The Quants

How the global economy was brought to the brink of collapseQuants' are quantative analysts, and in this narrative of brilliance and ambition, journalist Scott Patterson follows the rise of these young maths geniuses let loose in Wall Street's candy shop as they zoom from the bottom of the Street's pecking order to its pinnacle... and then set in motion ever-widening market catastrophes.The Quants examines the economic collapse on a panoramic level, placing the breakdown of the financial system within the larger context of a world ruled by intellectual hubris. At once a window into the strange world and larger-than-life personalities of Wall Street's most powerful traders, and a chronicle of how a financial sector once known as an elite aristocracy became the playground of the technocrats, this book is much more than a simple 'revenge of the nerds' story. It traces the history of the phenomenon, beginning with a 1950s gambler named Thorp who believed that the markets weren't random, that 'systems' could beat the Street the same way that dealers could be beaten in Vegas, all the way to Thorp's modern-day successors, spilling out of the world's elite technical and business schools bent on using formulae and computers to rule the markets.A story that plays out on the biggest stage imaginable, with characters who have billions of dollars and the world's economy riding on their actions, The Quants explains in its gripping narrative how the global economy was brought to the brink of collapse.

“Mr Patterson is onto a big story that already begs follow-up”

New York Times
... a riveting account Financial Times
The Quants ... radiates with hubris, high stakes and pricey toys Business Week
[an] intriguing history of the Quants...[Patterson] explains how hedge funds combined techniques of arbitrage and hedging using complex computer-driven models (one was named Midas) to reduce the risk of making losing bets -- Stephen Fay TLS
Patterson paints a clear picture of the history and evolution of quantitative trading on Wall Street, before shifting focus to the 'crisis before the crisis' in which a number of quant funds almost collapsed in 2007...definitely worth reading for an in depth analysis of one of the points in recent financial history where things may have started to go awry Insider

Scott Patterson worked for several years as a financial reporter at the Wall Street Journal. He lives in New York.

You're a genius. Nobody plays the financial markets better than you. What could possibly go wrong? Quants - quantitative analysts - were the maths masterminds let loose on Wall Street in the belief that their brilliant, impregnable computer programs would always beat the market. But as the catastrophic events of 2007 and 2008 showed, their seemingly failproof methods were little more than ticking timebombs. Inspired by the 'Godfather of Quants' - maths-professor-turned-gambler Ed Thorp, who began applying skills learned at the Vegas tables to the financial markets back in the 1950s - the Quants achieved extraordinary success and massive wealth. This book charts their rise from obscurity to boom and then to bust, explaining why they were so confident - and how they got it so disastrously wrong.

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