"Blame the Quants"

Discussion in 'Wall St. News' started by Turhovach, Nov 27, 2008.

  1. I disagree with the whole article, devoid of any substance.

    This was not a LTCM smartest guys in the room fiasco, it was a carnival of dunces begining with Congress, rating agencies, interets rate reset and ordinary people who couldn't pay their mortgage. It was a been there done that slice and dice. The rating agencies should have been on the hook since Enron, just plain old unfinished business on the part of regulators.
     
  2. Your leaving out Wall St I-Bank boys who orchestrated the CDS markets and the the rating agencies/bond insurers.


    Post inet IPO/M&A revenue frenzy wall st was desperate to keep the party going.

    I guess they forgot to leave the party before the cops showed up.

    Oh, and NOW they want to give the $ back. HA!
     
  3. mind

    mind

    first it was wall street. then the hedge funds. then greenspan
    and the agencies. and now the quants.

    and we will find other scapegoats. the fact is that the
    economics as we know it suffers substantial weaknesses.
    bubbles and consequent bursts have accompanied the
    way of capitalism ever since its birth. there is always
    someone to blame and next time it is someone else.

    capitalism achieved a lot. me writing this here right now
    for example. but i believe we have to adapt the principles.
    global warming and the financial crisis show: we are all
    involved and we are all in the game. private consumers
    need to learn that credit requires responsibility. personal
    responsibility. banks have to learn that leverage is a
    thing better handled with a lot of care. the fed has to
    learn that claiming free markets and subsidizing the
    economy with too easy money is a contradiction.

    yes, the quants have to learn lessons too. i serviced
    some people with CDO modeling and i suggested three
    years ago that we incorporate 1930ies stress into the
    analysis. we did that, but they did not like the outcome.
    the idea behind was the fact that all historic default
    studies started in the seventies and there was no period
    of AAA stress in the decades since then. so all models
    assumed that AAA can hardly default at all.

    the thing quants have to learn is to withstand the
    pressure by "business", which is very, very difficult.
     
  4. 4XQs

    4XQs

    Agree - pure nonsense.

    Like the nick - after the philospher :)