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"Quantitative analysis has been getting more common in the past 10 years. We had a major crash recently. Therefore Quants caused the crash." This is a very p
by Dilpil 17y ago
"Quantitative analysis has been getting more common in the past 10 years. We had a major crash recently. Therefore Quants caused the crash."
This is a very popular sentiment, yet utterly false. The companies that failed hardest- Lehman, Sterns, Fannie/Freddie, rating agencies- are (were) notoriously non quantitative. They are frequently made fun of in Quant circles in fact. Were any of these companies run by Math Wizards? No. Most of them have (once again, had) zero Quants in their upper management. You cannot blame the failure of such institutions on Quants.
- joe_the_user 17y agoOh you've got me started... A whole of array individuals and idea-systems bare blame for the bubble. From the Quants' model to Alan Greenspan's ideology to the to mark-to-market-accounting to the repeal of Glass-Steagal and onward, they justified what was effectively the largest bubble in history. And given its size, the blame can go many places... Moreover, you're acting like the crisis was just the bankruptcy of a few companies - the ones conveniently without Quants. The crisis has, in fact, hit the entire economy. And moreover, all of Wall Street was effectively bankrupt at the point when Lehman failed. The Fed just chose to throw some trading houses to the wolves and bailed out the rest. If the bailed-out houses thought like you, I wish they'd let them go too. And further, you are not in the least addressing the points in this and other articles, the problems with Black-scholes, the Gaussian Copula and so-forth.
- nazgulnarsil 17y agoi have yet to meet a quant who understands what curve fitting is and why it's bad.
- bdr 17y agoAlright, alright, how many quants have you met, and did you quiz them?
- nazgulnarsil 17y agoI don't know, more than 5. Yes, I always quiz them.