Computers, Philosophy, Topical

Brains and Computers

We have a perfect parallel between brains and computers. We can easily think of the brain as the hardware and mind or consciousness as the software or the operating system. We would be wrong, according to many philosophers, but I still think of it that way. Let me outline the compelling similarities (according to me) before getting into the philosophical difficulties involved.

A lot of what we know of the workings of the brain comes from lesion studies. We know, for instances, that features like color vision, face and object recognition, motion detection, language production and understanding are all controlled by specialized areas of the brain. We know this by studying people who have suffered localized brain damage. These functional features of the brain are remarkably similar to computer hardware units specialized in graphics, sound, video capture etc.

The similarity is even more striking when we consider that the brain can compensate for the damage to a specialized area by what looks like software simulation. For instance, the patient who lost the ability to detect motion (a condition normal people would have a hard time appreciating or identifying with) could still infer that an object was in motion by comparing successive snapshots of it in her mind. The patient with no ability to tell faces apart could, at times, deduce that the person walking toward him at a pre-arranged spot at the right time was probably his wife. Such instances give us the following attractive picture of the brain.
Brain → Computer hardware
Consciousness → Operating System
Mental functions → Programs
It looks like a logical and compelling picture to me.

This seductive picture, however, is far too simplistic at best; or utterly wrong at worst. The basic, philosophical problem with it is that the brain itself is a representation drawn on the canvas of consciousness and the mind (which are again cognitive constructs). This abysmal infinite regression is impossible to crawl out of. But even when we ignore this philosophical hurdle, and ask ourselves whether brains could be computers, we have big problems. What exactly are we asking? Could our brains be computer hardware and minds be software running on them? Before asking such questions, we have to ask parallel questions: Could computers have consciousness and intelligence? Could they have minds? If they had minds, how would we know?

Even more fundamentally, how do you know whether other people have minds? This is the so-called Problem of Other Minds, which we will discuss in the next post before proceeding to consider computing and consciousness.

Life and Death, Philosophy, Physics

Pride and Pretention

What has been of intense personal satisfaction for me was my “discovery” related to GRBs and radio sources alluded to earlier. Strangely, it is also the origin of most of things that I’m not proud of. You see, when you feel that you have found the purpose of your life, it is great. When you feel that you have achieved the purpose, it is greater still. But then comes the question — now what? Life in some sense ends with the perceived attainment of the professed goals. A life without goals is a clearly a life without much motivation. It is a journey past its destination. As many before me have discovered, it is the journey toward an unknown destination that drives us. The journey’s end, the arrival, is troublesome, because it is death. With the honest conviction of this attainment of the goals then comes the disturbing feeling that life is over. Now there are only rituals left to perform. As a deep-seated, ingrained notion, this conviction of mine has led to personality traits that I regret. It has led to a level of detachment in everyday situations where detachment was perhaps not warranted, and a certain recklessness in choices where a more mature consideration was perhaps indicated.

The recklessness led to many strange career choices. In fact, I feel as though I lived many different lives in my time. In most roles I attempted, I managed to move near the top of the field. As an undergrad, I got into the most prestigious university in India. As a scientist later on, I worked with the best at that Mecca of physics, CERN. As a writer, I had the rare privilege of invited book commissions and regular column requests. During my short foray into quantitative finance, I am quite happy with my sojourn in banking, despite my ethical misgivings about it. Even as a blogger and a hobby programmer, I had quite a bit success. Now, as the hour to bow out draws near, I feel as though I have been an actor who had the good fortune of landing several successful roles. As though the successes belonged to the characters, and my own contribution was a modicum of acting talent. I guess that detachment comes of trying too many things. Or is it just the grumbling restlessness in my soul?

Life and Death, Philosophy, Physics

Pursuit of Knowledge

What I would like to believe my goal in life to be is the pursuit of knowledge, which is, no doubt, a noble goal to have. It may be only my vanity, but I honestly believe that it was really my goal and purpose. But by itself, the pursuit of knowledge is a useless goal. One could render it useful, for instance, by applying it — to make money, in the final analysis. Or by spreading it, teaching it, which is also a noble calling. But to what end? So that others may apply it, spread it and teach it? In that simple infinite regression lies the futility of all noble pursuits in life.

Futile as it may be, what is infinitely more noble, in my opinion, is to add to the body of our collective knowledge. On that count, I am satisfied with my life’s work. I figured out how certain astrophysical phenomena (like gamma ray bursts and radio jets) work. And I honestly believe that it is new knowledge, and there was an instant a few years ago when I felt if I died then, I would die a happy man for I had achieved my purpose. Liberating as this feeling was, now I wonder — is it enough to add a small bit of knowledge to the stuff we know with a little post-it note saying, “Take it or leave it”? Should I also ensure that whatever I think I found gets accepted and officially “added”? This is indeed a hard question. To want to be officially accepted is also a call for validation and glory. We don’t want any of that, do we? Then again, if the knowledge just dies with me, what is the point? Hard question indeed.

Speaking of goals in life reminds me of this story of a wise man and his brooding friend. The wise man asks, “Why are you so glum? What is it that you want?”
The friend says, “I wish I had a million bucks. That’s what I want.”
“Okay, why do you want a million bucks?”
“Well, then I could buy a nice house.”
“So it is a nice house that you want, not a million bucks. Why do you want that?”
“Then I could invite my friends, and have a nice time with them and family.”
“So you want to have a nice time with your friends and family. Not really a nice house. Why is that?”

Such why questions will soon yield happiness as the final answer, and the ultimate goal, a point at which no wise man can ask, “Why do you want to be happy?”

I do ask that question, at times, but I have to say that the pursuit of happiness (or happyness) does sound like a good candidate for the ultimate goal in life.

Life and Death, Philosophy, Physics

Summing Up

Toward the end of his life, Somerset Maugham summed up his “take-aways” in a book aptly titled “The Summing Up.” I also feel an urge to sum up, to take stock of what I have achieved and attempted to achieve. This urge is, of course, a bit silly in my case. For one thing, I clearly achieved nothing compared to Maugham; even considering that he was a lot older when he summed up his stuff and had more time achieve things. Secondly, Maugham could express his take on life, universe and everything much better than I will ever be able to. These drawbacks notwithstanding, I will take a stab at it myself because I have begun to feel the nearness of an arrival — kind of like what you feel in the last hours of a long haul flight. I feel as though whatever I have set out to do, whether I have achieved it or not, is already behind me. Now is probably as good a time as any to ask myself — what is it that I set out to do?

I think my main goal in life was to know things. In the beginning, it was physical things like radios and television. I still remember the thrill of finding the first six volumes of “Basic Radio” in my dad’s book collection, although I had no chance of understanding what they said at that point in time. It was a thrill that took me through my undergrad years. Later on, my focus moved on to more fundamental things like matter, atoms, light, particles, physics etc. Then on to mind and brain, space and time, perception and reality, life and death — issues that are most profound and most important, but paradoxically, least significant. At this point in my life, where I’m taking stock of what I have done, I have to ask myself, was it worth it? Did I do well, or did I do poorly?

Looking back at my life so far now, I have many things to be happy about, and may others that I’m not so proud of. Good news first — I have come a long a way from where I started off. I grew up in a middle-class family in the seventies in India. Indian middle class in the seventies would be poor by any sensible world standards. And poverty was all around me, with classmates dropping out of school to engage in menial child labor like carrying mud and cousins who could not afford one square meal a day. Poverty was not a hypothetical condition afflicting unknown souls in distant lands, but it was a painful and palpable reality all around me, a reality I escaped by blind luck. From there, I managed to claw my way to an upper-middle-class existence in Singapore, which is rich by most global standards. This journey, most of which can be attributed to blind luck in terms of genetic accidents (such as academic intelligence) or other lucky breaks, is an interesting one in its own right. I think I should be able to put a humorous spin on it and blog it up some day. Although it is silly to take credit for accidental glories of this kind, I would be less than honest if I said I wasn’t proud of it.

Books, Corporate Life, Quantitative Finance

Where to Go from Here?

We started this long series with a pitch for my book, Principles of Quantitative Development. This series, and the associated eBook, is an expanded version of the non-technical introductory chapters of the book — what are the things we need to keep in mind while designing a trading platform? Why is it important to know the big picture of finance and banking? Hopefully, these posts have given you a taste of it here. If you would keep a copy of the series handy, you can purchase and download the beautifully crafted eBook version.

Further steps

We went through the structure of the bank from the exotic and structured trading perspective. We talked about the various offices (Front Office, Middle Office and Back Office) and pointed out the career opportunities for quantitative professionals within. The organizational structure of the bank is the apparatus that processes the dynamic lifecycle of trades.

If the structure of the bank is akin to the spatial organization, the lifecycle of the trade is the temporal variation; their relation is like that of the rails and the trains. We spent quite a bit of time on the flow of the trades between the front office and middle office teams, how the trades get approved, processed, monitored, settled and managed. Each of these teams has their own perspective or work paradigm that helps them carry out their tasks efficiently.

Trade Perspectives was the last major topic we touched upon. As we saw, these perspectives are based on the way the various teams of the bank perform their tasks. They form the backdrop of the jargon, and are important if we are to develop a big-picture understanding of the way a bank works. Most quants, especially at junior levels, despise the big picture. They think of it as a distraction from their real work of marrying stochastic calculus to C++. But to a trader, the best model in the world is worthless unless it can be deployed. When we change our narrow, albeit effective, focus on the work at hand to an understanding of our role and value in the organization, we will see the possible points of failure of the systems and processes as well as the opportunities to make a difference. We will then be better placed to take our careers to its full potential.

Books, Corporate Life, Quantitative Finance

Other Trade Perspectives

In the previous posts, we saw how various teams view the trading activity in their own work paradigm. The perspective that is most common in the bank is still trade-centric. In this view, trades form the primary objects, which is why all conventional trading systems keep track of them. Put bunch of trades together, you get a portfolio. Put a few portfolios together, you have a book. The whole Global Markets is merely a collection of books. This paradigm has worked well and is probably the best compromise between different possible views. The trade-centric perspective, however, is only a compromise. The activities of the trading floor can be viewed from different angles. Each perspective has its role in how the bank works.

Other perspectives

From the viewpoint of traders, the trading activity looks asset-class centric. Typically associated with a particular trading desks based on asset classes, their favorite view cuts across models and products. To traders, all products and models are merely tools to make profit.

IT department views the trading world from a completely different perspective. Theirs is a system-centric view, where the same product using the same model appearing in two different systems is basically two completely different beasts. This view is not particularly appreciated by traders, quants or quant developers.

One view that the whole bank appreciates is the view of the senior management, which is narrowly focussed on the bottom line. The big bosses can prioritise things (whether products, asset classes or systems) in terms of the money they bring to the shareholders. Models and trades are typically not visible from their view from the top — unless, of course, rogue traders lose a lot of money on a particular product or by using a particular model.

When the trade reaches the Market Risk Management, there is a subtle change in the perspective from a trade-level view to a portfolio or book level view. Though mathematically trivial (after all, the difference is only a matter of aggregation), this change has implications in the system design. The trading platform has to maintain a robust hierarchical portfolio structure so that various dicing and slicing as required in the later stages of the trade lifecycle can be handled with natural ease.

When it comes to Finance and their notions of cost centers, the trade is pretty much out of the booking system. Still, they manage trading desks and asset classes cost centers. Any trading platform we design has to provide adequate hooks in the system to respond to their specific requirements as well. Closely related to this view is the perspective of Human Resources, who decide incentives based on performance measured in terms of the bottom lines at cost-center or team levels.

Books, Corporate Life, Quantitative Finance

Middle Office

The perspective employed by the Middle Office team is an interesting one. Their work paradigm is that of queues running in a first-in, first-out mode. As shown in the picture below, they think of trades as being part of validation and verification queues. When a new trade is booked, it gets pushed into the validation queue from one end. The Middle Office staff attacks the queue from the other end, accepting or rejecting each entry. The ones deemed good get into a second verification queue. The bad ones are returned to the trading desks for modifications in the trade entries or possible cancellations.

Middle Office perspective

A similar paradigm is employed in dealing with market operations such as fixing rates, generating cash flow etc. Market operations have their own two-stage queues. Note that the whole flow is to be facilitated by the trading platform, which should have the capability to render different views. It presents a queue-based view of the data to the middle office staff, and a report-based view to the Market Risk Management team, for instance, or a trade-centric view to most of the other teams. It is important to each team to have a basic grasp and healthy respect for the work paradigm of the other so that they can communicate efficiently with each other. It is no good ignoring the trade perspectives of the rest of the bank. After all, such trade perspectives evolved naturally out of years and years of trial and error.

Corporate Life, Work and Life

Are You Busy?

In the corporate world, all successful people are extremely busy. If your calendar is not filled with back-to-back meetings, you don’t belong in the upper rungs of the corporate ladder. Like most things in the corporate world, this feature has also turned on its head. You are not busy because your successful, you are successful because you can project an aura of being busy.

Something I read on the New York Times blog reminded me of an online resource that clearly told us how to look busy. It asked us to watch out for the innocent-sounding question from your colleagues or boss — what are you up to these days? This question is a precursor to dumping more work on your plate. What we are supposed to do, apparently, is to have a ready-made response to this query. Think of the top three things that you are working on. Rehearse a soundbite on what exactly those pieces of work are, how important they are, and how hard you are working on them. Be as quantitative as possible. For example, say that you are working on a project that will make a difference of so many million dollars, and mention the large number of meetings per week you have to attend to chase up other teams etc. Then, when the query is casually thrown your way, you can effectively parry it and score a point toward your career advancement. You won’t be caught saying silly things like, “Ahem.., not much in the last week,” which would be sure invitation to a busy next week. Seriously, the website actually had templates for the response.

Acting busy actually takes up time, and it is hard work, albeit pointless work. The fact of the matter is that we end up conditioning ourselves to actually believe that we really are busy, the work we are doing is significant and it matters. We have to, for not to do so would be to embrace our hypocrisy. If we can fool ourselves, we have absolution for the sin of hypocrisy at the very least. Besides, fooling others then becomes a lot easier.

Being busy, when honestly believed, is more than a corporate stratagem. It is the validation of our worth at work, and by extension, our existence. The corporate love affair with being busy, therefore, invades our private life as well. We become too busy to listen to our children’s silly stories and pet peeves. We become too busy to do the things than bring about happiness, like hanging out with friends and chilling for no purpose. Everything becomes a heavy purposeful act — watching TV is to relax after a hard day’s work (not because you love the Game of Thrones), a drink is to unwind (not because you are slightly alcoholic and love the taste), playing golf is to be seen and known in the right circles (not to smack the **** out of the little white ball) , even a vacation is a well-earned break to “recharge” ourselves to more busy spells (not so much because you want to spend some quality time with your loved ones). Nothing is pointless. But, by trying not to waste time on pointless activities, we end up with a pointless life.

I think we need to do something pointless on a regular basis. Do you think my blogging is pointless enough? I think so.

Books, Corporate Life, Quantitative Finance

Quant Developers

Unlike quants, quantitative developers are more product-centric. Their job is to take the pricing models (the output of the quant effort) and make them deployable and accessible to the traders, sales teams and the middle and back offices. Their primary unit of work is a product because when the product definition changes, regardless of whether it uses a new or an existing pricing model, they have to integrate it into the system. Even if it is merely a product variant, they have to implement all the infrastructure and take care of the approval processes for its downstream handling. For this reason, the work paradigm that makes most sense to a quantitative developer is product-centric.

Quant developer perspective

Compared to the quants, the quantitative developers are closer to the day-to-day activities on Front Office and Middle Office. They view the trades (identified by unique IDs) as instantiations of products. Once booked, they end up in the trading platform database as distinct objects with attributes defined in trade inputs. In addition to trade input, they use market data feeds to price a product in the form of a trade. The trading platform comes with a pricing interface which combines trade information and market data. It also runs in what they call batch mode — regularly at a given time of the day to compute prices and sensitivities of all trades. Since it is the trading platform that performs the batch job, the quantitative developers may take care of the associated resources like the grid computing platforms, market data feeds, trade databases etc. In this respect, their product-centric perspective may get diffused into a trade-centric view.

Humor, Work and Life

Replace Halogen with LED

Here is how it happened. I have a neat custom-built home office. One cool feature of my work area is the recessed lighting built into the top part of it. Three nice LED downlights. Sadly, a couple months ago, one of them started flickering. I ignored it for as long as possible, then decided to take a look. From below, it looked impossible to reach the innards of the light. But I’m not so easily stumped. I can always approach a problem from different angles. So I lugged myself up a ladder and tried the top end of the light, above the top part of the built-up study table. To my surprise, it looked neatly paneled with no access to the lights. How am I supposed to change the bulb or whatever? Lousy workmanship, I said to myself, and proceeded to continue ignoring the flickering light. After all, it was above the kids’ PC, not my iMacs. I’m not saying I was stumped, but you have to pick your battles, you know.

A few days later, it dawned on me — you are not supposed to access recessed lights from above. After all, they are usually in ceilings with no “above.” They are held up there using a clever spring-loaded mechanism, and you can just pull them down. I tried it with the flickering light, and it came down fairly easily. No need to hack up top of the study desk. The workmanship wasn’t that lousy after all. Excellent work, in fact. After pulling the light down, I figured out it was the tiny electronic transformer that was malfunctioning, and ordered one on eBay. (By the way, when I explained this to my son he was thrilled because he thought I had ordered a car that could turn into a giant robot!)

When you buy something from eBay, it is impossible not to browse a little. I saw this deal on 50 LED downlight kits, with everything you’d need for a cool project, at about $12 apiece. The dormant DIY devil in me was stirring. Long story short — I bought the sucka. It showed up at my doorsteps in just two days. (Shipped from China, although I bought it from Australia — globalization of the e-kind, I guess.) And I started replacing all halogen recessed lights in the house with LED ones. It is so easy to do it — just pull the old one down, pull out the old ballast transformer, disconnect it, wire up the new LED light and push it back in. The whole thing takes about five minutes, if there are no complications.

Life, however, is full of complications, and the measure of a man is in how he deals with them. On the first day, it took me about four hours to do about thirty lights. By then, I had blistered fingers. Worse, I got one finger caught in one of those darned spring-loaded thingies (which also work like mouse traps, I forgot to mention) and got it squashed pretty good. And the plaster material from the ceiling acted as some kind of catalyst for infection. Long story short again, I’m just finishing the five-day course of Avelox, a broad-spectrum antibiotic that my GP prescribed after a cursory look at my finger. That’s another thing — why are these doctors getting younger and younger every year?

Anyway, despite all these setbacks, I managed to finish the project in about ten days, after ordering another batch of ten LED kits, and ten LED bulbs to replace some track lighting. I think I established my measure as a man, although I did approach my wife with my battle-worn fingers for sympathy and compassion. She dished them out aplenty, and lovingly called me “nasook” — a Hindi expression I’m not quite familiar with. I have to look it up one of these days — something in her tone makes me wonder, did I lose a bit of my measure?

By the way, the flickering light is still flickering. The three-dollar transformer hasn’t arrived yet.