Quants

The Wall Street Journals Scott Paterson has a new book out.

http://www.amazon.com/Quants-Whizzes-Conquered-Street-Destroyed/dp/0307453375/ref
=sr_1_1?ie=UTF8&s=books&qid=1264452360&sr=8-1

I will probably buy it used on Half.com

Looks to be an interesting read.

I have written about the Quants in the past.

http://tradersutra.blogspot.com/2009/10/kill-quants-but-dont-forget-congress.html

http://tradersutra.blogspot.com/2009/03/aig-quants.html

One thing I want to make clear. The Quants were not 100% responsible for the crisis. It was traders and bankers who were 100% seduced by them that were unable to perform their jobs that caused much of the pain. These Quants were rock stars. They were considered Wizards and Magicians by the bankers and media. Goodness! Didn't we learn anything form LTCM?

http://tradersutra.blogspot.com/2009/03/how-ltcm-enabled-sub-prime-meltdown.html

Sadly, most of these guys couldn't find a job in academia, and ended up in Wall Street.

At the end of the day it was a total systemic failure. The core failure of modern financial theories such as EMH and the ones that ardently supported them till the end.

Funny Quote.


“Beware of geeks bearing formulas.”
--Warren Buffett

Yeah Right! Unless you are a geek at Wells Fargo or Moody's. Its OK then.