Quants: The Alchemists of Wall Street (Marije Meerman, VPRO Backlight 2010)

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) behaviour. 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.

Director: Marije Meerman
Research: Gerko Wessel

Category:

News & Politics

Tags:

• Quants
• algorithms
• math
• models
• finance
• banking
• mortgages
• greed
• technology
• high frequency trading
• programming
• Wall street
• formulas
• Wilmott
• Derman
• Goldstein
• Osinski
• economy
• crisis
• crash
• dark pools
• HFT
• CDO
• CMO
• alchemists

[gcglasser]

I once read an interview with a gold trader and survivor of the Nazi death camps in Forbs. The most interesting he had to relate was that when he was on the train going to the death camp, he saw a guy trade a bag of diamonds for a drink of water.

[SalsaTiger83]

The sad thing is that most people - even in the field themselves - don't get why financial markets benefit the economy. I would hazard a guess that the growth we have seen in the last century, with all the achievements in computers, space travel and even in the arts, would have been impossible without markets. It is a philosophical point, but if you experiment with a simple coin flip game and the "gambler's ruin" idea, you see why quantifying risk is crucial for society.

[vincentyeo88]

at 36:00 you pay more tuition fees and go into debt, and graduate with a degree in Worthlessness or MBA in Corporate Slavery.

when you have the money to lose, you lose it!

[vincentyeo88]

at 25:45 nice watch! you won't wanna lose that digging for seashells.

[MrDitto30]

@gcglasser

that smell like bs to me, if he was on a nazi train rest assured that he did not have any diamonds on him

[warwize]

is the narrator an actor and is his story made up?

[tanysta]

+++

[JessieLydia]

There are very useful natural economy models, that define the necessary change for surviving a growth crisis.

It's to realize that growth is actually a construction process, powered by its own profits. So... the solution to a growth system turning itself into a tower of Babel by overreaching its own ability to manage the complications involved, is to use the system's profits for something better. It's not the kind of thing social thinkers like, but necessary. synapse9-dot-com/signals

[NeoCorporatism]

I don't know how to heal the financial system, but from a bird's eye view I feel like we have enough smart makroeconomics and other people like political scientists who actually could produce some high quality solutions. The problem is our political system is extremely sluggish, different parties fighting over and over until the next crisis appears. We have to make public sector as efficient als private sector, or the private sector will take over the public one.

[killcritter]

The shaky hand-held camera aesthetic is god awful.