Quants: The Alchemists of Wall Street
7.89
Ratings: 7.89/10 from 80
users.
Quants are the math wizards and computer programmers in the engine room of our global financial system who designed the financial products that almost crashed Wall st.
The credit crunch has shown how the global financial system has become increasingly dependent on mathematical models trying to quantify human (economic) behavior.
Now the quants are at the heart of yet another technological revolution in finance: trading at the speed of light.
What are the risks of treating the economy and its markets as a complex machine? Will we be able to keep control of this model-based financial system, or have we created a monster?
A story about greed, fear and randomness from the insides of Wall Street.
A tyranny of "experts". Interesting and more but actually, purely political, like "climate change". Computer models are very useful in advancing guesses about the future but not very useful, at all, in actually making accurate predictions.
The 2008 meltdown was caused by the finest managerial and financial talent money could buy with the collusion of the government. A couple of bus loads of east Bakersfield gang bangers running the firms and institutions could not have done a worse job. But they probably would have been better at collecting loans. Now the clones of the managers and financial people with the same government collusion are at it again.....
Rubbish.. The crash was due to regulation driving business off shore and excessive credit growth from FED
Another excellent documentary regarding quants, and their impact on the financial markets, and how it is evolving. Works hand in hand with the documentary The Wall Street Code. I advise everyone interested in global economics to check out both these docs.
The idea of mathematicians running the financial world makes absolute sense to me now. Quantifying people's behavior economically or better yet in general makes absolute sense to me as to why the world is in the condition that it finds itself in.
For example, Cisco systems has a commercial where robots are running a factory, when all of a sudden one of the robots break down. Then one of the other robots reach over and repairs that robot.
It left me with a riddle. If the robots, which are the multinational corporations dream employees, can work without break/vacation or sick leave and can even repair one another. WHO WILL BUY THE PRODUCTS? Or better riddle, WHO WILL BE ABLE TO BUY THE PRODUCTS?
Answer No-BOT-y
Seeing as robots are not consumers, and consumers won't have jobs to earn money to purchase products.
Welcome to the machine world. It is synonymous with a mathematical world. A world that does not figure in the main equation, the lives of people, or any other living organism.
But most importantly, It doesn't figure in the equation of GOD &/or JESUS CHRIST!
The scary takeaway from this documentary, even though I live largely by occassionally daytrading in the markerts (so I tend to know a s-load about it as I play with my own money regularly so have to walk a thin line between "Yeah... a holiday!" and "Oh dear! No petrol for car this month!") as well as my more practical day job, is the line;
"there are more people trading derivatives related to commodities than actually growing them"
That must be true, given the numbers in the financial 'industries' (which aren't industries at all since they don't MAKE anything!) compared to the numbers of people in modern farming (which is!).
Scary... maybe we can eat 'quants' when times get hard!
People compain that nobody MAKES anything any more... I think I kinda spotted the reason!
Very interesting. To think I thought I was doing something interesting with a few models concerning corn futures and stock picking. Even experimented with genetic and neural network modeling. These folks are/were in a class by themselves. This was a truely insightful vid. I shall refer over to the Occupy movement as a recommendation. A deeper more clear description of the underlying process and issues involved with machine/corporate access to markets and financial products.
I was looking for a documentary about aliens. Guess I found one.
Thank for the film. I love this kind of documentaries (economy, business related and similar). Well made.
I know what to be done about the .6 thing for human factor relationship. generate numbers close below and above of the exact figure. the problem is not the general .6 .. is just that in real life that will oscillate up and down
These guys on the Street are just a bunch of parasites
TriforceV, algorithmic trading actually provides liquidity to the market resulting in increased efficiency. There is nothing wrong with algo trading, while it is a bit like picking up dimes in front of a bulldozer - people are individuals, allowed to make their own decisions. Don't like it? Move to China.
Want to know the true cause of the current financial problems? Democratic legislators.
BRAVO,BRAVO, an excellant program which I enjoyed watching. I think it took alot of guts for these guys to admit their involvement in the meltdown of the global economy. These so-called financial wizards had very little understanding of the mathematics created by the quants. But more than just the mathematics it was just plain GREED that flushed the global economy down the cesspool.
As the saying goes "Power and Money corrupts", the more wealthy these chumps on Wall St. became, the more GREEDY they became until critical mass was reached. Then BOOM!!!! All hell broke loose.......
Now here we all are, millions of us unemployed, millions of us who lost their homes to foreclosures. What is that saying all ya "It's insanity to do the same thing over and over again, and expect different results."
If Washington D.C. politicians allow Wall St. and all those Financial Institutions to continue with their same old business practices then Americans are doomed to relive the last two years all over again and again and again and again and again and again.....................................................
"What is their contribution to society I wonder?"
They add liquidity to the market, which allows non-automated traders to transact large amounts of equity at a better price than they might normally get.
An excellent documentary outlines the use of technology to exploit opportunity. Just as a factory owner enjoys a new machine to increase profits, now a computing machine has a chance of doing the same thing with the financial markets. The human elements and changing dynamics will need constant attention, but it increases the success level with fewer people just the same. Any gambler will seek ways to improve their odds.
I see no reason to blame this tool, or the creators of it. The banking industry abused their investors in the same manner that a government abuses the taxpayer. A series of major deregulation bills (USA) stimulated reckless behavior. Well paid legislators repealed the laws to eliminate legal penalties. A runaway train with no brakes.
Waldo, you are living on a different planet. You clearly don't understand how democracy and political power is being hijacked by political fraudsters (the Greenspans of this world). See 'Inside Job' and read Noam Chomsky.
Mathematicians over complicating things. Granted the subject matter is difficult, but that guys was being fancy and showing off in my opinion.
Hi RKS,
I just happened on this article, i have no clue how old this article is; but i am adding this comment because i would like to get in touch with you. I am also a prior software engineer, turned trader. I am also interested in algorithms to be successful in my trades. Would like to share our experiences. If you see this commment post here and we can start a discussion, if you are still in interested in algorithm writing.
This is a joke. Nut the realy big joke is that banks have made it so, through central banks, that they, in our current economic market, fail. And hence HAVE to be saved.
In a true capatalist market, these banks who adhered to these ridiculous quant policies go bankrupt, share holders damned compensation, salaries of those responsible are confiscated, and healthy normal thinking banks take over the market. That;s capatalism. What we have now is socialism for banks. Which maasively stimulates their need too take risk even ordanairy people like you an me understand are crazy.
I inform this to you guys, as a software engineer turned trader, and having tried countless aspects to model and create algorithms. They work in the short term, but not one algorithm/model can be characterized for ALL markets as they all change.
I am afraid the documentary may be over-hyped and over portrayed.
It is not so easy as shown. Mathematically modeling the market is a very difficult task. It is trying to model chaos and randomness.
However, trading and making in the market, as a person, is not nearly as difficult as it requires things that are not just a function of previous values, which moreover, have too many parameters to be able to successfully determine what to do.
And about physics guys going into the finance industry. What a waste of money. You can't go into the market with such logic of a physics major, but rather it is a measure of human emotions and gut feeling, which cannot be represented by an equation, as again the model is a function of previous values.
-futures/currency trader
@ Ron
I plan to stay with physics, well actually change over to engineering- a field that heavily depends on physics but is somewhat more practical in my area. I admit the money would be better and I love money like everyone else, but I want a job that I love to go to every day even more. Besides, like you said it all depends on how long it takes this new bubble to burst and this time we can't just blow another one, party has to end sometime. I figure I will actually major in mechanical engineering, this way I get to keep doing the physics I love and my degree is practical- in the sense that it relates to manufacturing which is something I feel we we'll eventually return to. I hope we do anyway. We need to move away from this service related borrow and spend economy back to a manufacturing based earn and save economy. Of course I am no expert so I suppose its all a gamble.
quoting @Imightberiding5
"Thanks for another one Vlatko. Time well spent".
of course
I tend to agree with Ron. Living in a fantasy (unreal money) can only last for so long. Reality will always come back.
Now, from what I've been learning, a lot of the "elite" or people with the most money and who have been influencing/buying politicians and leaders for a while have set their sites on a larger prize: the world.
It is no longer about usurping America's economy, but the world's. They had this all planned out. First drain from the US, then start working with China and the "next big thing" that is coming around the corner.
They have no national pride...they care about wealth and this is the rising new international elite. They are behind a lot of "war on terror" and other conflicts around the globe...even if at a very deep level that few ever realize.