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The way I see it is: I like to solve difficult problems, which is why I became an Engineer. But now that I'm older I realize that the Wall Street guys are also
by sendos 16y ago
The way I see it is: I like to solve difficult problems, which is why I became an Engineer. But now that I'm older I realize that the Wall Street guys are also solving a difficult problem, namely how to maximize your returns.
Instead of taking a wireless signal and deciphering what bits were transmitted, you take a stock market signal and decipher where the market will move next.
So, instead of solving engineering problems and getting paid decently, one can solve financial problems and get paid much much more.
If the intellectual stimulation is there in both cases I don't see why someone would choose to be an engineer any more.
- dkasper 16y agoRight on, this is exactly how I see it sendos (see my comment).
- megablast 16y agoYou miss the point were the Wall street guy gets huge bonuses when he succeeds, and you get a nod. Of course, this can't go on. The Wall Street guy doesn't actually create anything, just uses arbitrage to make some cream off of all the dollars these investment banks move around. Or exploit some foreign imbalance. They are the ultimate middle men. You still need actual people to solve the problems in this world. Or will this all be moved off shore?
- dkasper 16y agoThere is a lot more to Wall St than skimming a few dollars office space style off of the stock market. Ever heard of an IPO? It's what software startups dream of! We absolutely need smart minds to go into finance because some sort of economic system must exist and everyone will admit the current one needs improvement. Still, there's not reason to resent people who invest in companies that succeed and make a lot of money doing it. This is almost certainly good for the economy, and I would bet that the majority of people who read HN do the same thing Wall Streeters do on a smaller scale by investing in the market.
- megablast 16y agoAn IPO is an initial public offering. Do you know what that means? Wall street doesn't create anything, it just sells stock to its clients and others. Often it sells stock to clients before the IPO, which it then sells for the clients again when the stock price reaches a certain number. This is one of the reasons Google went for a dutch-style auction process for its IPO, and wall street was pissed, since they couldn't use their usual methods to make money from that. The other things Wall St does is mergers and acquisitions, where they make huge amounts of money on consulting fees. I mean, sure they do a lot more. They increase liquidity in the market, they help companies get loans, but most of it is moving money around, and getting a fee for it.
- tome 16y agoIf it wasn't useful no-one would pay them for it.
- cakesy 16y agoIt is very useful to the people involved, in that they make a lot of money. It may not be useful to the economy, or society.
- isleyaardvark 16y agoJust because someone thinks they're paying for something useful doesn't mean they are paying for something useful.
- aliston 16y agoAt least 20+ years ago Wall Street mostly made money by making available tangible assets to the common investor -- facilitating IPOs and mergers aka "moving money around" does provide for efficient allocation of capital which in turn creates wealth over the long-term. I can understand the argument, then, that bankers are/were providing a service that is beneficial for society. In the last 10 years, though, IPOs have more or less dried up due to Sarbanes-Oxley and M&A activity is only slowly re-emerging. As a result, big banks make most of their profits from larger and riskier trading operations and pumping out intellectual gobledeegook like the CDOs that caused this whole mess. It's this "modern" intellectualized finance stuff that REALLY is just moving around paper junk for profit.
- giardini 16y agoArbitrage is useful and socially beneficial. For example: - it ensures that the cost of goods in separate markets remain aligned, - it creates capital, which can then be invested in other ventures. Markets would be less efficient without arbitrage.
- tmsh 16y agoThe only problem with the financial industry is that after ten years or so you realize that 20% more of 80%* of the minds of people are motivated by a greed that simply doesn't exist in other industries. *I read people's minds.
- jrockway 16y agoIn the other industries, people are motivated by doing just enough work to not get fired, and then reading Facebook all day. Basically, people in general are depressing. That's not a finance thing, that's a human nature thing.