This NY Times article ‘At BlackRock, Machines Are Rising Over Managers to Pick Stocks‘ says it all. Traders are being replaced by machines. Or indeed, by less glamour teams of programmers.
As the article explains this is indeed a defensive move by the bank as “actively” managed funds bringing in high management fees are much less successful nowadays (studies have long shown that the returns of actively traded funds are mostly driven by luck anyway).
It is thus a drive towards lower costs. But due to the traders’ remuneration this move might actually create more programmers jobs than reduce traders jobs!
The interesting part of this situation is that the increasing access to information is making professions that had better access obsolete. This was the case for financial traders, and they do become obsolete, together with their Adrenalin-laden world.
