7 ms·

The sick thing about these kind of scams is how much top-tier human talent has been sucked up by the financial sector, essentially to find ways to scam people

The sick thing about these kind of scams is how much top-tier human talent has been sucked up by the financial sector, essentially to find ways to scam people legally (or at least without getting caught). It doesn't say much for society's conception of value that there's more money to be made through finding ways to squeeze more revenue out of socially useless financial transactions rather than by solving real problems.

bob33212 6y ago
It is an unfortunate aspect of capitalism. Making investments is much easier than making actual things, so more people do it. Lucky there is a counter ballance in the system . If 100% of the population started investing only, the one person to start building would get all the investment. You can see it now with TSLA and NKLA. All these "professional investors" realized that sustainable transportation is a real thing and it is our future. At the end of the day Elon could be far richer than any investors.
- hnracer 6y ago
  > Making investments is much easier than making actual things, so more people do it A talented person will make as much money or perhaps more money in software engineering than financial services. Most people in financial services make very little money, 60k-150k being a common range.
  - collyw 6y ago
    I see you have been down voted. It would be nice if you (or the down voters) could provide some evidence either way.
- raziel2701 6y ago
  Are you not aware that NKLA is a fraud company? I don't think that's a good example of what we want people to do.
  - bob33212 6y ago
    Yes, you're right. The point is that there are too many "professional investors" out there and they are chasing fake companies like NKLA as well as real companies like TSLA. But at the end of the day the person with the money is the person that actually makes real things. Not NKLA and not the investors.
- Traster 6y ago
  It’s not only that making investments is easier. Look at my position in the market, I can work in a hedge fund building out their trading platform and earn a minimum of 2-3x what I would earn doing a similar job at an engineering company. Now you would expect that to be the reverse - there is a flood of investors and relatively few people actually making things, so an engineer could be making a premium by making things. That is absolutely not the case though.
hnracer 6y ago
The overwhelming majority of talent in financial services is working to serve paying customers and to trade legitimately and legally on financial markets. There are occasional scams like this in financial services, just as there are occasional scams in any industry. To uniquely demonize financial services as a result is not fair.
- bleepblorp 6y ago
  It was not my intention to malign the huge numbers of rank-and-file FIRE-sector people, like customer service agents across the entire sector, who are just working to put food on their own tables. I'm thinking more of things like hedge funds, HFT outfits, and the groups that devised synthetic mortgage-backed securities, that put ivy league-level talent towards socially useless and/or economically dangerous activities. We'd all be better off if the people with the quantitative and social skills to be effective in these spaces put their talents towards things like carbon capture or battery R&D rather than e.g. finding ways to con people into pouring money into hedge funds that under-perform the markets.
  - hnracer 6y ago
    I don't agree that these are socially useless activities. They need to be done and therefore should be done at scale with the efficiency of automation and the leverage of capital behind it. The alternate reality you imagine, with no hedge funds etc, can not exist. The only alternative reality that can plausibly exist is a significantly more inefficient investing and trading sector that sucks more talent from the economy than it currently does.
    - bleepblorp 6y ago
      What's the social utility of hedge funds? Their business model is to draw in investors who are willing to pay extremely high fees in exchange for the hope of beating the market. In practice, hedge funds underperform the market, so their investors are paying fees for nothing. The only winners are the hedge fund managers. Enriching people for providing negative value to their customers isn't socially useful. Along similar lines, the crowning achievement of the synthetic asset quants was the creation of a mountain of toxic three-card-monte mortgage debt that exploded in 2008, bringing down the global financial system, crashing the world economy, impoverishing hundreds of millions of people, and creating the political environment that lead to both Trump and Brexit. Blowing up the world certainly isn't socially useful. I don't see any downside to reducing the FIRE sector's share of GDP back to what it was in 1960. The economy worked for the median person then; it doesn't work for the median person now, and the amount of wealth the FIRE sector sucks out of the economy to pay for these kinds of games has a great deal to do with that.
roenxi 6y ago
> ... socially useless financial transactions ... But we don't know if that is true. The old societies that didn't have those financial transactions were objectively pretty terrible and not the sort of place any of us would choose to live. We're using the same people as back then the only changes are systems and research. Writing off the major control system is hasty! It isn't always good, but having the smartest people choosing what does/doesn't get financed and what amount of effort to dedicate is, fundamentally, extremely socially valuable. Notwithstanding that this particular case which is a scam in anyone's books.
- rhexs 6y ago
  Yes, the early 90s, back before HFT, was an objectively terrible time. I shudder to think of having to live through them again. Imaging having to pay $5 for a stock trade instead of $0. Life changing.
  - Mandatum 6y ago
    Stock trades still cost $10-15 in most of the world. It onyl affects HFT below a certain threshold. That is, only trades of substantial gain or volume make sense to operate on.
  - roenxi 6y ago
    None of my gadgets or my job category existed in the 90s so I'm happy to call it objectively terrible personally. Plus, globally, compare poverty in Asia then and now and the difference is astounding. That was enabled in no small part by these faceless megacorps.
    - collyw 6y ago
      Are your gadgets what make your life good? Seems bizarre to me. I kind of liked the days before mobile phones when you would arrange to meet someone and they would turn up on time.
      - roenxi 6y ago
bfrog 6y ago
I could say the same about ad tech

bob33212 6y ago

It is an unfortunate aspect of capitalism. Making investments is much easier than making actual things, so more people do it. Lucky there is a counter ballance in the system . If 100% of the population started investing only, the one person to start building would get all the investment. You can see it now with TSLA and NKLA. All these "professional investors" realized that sustainable transportation is a real thing and it is our future. At the end of the day Elon could be far richer than any investors.

hnracer 6y ago
> Making investments is much easier than making actual things, so more people do it A talented person will make as much money or perhaps more money in software engineering than financial services. Most people in financial services make very little money, 60k-150k being a common range.
- collyw 6y ago
  I see you have been down voted. It would be nice if you (or the down voters) could provide some evidence either way.
raziel2701 6y ago
Are you not aware that NKLA is a fraud company? I don't think that's a good example of what we want people to do.
- bob33212 6y ago
  Yes, you're right. The point is that there are too many "professional investors" out there and they are chasing fake companies like NKLA as well as real companies like TSLA. But at the end of the day the person with the money is the person that actually makes real things. Not NKLA and not the investors.
Traster 6y ago
It’s not only that making investments is easier. Look at my position in the market, I can work in a hedge fund building out their trading platform and earn a minimum of 2-3x what I would earn doing a similar job at an engineering company. Now you would expect that to be the reverse - there is a flood of investors and relatively few people actually making things, so an engineer could be making a premium by making things. That is absolutely not the case though.

hnracer 6y ago

The overwhelming majority of talent in financial services is working to serve paying customers and to trade legitimately and legally on financial markets. There are occasional scams like this in financial services, just as there are occasional scams in any industry. To uniquely demonize financial services as a result is not fair.

bleepblorp 6y ago
It was not my intention to malign the huge numbers of rank-and-file FIRE-sector people, like customer service agents across the entire sector, who are just working to put food on their own tables. I'm thinking more of things like hedge funds, HFT outfits, and the groups that devised synthetic mortgage-backed securities, that put ivy league-level talent towards socially useless and/or economically dangerous activities. We'd all be better off if the people with the quantitative and social skills to be effective in these spaces put their talents towards things like carbon capture or battery R&D rather than e.g. finding ways to con people into pouring money into hedge funds that under-perform the markets.
- hnracer 6y ago
  I don't agree that these are socially useless activities. They need to be done and therefore should be done at scale with the efficiency of automation and the leverage of capital behind it. The alternate reality you imagine, with no hedge funds etc, can not exist. The only alternative reality that can plausibly exist is a significantly more inefficient investing and trading sector that sucks more talent from the economy than it currently does.
  - bleepblorp 6y ago
    What's the social utility of hedge funds? Their business model is to draw in investors who are willing to pay extremely high fees in exchange for the hope of beating the market. In practice, hedge funds underperform the market, so their investors are paying fees for nothing. The only winners are the hedge fund managers. Enriching people for providing negative value to their customers isn't socially useful. Along similar lines, the crowning achievement of the synthetic asset quants was the creation of a mountain of toxic three-card-monte mortgage debt that exploded in 2008, bringing down the global financial system, crashing the world economy, impoverishing hundreds of millions of people, and creating the political environment that lead to both Trump and Brexit. Blowing up the world certainly isn't socially useful. I don't see any downside to reducing the FIRE sector's share of GDP back to what it was in 1960. The economy worked for the median person then; it doesn't work for the median person now, and the amount of wealth the FIRE sector sucks out of the economy to pay for these kinds of games has a great deal to do with that.

roenxi 6y ago

> ... socially useless financial transactions ... But we don't know if that is true. The old societies that didn't have those financial transactions were objectively pretty terrible and not the sort of place any of us would choose to live. We're using the same people as back then the only changes are systems and research. Writing off the major control system is hasty! It isn't always good, but having the smartest people choosing what does/doesn't get financed and what amount of effort to dedicate is, fundamentally, extremely socially valuable. Notwithstanding that this particular case which is a scam in anyone's books.

rhexs 6y ago
Yes, the early 90s, back before HFT, was an objectively terrible time. I shudder to think of having to live through them again. Imaging having to pay $5 for a stock trade instead of $0. Life changing.
- Mandatum 6y ago
  Stock trades still cost $10-15 in most of the world. It onyl affects HFT below a certain threshold. That is, only trades of substantial gain or volume make sense to operate on.
- roenxi 6y ago
  None of my gadgets or my job category existed in the 90s so I'm happy to call it objectively terrible personally. Plus, globally, compare poverty in Asia then and now and the difference is astounding. That was enabled in no small part by these faceless megacorps.
  - collyw 6y ago
    Are your gadgets what make your life good? Seems bizarre to me. I kind of liked the days before mobile phones when you would arrange to meet someone and they would turn up on time.
    - roenxi 6y ago

bfrog 6y ago

I could say the same about ad tech