traders with 200 computer engineers over the last two decades or so, thanks to automated trading programs. (Though, the effort to do so has accelerated over the past five years.) "Marty Chavez, the company's deputy chief financial officer and former chief information officer, explained all this to attendees at a symposium on computer's impact on economic activity held by Harvard's Institute for Applied Computational Science last month," reports MIT Technology Review. From their report: The experience of its New York traders is just one early example of a transformation of Goldman Sachs, and increasingly other Wall Street firms, that began with the rise in computerized trading, but has accelerated over the past five years, moving into more fields of finance that humans once dominated. Chavez, who will become chief financial officer in April, says areas of trading like currencies and even parts of business lines like investment banking are moving in the same automated direction that equities have already traveled. Today, nearly 45 percent of trading is done electronically, according to Coalition, a U.K. firm that tracks the industry. In addition to back-office clerical workers, on Wall Street machines are replacing a lot of highly paid people, too. Complex trading algorithms, some with machine-learning capabilities, first replaced trades where the price of what's being sold was easy to determine on the market, including the stocks traded by Goldman's old 600. Now areas of trading like currencies and futures, which are not traded on a stock exchange like the New York Stock Exchange but rather have prices that fluctuate, are coming in for more automation as well. To execute these trades, algorithms are being designed to emulate as closely as possible what a human trader would do, explains Coalition's Shahani. Goldman Sachs has already begun to automate currency trading, and has found consistently that four traders can be replaced by one computer engineer, Chavez said at the Harvard conference. Some 9,000 people, about one-third of Goldman's staff, are computer engineers.
Vonnegut called it in what, 1955?
why we tolerate these people? I just realized I can't afford a house because of how the mathematics of mortgages work. I never bothered to do the math since I never thought I could buy one. After 10 years of paying down debt and saving I thought I was ready. Not so much. The way mortgage math works out you're paying almost all interest for the first 15 years of a 30 year loan ( stretched to 30 years since these bastards took 20% from me). blah blah blah.
Such it up you clueless millennial whiner. You understand nothing, nothing at all.
Want to pay more principal early on in your loan? Just prepay principal every month or just take a shorter term, like a 15 year, you complete moron.
We would all prefer you just rent though, because you are much too stupid to understand the loan terms. In no time at all you will be going bankrupt and start whining about how the bank made you borrow more than you could afford to repay.
Don't like HOA fees? Well, maybe you might consider buying a home that is not in a community with an HOA? Oh no, that's much too hard. The HOA takes care of your leaves and grass and snow and crap, and you are much too entitled and stupid to either do it yourself or hire someone directly. Call your dad, maybe he will come over and take care of it for you.
This is what colleges graduate. Seriously, you're a moron.
why we tolerate these people? I just realized I can't afford a house because of how the mathematics of mortgages work.
Such it up you clueless millennial whiner. You understand nothing, nothing at all.
Want to pay more principal early on in your loan? Just [...]
Many people will say your problems are due to your own personal choices.
They are not.
Certainly there's a certain group of people who make bad choices and ruin their lives, or who can't seem to get ahead.
But there's another group of people, who we used to call the "middle class", who make intelligent choices but who are on the brink of poverty, or falling into poverty, or generally having a tough time getting ahead.
We see articles here about the rising cost of education, and the answer is always "some people don't need higher education". We see articles about how few jobs there are, and the answer is always "move to where the jobs are". We see articles about outsourcing, and the opinions are "you lose your job, but the population benefits overall due to lowered costs".
We are gutting the middle class in this country, have been for about 20 years, and the overall sentiment is "expect less out of life". Don't expect to own a house, don't expect to send your kids to college, don't expect to live as long, don't expect to get paid more, don't expect to be able to pay your medical bills...
You're ahead of the curve by actually doing the calculations and trying to predict your finances - a lot of people up to 2009 didn't do that, and thought that they could have the same opportunities as people had in the 1980's.
There's lots of people who think everything's fine and will try to pin this back on you, but it's most likely not anything you did.
Don't listen to them.
Things are bad right now, and whether they will get better remains to be seen.
after a) a large scale economic crash caused by deregulation b) several medical problems outside my control (other family members).
The places without HOAs are slums thanks to white flight. We abandon the inner cities and let them all go to shit. The HOAs don't just do that. They maintain a ton of crap that used to be maintained with tax dollars. Again, if I want things that everybody used to take for granted I need to live in ridiculously expensive places. Anything affordable is a hell hole by design.
And read my f'n post you damned troll. I'm bitching _because_ I understand the terms of the mortgage. I understand that I'm paying the interest up front so that the bank gets all of the profit and none of the risk. I pay interest up front because the longer I'm in the house the better the odds my life'll go to shit again when somebody gets sick or my job gets offshored or whatever disaster strikes next. Interest is suppose to be the profit a bank makes for risk. Why the hell are they getting so much damned profit for zero fucking risk?
You say you understand loan amortization but you really do not. It has nothing to do with "up front profit for risk".
I have a $457,000 30 year mortgage at 3.375% fixed. It was a zero point loan with low closing costs.
The monthly payment includes $752 principal and $1287 interest. The interest is tax deductible to me.
This loan has multiple forms of risk:
Repayment risk - I may not repay
Interest rate risk - interest rates could climb (and probably will), but my rate is fixed for 30 years
Capital risk - the money I borrowed today will be worth a lot less in 30 years
Given the above risks would you have lent me $457,000 with a promise to repay you over the next 30 years at about $2000 a month? Would you really see that big $1287 interest as covering all your risks?
Personally I'm happy to have received this loan and I don't see why you think it is such a bad deal. I could have taken a 15 year loan but the monthly principal would have been about $1000 higher and it made more sense for me to put that money to work in the stock market.
Most mortgage lenders make their money on the loan closing, not the loan servicing. Conforming loans are offloaded to Fanny Mae as quickly as they can be. The bank does not want to tie up capital any longer than they have to.
As for the HOA/non HOA "hellhole", my real estate taxes are $1400/month. I bet that's way over whatever you are paying your HOA. The bill has to get paid somehow.
I'd be more impressed if they were putting their AIs to work on macro economics and equity fundamentals analysis and coming up with 3-5 year buy and hold strategies that aligned a company's fundamentals with macro economics to figure out growth patterns.
It seems like a racing team that's given all the money to the guys that get the car down the first straightaway .01 seconds faster than anyone else and forgotten about racing the rest of the track.