portent

all bondholders are paid - it doesn't matter who owns the bond.

https://www.quora.com/What-happens-to-all-the-bonds-that-the...

I don't think that is right.

The federal reserve can create new US dollars, and it can buy US Treasuries - but this is not the same as redeeming them. The fed becomes just another bondholder that needs paying by the treasury dept. The money goes to the person who previously held the bond as payment for the bond.

Also there is about $20 trillion outstanding public debt, and only $3.3 trillion in the whole money supply, so there is a big gap in money creation needed to pay off the debt. Would tank the currency and kill the economy (think hyperinflation).

https://www.treasurydirect.gov/NP/debt/current

http://www.tradingeconomics.com/united-states/money-supply-m...

In an investment bank a trader has a high ratio of support staff around them: legal, compliance, IT, operations, quants, finance/tax, risk. These 'support' jobs are a significant fraction of the real cost of a trading seat - not just the trader's salary.

Automation has happened incrementally in the industry for years, like many others - starting with the easiest stuff (low hanging fruit) like some operations tasks and mechanical trading tasks, and leaving the more complex tasks for humans - or letting a human scale to do more.

The more complex tasks that are left typically require non-trivial intelligence, e.g. understanding why the new product brought to market by your competitor or counterparty is slightly different to what you are trading today, and deciding if you can/should transact in it. Understanding what impact the upcoming compliance rule changes have on your market and activities (there are always regulatory rule changes). Understanding what the limits of your trading are, to avoid concentrating too much exposure in one area. Understanding why your counterparty is upset about some aspect of the transaction. etc.

The bulk of investment bankers are not picking stocks for funds. In the field of fund management, there are some people doing this, and it is a very common trend that passive indexes do better than the active funds - it is true.

In the field of investment banking trading (which is mostly market making) the amount of automation varies by asset class: very automated for some asset classes like fx, equities, much less for more illiquid asset classes like credit, commodities, bespoke products.

As well, senior traders operate as the 'business' making more decisions than pricing of products. They make the business decisions often judging legal, compliance, accounting risks. (and not always correctly.).

e.g. do you accept to trade with a Dutch counterparty who wants to trade against your German legal entity knowing that you can only hedge the position in London? What is the risk between the two legal setups? What premium should you charge for those risks?

Do you trade the very large size that the counterparty wants, knowing it takes you over your balance sheet position limit - can you get approval for this from your senior management? Can you offset the position in the market without it moving against you? What premium do you charge for this?