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 quant - i.e. quantitative analyst - is somebody uses quantitative or numerical techniques in finance to try to model the value of financial securities and how to structure them. They are often smart math wizards and computer programmers. But in the engine room of our global financial system they designed the financial products that almost crashed Wall st.
Twenty years ago they were not so much; they were all amateurs and it was sort of a free form business. Quant was sort of a derogatory word; they were seen as computer nerds, like very geeky types who didn't really understand the business. There's a lot more respect for quants now. Now, you can be a professional quant.
The credit crunch has shown how the global financial system has become increasingly dependent on mathematical models trying to quantify human (economic) behaviour. Now the quants are back to business in yet another technological revolution in finance: High frequency trading or trading at the speed of light.
A story about greed, fear and randomness from the insides of Wall st.