{"id":2989,"date":"2007-08-18T05:31:00","date_gmt":"2007-08-18T05:31:00","guid":{"rendered":"http:\/\/zmetro.com\/?p=2989"},"modified":"2007-08-18T05:31:00","modified_gmt":"2007-08-18T05:31:00","slug":"the_quants_expl","status":"publish","type":"post","link":"https:\/\/www.zmetro.com\/?p=2989","title":{"rendered":"The Quants Explain Disaster"},"content":{"rendered":"<p><a href=\"http:\/\/select.nytimes.com\/2007\/08\/18\/business\/18nocera.html\">Joe Nocera (Subscription)<\/a>: <\/p>\n<blockquote><p><i>Back in 1998, that now infamous quant fund really did melt down, not only liquidating, but shaking the entire global financial system. Long-Term used complex computer models that failed to anticipate some severe once-in-a-lifetime market events, and it was shockingly leveraged \u2014 it was using $100 of borrowed money for every dollar of its own capital \u2014 which magnified its losses. It was also run by some of the smartest people on Wall Street. \u201cWhen Geniuses Fail\u201d was the apt title to Roger Lowenstein\u2019s fine book about that fiasco.<Br><Br><br \/>\nEver since, whenever quant funds stumble, it\u2019s \u201cWhen Geniuses Fail Redux.\u201d Wall Street wags begin to wonder if those losses will lead to something truly cataclysmic, while newspaper reporters take a certain undisguised glee in reporting on really smart people losing money. Even now, there\u2019s enough Luddite schadenfreude in the air that rumors continue to circulate that AQR is continuing to absorb substantial losses \u2014 which is the exact opposite of the truth, Mr. Asness says.<\/i><\/p><\/blockquote>\n<p>Ritholtz <a href=\"http:\/\/feeds.feedburner.com\/~r\/TheBigPicture\/~3\/145455553\/the-quants-expl.html\">has more here<\/a> and <a href=\"http:\/\/feeds.feedburner.com\/~r\/TheBigPicture\/~3\/145263677\/major-central-b.html\">here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Joe Nocera (Subscription): Back in 1998, that now infamous quant fund really did melt down, not only liquidating, but shaking the entire global financial system. Long-Term used complex computer models that failed to anticipate some severe once-in-a-lifetime market events, and it was shockingly leveraged \u2014 it was using $100 of borrowed money for every dollar [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6,35],"tags":[],"_links":{"self":[{"href":"https:\/\/www.zmetro.com\/index.php?rest_route=\/wp\/v2\/posts\/2989"}],"collection":[{"href":"https:\/\/www.zmetro.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.zmetro.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.zmetro.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.zmetro.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2989"}],"version-history":[{"count":0,"href":"https:\/\/www.zmetro.com\/index.php?rest_route=\/wp\/v2\/posts\/2989\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.zmetro.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2989"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.zmetro.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2989"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.zmetro.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2989"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}