Once upon a time, saying "learn to code" was grounds for immediate suspension from Twitter. It turns out it was perhaps the most sound career advice one could offer.
Yesterday, following news of the latest watering down of the Volcker Rule, which would "permit" banks to engage in the same prop trading they were already doing under the guise of "hedging", we pointed out that the clear winner from this would be not human traders - after all with a recession looming trading would become even more precarious for the various trading desks - but algos.
How many more algos will banks hire now that they don't have to pretend they aren't prop trading— zerohedge (@zerohedge) August 20, 2019
It turns out this question was more apt than expected, because as Bloomberg reported today, Goldman's trading division is planning its biggest hiring spree in years.... but not for traders: "The entire effort is focused on coders, a sign of where Wall Street is headed."
Because as advanced as technology is, those algos won't code themselves into life just yet.
As Bloomberg notes, according to Adam Korn, co-head of engineering in the trading division Goldman is looking to add more than 100 engineers for tech-related roles on the trading floor in the coming month. And since there are apparently not enough people who know how to code currently in the labor force, Goldman plans to raid its rivals in the tech and finance industries, with most of the new positions to be based in New York and London.
“You are going to see us very actively in the marketplace going after this kind of talent,” Korn said. “Historically, engineers were not seen as a part of the business. That’s obviously changed.”
Of course, reading between the lines means that for every coder Goldman hires, it will fire one or more highly paid human traders: "The firm is focused on adding people who can respond to the demands of trading partners seeking to automate, Korn said."
The plan to expand the coding staff at Goldman - which in recent days is best known not for its trading desk but its Apple co-branded credit card which target subprimt borrowers - was approved by the bank's DJing CEO, David Solomon.
“We walked in there with our ‘Shark Tank’-esque plan,” Korn said. “The leadership group was excited and interested and the firm is putting money where its mouth is.”
And why not: not only do coders cost far less than traders, and algos don't demand 10% of all the profits they generate, but the market is one where actual trading skills are not only not rewarded, they are punished by activist central banks.
The hires at Goldman will help continue the build-out of Marquee, a trading and risk-management platform that the firm hopes will translate into a meaningful business line in its trading division.
As part of the wholesale extinction of human traders, Goldman has also been overhauling its electronic-trading platform to serve large quant hedge funds, with an eye toward using advancements in trading tools that could then be deployed across a larger set of business partners. The logic is solid enough: reducing trading time, processing more requests and spitting out faster responses to queries would help generate more trades and more business.
Meanwhile, all those who were banned for daring to tell someone "learn to code" are now vindicated. If only their advice had been heeded, the new codees could be sitting on a beach, making 7 figures at Goldman.