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Sure, let's blame the computer scientists, not the dangerous Wall Street culture of getting rich quick with essentially regulated gambling. That'll fix things ;

Sure, let's blame the computer scientists, not the dangerous Wall Street culture of getting rich quick with essentially regulated gambling. That'll fix things ;)

rdtsc 17y ago
That is a general tendency of blaming whatever cannot be explained or understood. The primitive men blamed natural phenomena and diseases on the gods and witches. Today we blame it on the nerdy guys with glasses and pocket protectors. When they make money, the financial giants quickly take credit for it: "oh look we are making money, _we_ are so awesome", when the nerdy guys screw up, then they are scapegoated, "oh look, it is those damn nerds and their voodoo, that screwed us."
- whyenot 17y ago
  Some of the "nerdy guys" actually did screw up. They deserve some of the blame. Hopefully in the future quants will be more careful about checking the assumption of their models, especially if it may have repercussions on their reputations and careers. That doesn't mean you don't also blame the others that were involved. There is more than enough blame to go around.
  - rdtsc 17y ago
    When the nerds with their voodoo were making lots of money, the firms didn't say "we don't know what these guys are doing, but they are making us lots of money, they deserve all the credit, they are the heroes", instead the CEOs gave each other big bonuses and pats on the back. But when everything went sour, they blamed the "nerds" (and I admit, nerds did screw up), instead of blaming themselves for not evaluating risk properly. If they couldn't evaluate risk properly (and I think they couldn't), they should have stopped what they were doing. EDIT: syntax errors
  - BrentRitterbeck 17y ago
    Yes, some of them did screw up, the same way that early physicists screwed up. Quantitative finance, as we know it, is still a very young field. There are going to be hiccups along the way. Knowledge is not developed in a vacuum. We had Archimedes looking at physics over 2000 years ago. It took until the late 17th century for Newton to develop the calculus, a tool that allowed us to really start advancing physics. Whether you want to start "quantitative finance" with Black and Scholes, Markowitz, or even Bachelier, we have had at most a little over 100 years of trying to pin this beast down. I think people fail to realize that.

Sure, let's blame the computer scientists, not the dangerous Wall Street culture of getting rich quick with essentially regulated gambling. That'll fix things ;)

rdtsc 17y ago

That is a general tendency of blaming whatever cannot be explained or understood. The primitive men blamed natural phenomena and diseases on the gods and witches. Today we blame it on the nerdy guys with glasses and pocket protectors. When they make money, the financial giants quickly take credit for it: "oh look we are making money, _we_ are so awesome", when the nerdy guys screw up, then they are scapegoated, "oh look, it is those damn nerds and their voodoo, that screwed us."

whyenot 17y ago
Some of the "nerdy guys" actually did screw up. They deserve some of the blame. Hopefully in the future quants will be more careful about checking the assumption of their models, especially if it may have repercussions on their reputations and careers. That doesn't mean you don't also blame the others that were involved. There is more than enough blame to go around.
- rdtsc 17y ago
  When the nerds with their voodoo were making lots of money, the firms didn't say "we don't know what these guys are doing, but they are making us lots of money, they deserve all the credit, they are the heroes", instead the CEOs gave each other big bonuses and pats on the back. But when everything went sour, they blamed the "nerds" (and I admit, nerds did screw up), instead of blaming themselves for not evaluating risk properly. If they couldn't evaluate risk properly (and I think they couldn't), they should have stopped what they were doing. EDIT: syntax errors
- BrentRitterbeck 17y ago
  Yes, some of them did screw up, the same way that early physicists screwed up. Quantitative finance, as we know it, is still a very young field. There are going to be hiccups along the way. Knowledge is not developed in a vacuum. We had Archimedes looking at physics over 2000 years ago. It took until the late 17th century for Newton to develop the calculus, a tool that allowed us to really start advancing physics. Whether you want to start "quantitative finance" with Black and Scholes, Markowitz, or even Bachelier, we have had at most a little over 100 years of trying to pin this beast down. I think people fail to realize that.