4 ms·
....where the time frame involved is 17 years from 2000 until now. It's also weird that they don't mention the about to be dismantled Dodd-Frank Act (Volker R
by chollida1 10y ago
....where the time frame involved is 17 years from 2000 until now.
It's also weird that they don't mention the about to be dismantled Dodd-Frank Act (Volker Rule) that forced most sell side firms out of prop trading.
I guess the headline, "computers replace humans for the most mundane and rules based tasks" doesn't grab headlines as much:)
One other interesting tidbit
> Some 9,000 people, about one-third of Goldman’s staff, are computer engineers.
Goldman has always had a larger focus on tech than most other sell side firms, and that says alot given how much they all put into their technology, but a full 1/3 of all employee's sends a very strong signal of how much they value their tech.
Interestingly, it might have been those traders that slowed the progress of the firm in the early 2000's. You can argue, and I've talked to former GS people who made this argument to me, that having the existing traders really slowed down GS in the march towards high speed trading. Michael Lewis's also makes this point in his Flash boys book.
And not to put too fine of a point on it, but replacing a trader making $1,000,000 a year because he has a direct PnL with a 1/3 of an engineer making 1/2 of that, because the algo has the Pnl not the trader, is a big win for the bonus pool available to management:)
- SilasX 10y ago>>Some 9,000 people, about one-third of Goldman’s staff, are computer engineers. Is that right, or is that just a confused journalist? Computer engineers? As in, hardware design so they can shave off nanoseconds here and there? Or do they just mean programmers of any kind here?
- kevin_thibedeau 10y agoConfused journalist, although all of the major firms do employ EEs and CEs to develop HFT hardware.
- dx034 10y agoProbably right, just poorly worded. It's not just engineers, it's all staff in tech. Most of them will have a CS degree (or similar). Nearly none of them will develop trading algorithms. It's mostly about maintaining systems, fixing problems, updating regulatory changes, integrating third party data, etc. Having a third of headcount in tech is not unusual for a bank nowadays.
- maxxxxx 10y ago"And not to put too fine of a point on it, but replacing a trader making $1,000,000 a year because he has a direct PnL with a 1/3 of an engineer making 1/2 of that, because the algo has the Pnl not the trader, is a big win for the bonus pool available to management:)" Even better if you can outsource that engineer to India after a while :-)
- B1FF_PSUVM 10y agoBonusgasm ...
- dx034 10y agoHaving 1/3 of headcount in tech is completely normal for most banks and other financials (except retail banking). If you count all contractors and outsourced areas it'll probably be closer to 40-45%. But most of that will be maintenance, rule checking, data entry, implementing regulatory changes, etc. Only a tiny amount of those will develop algorithms or work close to trading.