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...confessed to him that I had never studied finance, and I had only taken one course in computers This lack of formal qualifications seems common on wall stre

...confessed to him that I had never studied finance, and I had only taken one course in computers This lack of formal qualifications seems common on wall street, perhaps this isn't surprising. I know I didn't want to work as a programmer for a finance company because I'd prefer to be a first class citizen in a software company even for much less money. Perhaps wall street only gets second tier engineers, scientists and mathematicians? I know of one specific case, where yet another person without formal training made it high up as a programmer at a well known large institution who's name I'll withhold. This person was very well compensated for doing the kind of horrific wheel reinventing that only smart people without formal training can do. Needless to say all kinds of wacky hi jinks ensued over that person's years at wall street. In one instance he like all other programmers was forbidden to use malloc. And everything was on the stack and of size 512 - EVERYTHING. Who made that decision? Why the financial managers obviously! And I'm thinking that a big part of wall street's downfall is all that under qualified personnel, there primarily for the money. I think very few quants and people in their positions ever had the confidence and power to stand up to the finance guys. I think if finance firms went to the trouble of hiring people who have better options they might not be in so much trouble. Then again if you're gambling with other people's money and your compensation only has upside, no downside with risk - nothing would have prevented the crash.

Raplh 18y ago
This is not a story about 2nd rate thinking or a mediocre or bad software product. When a freshmen flunks a semester because he got a new video game, it is not because the video game's designers were 2nd rate. And Wall Street attracts people seemingly as smart as you would ever want to be. Read Roger Lowenstein's "When Genius Failed" about how a coupla Nobel Prize winners in econ started a hedge fund (Long Term Capital Management) which blew up spectacularly in 1997. Other smart people knew what they were doing wrong, but that didn't matter to the people who saw how much money they were making over the few years they survived.
- nostrademons 18y ago
  Actually, they knew what they were doing wrong. Merton and Scholes pulled much of their money out a few months before it crashed, walking away with a decent profit (they, of course, lost nearly everything on the money they still had in the fund when it was recapitalized, eating into their returns). That's all in "When Genius Failed" too. Technically they didn't start it either, they were just on the board of directors.
HeyLaughingBoy 18y ago
Not even close! I don't think you'd want to hear it, but whereever a huge amount of money is, you will find some of the world's smartest people. People and businesses don't make such astronomical amounts of money just on sheer dumb luck. They do it by being very smart, knowing the system and analyzing it for maximum profit. Of course, human nature being what it is, wealth can cloud the vision of even the smartest people, leading to the situation we have now. But don't think for a second that Wall St. is populated only by "lower tier" thinking.
- weiser 18y ago
  In Savings and Loan crises of 80s, wall streets banks lost all the money they made during the previous 25 years. In the current crises, I dont know the exact number but it is worse than that. So if you believe that wall street banks actually make any money, you might want to reconsider your view points.
  - HeyLaughingBoy 18y ago
    [shrug] When I die, I'll lose all the money I made over my lifetime, anyway. What's your point?
  - eru 18y ago
    It's not necessarily the banks. Wall Street bankers made a lot of money.
- biohacker42 18y ago
  Point taken, I've always suspected my personal experiences are not an accurate representation of the general case. I'm just wondering if there is a difference between the quants at partnerships where the traders had skin in the game, and the quants where the people who made tons of money had no downside risk?
yummyfajitas 18y ago
Perhaps wall street only gets second tier engineers, scientists and mathematicians?...I think if finance firms went to the trouble of hiring people who have better options they might not be in so much trouble. There are quite a few fantastically smart people on wall street. It's quite easy not to care about being an N-th class citizen (for N >= 2)) when you make $500,000/year before you are thirty. The trick is to be both a first tier programmer/scientist and to be able to put yourself into a situation where those skills matter.
ewjordan 18y ago
You may _think_ that no "real" programmer would ever want to work for a bank when they could instead work for a software company, but that does not make the people working at banks any less talented or competent. It just means they have different priorities than you do.
nostrademons 18y ago
> In one instance he like all other programmers was forbidden to use malloc. And everything was on the stack and of size 512 - EVERYTHING. Who made that decision? Why the financial managers obviously! Many financial software houses operate under very strict latency constraints, where a microsecond or two more means that somebody else got the trade you were going for. I've even heard of hedge funds colocating boxes on the exchange floor so that they can avoid the network delay of sending messages a few blocks to headquarters. In this environment, the cost of dynamic memory allocation can be significant, and garbage collection is most certainly out. Same thing in the avionics industry and other hard-realtime situations: malloc is forbidden because its time complexity cannot be predicted by the programmer. I have no idea if this is why he couldn't use malloc or whether it was plain management stupidity. But the idea is not as absurd as it seems at first.
- deleted 18y ago
  [deleted]
- biohacker42 18y ago
  In this specific case time constraints had nothing to do with that. On other occasions time constrains were a very big deal as were atomic transactions, except that NO one around had heard of the terms real time and atomic transactions. So they did a horrible job of reinventing something like a good DB.

Raplh 18y ago

This is not a story about 2nd rate thinking or a mediocre or bad software product. When a freshmen flunks a semester because he got a new video game, it is not because the video game's designers were 2nd rate. And Wall Street attracts people seemingly as smart as you would ever want to be. Read Roger Lowenstein's "When Genius Failed" about how a coupla Nobel Prize winners in econ started a hedge fund (Long Term Capital Management) which blew up spectacularly in 1997. Other smart people knew what they were doing wrong, but that didn't matter to the people who saw how much money they were making over the few years they survived.

nostrademons 18y ago
Actually, they knew what they were doing wrong. Merton and Scholes pulled much of their money out a few months before it crashed, walking away with a decent profit (they, of course, lost nearly everything on the money they still had in the fund when it was recapitalized, eating into their returns). That's all in "When Genius Failed" too. Technically they didn't start it either, they were just on the board of directors.

HeyLaughingBoy 18y ago

Not even close! I don't think you'd want to hear it, but whereever a huge amount of money is, you will find some of the world's smartest people. People and businesses don't make such astronomical amounts of money just on sheer dumb luck. They do it by being very smart, knowing the system and analyzing it for maximum profit. Of course, human nature being what it is, wealth can cloud the vision of even the smartest people, leading to the situation we have now. But don't think for a second that Wall St. is populated only by "lower tier" thinking.

weiser 18y ago
In Savings and Loan crises of 80s, wall streets banks lost all the money they made during the previous 25 years. In the current crises, I dont know the exact number but it is worse than that. So if you believe that wall street banks actually make any money, you might want to reconsider your view points.
- HeyLaughingBoy 18y ago
  [shrug] When I die, I'll lose all the money I made over my lifetime, anyway. What's your point?
- eru 18y ago
  It's not necessarily the banks. Wall Street bankers made a lot of money.
biohacker42 18y ago
Point taken, I've always suspected my personal experiences are not an accurate representation of the general case. I'm just wondering if there is a difference between the quants at partnerships where the traders had skin in the game, and the quants where the people who made tons of money had no downside risk?

yummyfajitas 18y ago

Perhaps wall street only gets second tier engineers, scientists and mathematicians?...I think if finance firms went to the trouble of hiring people who have better options they might not be in so much trouble. There are quite a few fantastically smart people on wall street. It's quite easy not to care about being an N-th class citizen (for N >= 2)) when you make $500,000/year before you are thirty. The trick is to be both a first tier programmer/scientist and to be able to put yourself into a situation where those skills matter.

ewjordan 18y ago

You may _think_ that no "real" programmer would ever want to work for a bank when they could instead work for a software company, but that does not make the people working at banks any less talented or competent. It just means they have different priorities than you do.

nostrademons 18y ago

> In one instance he like all other programmers was forbidden to use malloc. And everything was on the stack and of size 512 - EVERYTHING. Who made that decision? Why the financial managers obviously! Many financial software houses operate under very strict latency constraints, where a microsecond or two more means that somebody else got the trade you were going for. I've even heard of hedge funds colocating boxes on the exchange floor so that they can avoid the network delay of sending messages a few blocks to headquarters. In this environment, the cost of dynamic memory allocation can be significant, and garbage collection is most certainly out. Same thing in the avionics industry and other hard-realtime situations: malloc is forbidden because its time complexity cannot be predicted by the programmer. I have no idea if this is why he couldn't use malloc or whether it was plain management stupidity. But the idea is not as absurd as it seems at first.

deleted 18y ago
[deleted]
biohacker42 18y ago
In this specific case time constraints had nothing to do with that. On other occasions time constrains were a very big deal as were atomic transactions, except that NO one around had heard of the terms real time and atomic transactions. So they did a horrible job of reinventing something like a good DB.