Sunday, December 16, 2007

More on surviving as a quant

Here is another post in the series of surviving and prospering as a quant. John Maudlin, writing in the 14 Dec 2007 edition of his newsletter Thoughts from the Frontline, commented about how the Fed seems to have mis-handled its FOMC statement. The US equity market lurched downwards after the FOMC statement came out at about 2:15pm ET and rallied furiously the next morning on the news of the coordinated central action. John commented that:

By and large, this Fed is a room full of academics that have never "run money," with the exception of Richard Fisher of Dallas who ran a hedge fund at one point in his career. We are in the middle innings of what will be seen by history as the single biggest credit crunch since the 1930's. With the exception of Fed governor Donald Kohn, they have never been in a crisis when they were in the driver's seat.

The Fed is full of people who are far smarter than I am, but there is a difference between book smart and market savvy and a good quant should be both.

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