4 ms·

>Can you imagine human potential if it was somehow applied to crop harvesting efficiency, new medicines, etc? How is finance not exactly that?

vintermann 8mo ago
Isn't Jane Street mostly into HFT arbitrage?
- JasonADrury 8mo ago
  You need market makers like Jane Street to have well functioning markets. The markets have shown themselves to be an excellent way of applying human potential to things like crop harvesting efficiency, new medicines.
  - throwaw12 8mo ago
    Markets existed before HFTs, they will exist without them as well.
    - JasonADrury 8mo ago
      Did I suggest otherwise?
- tux3 8mo ago
  There's that, but the market in the West was already over-saturated with HFT arbitrage. What's hot is growing markets that get a little less attention. The big Jane Street maneuver in India made a lot of noise recently. They've been "banned" for "market manipulation", but that was one of their biggest play to date.
ViscountPenguin 8mo ago
As someone who has worked in the industry, I've yet to see any compelling argument that high frequency quants are making any meaningful contribution to society. Maybe on the low frequency end, but slightly higher market liquidity doesn't serve that large a social good imo.
- JasonADrury 8mo ago
  High frequency quants almost certainly don't directly provide a massive social good, but they're one of the many facilitators enabling the smooth functioning of markets that do. But FWIW, the comment I was replying didn't seem to be specifically critical of high frequency quants. Dismissing the entire field as something that doesn't contribute to society is beyond absurd.
  - ViscountPenguin 8mo ago
    The context of the comment being a Jane Street blog post is why I singled out HFT. I think we're probably roughly in alignment w.r.t. other forms of finance, but the market liquidity gained by a marginal HFT employee almost certainly isn't worth the marginal cost imo. Even in finance, you could do a lot better by expending that human capital into optimising the structure of the markets themselves (there's lots of research on how hideously inefficient the TSE is because of its coarse tick sizes, for example; but vested interests get in the way of fixing that).
  - throwaw12 8mo ago
    > facilitators enabling the smooth functioning of markets that do Do you think without HFT markets stop functioning properly? What if they are one of the contributors of highly inflated valuations?
    - cheonn638 8mo ago
      [dead]
    - vecter 8mo ago
      HFT doesn't inflate or deflate any valuations. They operate at the market microstructure level and provide liquidity. HFT firms have no impact on the long-term value of assets.
      - patmorgan23 8mo ago
        HFTs can siphon away profits from the people actually doing good investing, but Not all HFT is created equal. There have been some pretty high profile instances where HFTs have increased market volatility and caused a "flash crash". HFTs that trade at the microsecond scale probably aren't valuable to society.
sigwinch 8mo ago
The Rockefeller and Ford foundations funded the most successful crop improvement programs. I imagine finance tried to persuade them to use that money somewhere else.
saghm 8mo ago
I think I have a very different idea of what "exactly" means; I would expect set equality, but at best you're using it to describe a massive superset.
- JasonADrury 8mo ago
  Modern financial system is the single greatest invention in the history of man for pushing resources towards things like "crop harvesting efficiency, new medicines, etc"
  - saghm 8mo ago
    My point is that it also pushes quite a bit of resources towards things that are not nearly as useful as those, so claiming it's "exactly that" is like claiming that animals in a zoo with tusks are "exactly" the walruses that they have and ignoring all of elephants in the room.

vintermann 8mo ago

Isn't Jane Street mostly into HFT arbitrage?

JasonADrury 8mo ago
You need market makers like Jane Street to have well functioning markets. The markets have shown themselves to be an excellent way of applying human potential to things like crop harvesting efficiency, new medicines.
- throwaw12 8mo ago
  Markets existed before HFTs, they will exist without them as well.
  - JasonADrury 8mo ago
    Did I suggest otherwise?
tux3 8mo ago
There's that, but the market in the West was already over-saturated with HFT arbitrage. What's hot is growing markets that get a little less attention. The big Jane Street maneuver in India made a lot of noise recently. They've been "banned" for "market manipulation", but that was one of their biggest play to date.

ViscountPenguin 8mo ago

As someone who has worked in the industry, I've yet to see any compelling argument that high frequency quants are making any meaningful contribution to society. Maybe on the low frequency end, but slightly higher market liquidity doesn't serve that large a social good imo.

JasonADrury 8mo ago
High frequency quants almost certainly don't directly provide a massive social good, but they're one of the many facilitators enabling the smooth functioning of markets that do. But FWIW, the comment I was replying didn't seem to be specifically critical of high frequency quants. Dismissing the entire field as something that doesn't contribute to society is beyond absurd.
- ViscountPenguin 8mo ago
  The context of the comment being a Jane Street blog post is why I singled out HFT. I think we're probably roughly in alignment w.r.t. other forms of finance, but the market liquidity gained by a marginal HFT employee almost certainly isn't worth the marginal cost imo. Even in finance, you could do a lot better by expending that human capital into optimising the structure of the markets themselves (there's lots of research on how hideously inefficient the TSE is because of its coarse tick sizes, for example; but vested interests get in the way of fixing that).
- throwaw12 8mo ago
  > facilitators enabling the smooth functioning of markets that do Do you think without HFT markets stop functioning properly? What if they are one of the contributors of highly inflated valuations?
  - cheonn638 8mo ago
    [dead]
  - vecter 8mo ago
    HFT doesn't inflate or deflate any valuations. They operate at the market microstructure level and provide liquidity. HFT firms have no impact on the long-term value of assets.
    - patmorgan23 8mo ago
      HFTs can siphon away profits from the people actually doing good investing, but Not all HFT is created equal. There have been some pretty high profile instances where HFTs have increased market volatility and caused a "flash crash". HFTs that trade at the microsecond scale probably aren't valuable to society.

sigwinch 8mo ago

The Rockefeller and Ford foundations funded the most successful crop improvement programs. I imagine finance tried to persuade them to use that money somewhere else.

saghm 8mo ago

I think I have a very different idea of what "exactly" means; I would expect set equality, but at best you're using it to describe a massive superset.

JasonADrury 8mo ago
Modern financial system is the single greatest invention in the history of man for pushing resources towards things like "crop harvesting efficiency, new medicines, etc"
- saghm 8mo ago
  My point is that it also pushes quite a bit of resources towards things that are not nearly as useful as those, so claiming it's "exactly that" is like claiming that animals in a zoo with tusks are "exactly" the walruses that they have and ignoring all of elephants in the room.