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(CNN)   Math nerds are taking over Wall St. EVERYBODY ARITHMETIC   (money.cnn.com) divider line 28
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1173 clicks; posted to Business » on 26 Jul 2014 at 5:09 PM (17 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2014-07-26 02:38:09 PM  
facepalm.

"But it's different this time."
 
2014-07-26 03:49:17 PM  
Taking over?  Where has the author been the last ten years?  This is what happens when you demand more STEM majors but won't give them any money to do research.  These guys are wasting an enormous amount of brain power figuring out new ways to move electrons around and pretend that it's wealth.  It's going to blow up in their faces just like it always does, and the country won't have anything to show for it.
 
2014-07-26 04:21:57 PM  
so cnn learns about quants, woo hoo
 
2014-07-26 05:36:06 PM  

Mentat: Taking over?  Where has the author been the last ten years?  This is what happens when you demand more STEM majors but won't give them any money to do research.  These guys are wasting an enormous amount of brain power figuring out new ways to move electrons around and pretend that it's wealth.  It's going to blow up in their faces just like it always does, and the country won't have anything to show for it.


^^This.  Anyone interested should read The Big Short.  Prepare to be dumbfounded at how the so-called experts on Wall Street were clueless about the housing bubble, yet only a handful (fewer than 10 people) figured out the system was flawed.
 
2014-07-26 05:54:12 PM  
What's the beta, Kenneth?
 
2014-07-26 06:05:29 PM  
From its inception until just recently, Wall Street relied on chicken entrails and tarot cards.  But then around 2012 they found out about math.
 
2014-07-26 06:24:25 PM  
Trading for computers, by computers.
 
2014-07-26 06:29:56 PM  
Math nerds are taking over Wall St.


and unless you are an insider, you are not going to like the result..............


http://www.youtube.com/watch?v=kFQJNeQDDHA     (SFW, but not for those who own Stock)
 
2014-07-26 06:46:59 PM  

Gary-L: Mentat: Taking over?  Where has the author been the last ten years?  This is what happens when you demand more STEM majors but won't give them any money to do research.  These guys are wasting an enormous amount of brain power figuring out new ways to move electrons around and pretend that it's wealth.  It's going to blow up in their faces just like it always does, and the country won't have anything to show for it.

^^This.  Anyone interested should read The Big Short.  Prepare to be dumbfounded at how the so-called experts on Wall Street were clueless about the housing bubble, yet only a handful (fewer than 10 people) figured out the system was flawed.




By flawed you mean that Wall Street did not make obscene profits after the financial melt down of 2008??
 
2014-07-26 06:53:31 PM  

Linux_Yes: Math nerds are taking over Wall St.


and unless you are an insider, you are not going to like the result..............


http://www.youtube.com/watch?v=kFQJNeQDDHA     (SFW, but not for those who own Stock)


Heh. There was a 60 Minutes piece about a trading firm that routed competing trades through what they called "the bird's nest": 60 miles of fiber in a box. The time advantage is worth millions.
 
2014-07-26 06:57:57 PM  

TedCruz'sCrazyDad: Gary-L: Mentat: Taking over?  Where has the author been the last ten years?  This is what happens when you demand more STEM majors but won't give them any money to do research.  These guys are wasting an enormous amount of brain power figuring out new ways to move electrons around and pretend that it's wealth.  It's going to blow up in their faces just like it always does, and the country won't have anything to show for it.

^^This.  Anyone interested should read The Big Short.  Prepare to be dumbfounded at how the so-called experts on Wall Street were clueless about the housing bubble, yet only a handful (fewer than 10 people) figured out the system was flawed.


phamwaa: Linux_Yes: Math nerds are taking over Wall St.

Heh. There was a 60 Minutes piece about a trading firm that routed competing trades through what they called "the bird's nest": 60 miles of fiber in a box. The time advantage is worth millions.


It's not incompetence that's breaking the system, it's the High Frequency Traders aka the Flash Boys

http://bitsofbooks.com/flash-boys.html

Taxing investors to the tune of $20b pa without adding any value
 
2014-07-26 07:36:00 PM  
i.imgur.com

Outstanding flick.
 
2014-07-26 08:02:13 PM  

Linux_Yes: Math nerds are taking over Wall St.


and unless you are an insider, you are not going to like the result..............


http://www.youtube.com/watch?v=kFQJNeQDDHA     (SFW, but not for those who own Stock)


Don't worry. Pelosi ensured that Congress can all be insiders once more.
 
2014-07-26 08:03:38 PM  

Dusk-You-n-Me: [i.imgur.com image 486x720]

Outstanding flick.


By strange coincidence, I just watched that movie today on demand. A very good movie.

/Demi Moore always looks better when she isn't trying to play a slut or woman half her age.
 
2014-07-26 08:23:27 PM  

mjjt: TedCruz'sCrazyDad: Gary-L: Mentat: Taking over?  Where has the author been the last ten years?  This is what happens when you demand more STEM majors but won't give them any money to do research.  These guys are wasting an enormous amount of brain power figuring out new ways to move electrons around and pretend that it's wealth.  It's going to blow up in their faces just like it always does, and the country won't have anything to show for it.

^^This.  Anyone interested should read The Big Short.  Prepare to be dumbfounded at how the so-called experts on Wall Street were clueless about the housing bubble, yet only a handful (fewer than 10 people) figured out the system was flawed.

phamwaa: Linux_Yes: Math nerds are taking over Wall St.

Heh. There was a 60 Minutes piece about a trading firm that routed competing trades through what they called "the bird's nest": 60 miles of fiber in a box. The time advantage is worth millions.

It's not incompetence that's breaking the system, it's the High Frequency Traders aka the Flash Boys

http://bitsofbooks.com/flash-boys.html

Taxing investors to the tune of $20b pa without adding any value


Hft only affects theist Hft who are also trying to get an edge
 
2014-07-26 08:28:16 PM  
Hey geni
 
2014-07-26 08:49:20 PM  
The story about finance that he began to tell in his first book, Liar's Poker, the exuberant and uproarious account of his time as a bond salesman at Salomon Brothers, and continued with his credit crunch book, The Big Short, is getting steadily darker. In the prologue to The Big Short, Lewis wrote that when he sat down to write his first book, 'I hoped that some bright kid at Ohio State University who really wanted to be an oceanographer would read my book, spurn the offer from Goldman Sachs, and set out to sea.'

Instead, and of course, 'six months after Liar's Poker was published, I was knee-deep in letters from students at Ohio State University who wanted to know if I had any other secrets to share about Wall Street. They'd read my book as a how-to manual.'


After finishing Flash Boys, I found it hard not to think about those missing oceanographers, the computer geniuses and engineers and physicists and entrepreneurs, all those brilliant minds, all that passion and energy disappearing into the black hole of money, lost to all the more productive and interesting things that we humans can do.

It's hard not to feel a sense of loss when you think of what these people would have done, if they hadn't been sucked into the enterprise of making money out of money. If we ever get enough distance to look back with some sense of perspective on the delirium of modern finance, I think this is what will stand out clearly: that sense of human and intellectual waste.
 
2014-07-26 09:42:05 PM  

Gary-L: Mentat: Taking over?  Where has the author been the last ten years?  This is what happens when you demand more STEM majors but won't give them any money to do research.  These guys are wasting an enormous amount of brain power figuring out new ways to move electrons around and pretend that it's wealth.  It's going to blow up in their faces just like it always does, and the country won't have anything to show for it.

^^This.  Anyone interested should read The Big Short.  Prepare to be dumbfounded at how the so-called experts on Wall Street were clueless about the housing bubble, yet only a handful (fewer than 10 people) figured out the system was flawed.


Gee, it was a bubble. Obviously most people were clueless about it or IT WOULDN'T HAVE BEEN A farkING BUBBLE!!! You know who else was "clueless" about it? Millions and millions of borrowers and homebuyers worldwide who bought homes, inflating the bubble. As well as the fed who kept interest rates too low and Fannie Mae and Freddie Mac who kept loaning record amounts.
 
2014-07-26 10:43:14 PM  

Debeo Summa Credo: Gary-L: Mentat: Taking over?  Where has the author been the last ten years?  This is what happens when you demand more STEM majors but won't give them any money to do research.  These guys are wasting an enormous amount of brain power figuring out new ways to move electrons around and pretend that it's wealth.  It's going to blow up in their faces just like it always does, and the country won't have anything to show for it.

^^This.  Anyone interested should read The Big Short.  Prepare to be dumbfounded at how the so-called experts on Wall Street were clueless about the housing bubble, yet only a handful (fewer than 10 people) figured out the system was flawed.

Gee, it was a bubble. Obviously most people were clueless about it or IT WOULDN'T HAVE BEEN A farkING BUBBLE!!! You know who else was "clueless" about it? Millions and millions of borrowers and homebuyers worldwide who bought homes, inflating the bubble. As well as the fed who kept interest rates too low and Fannie Mae and Freddie Mac who kept loaning record amounts.



Not really, but keep trying.  Wall Street created the monster but had absolutely no clue what it had created nor any idea how it was being fed.  The people who figured it out even confronted the Biggest of the Big regarding the faulty risk assessment formulas and all the Wall Street guys did was brush them off.  No one took notice until the first wave of subprimes started to collapse.

Read the book.
 
2014-07-27 01:21:59 AM  
I'm told that back in the early 90's you could go to JFK after a flight from Moscow with a Russian interpreter and get your pick of physicists, concert pianists, or dancers for a bargain basement price.
 
2014-07-27 01:53:14 AM  

Debeo Summa Credo: Gary-L: Mentat: Taking over?  Where has the author been the last ten years?  This is what happens when you demand more STEM majors but won't give them any money to do research.  These guys are wasting an enormous amount of brain power figuring out new ways to move electrons around and pretend that it's wealth.  It's going to blow up in their faces just like it always does, and the country won't have anything to show for it.

^^This.  Anyone interested should read The Big Short.  Prepare to be dumbfounded at how the so-called experts on Wall Street were clueless about the housing bubble, yet only a handful (fewer than 10 people) figured out the system was flawed.

Gee, it was a bubble. Obviously most people were clueless about it or IT WOULDN'T HAVE BEEN A farkING BUBBLE!!! You know who else was "clueless" about it? Millions and millions of borrowers and homebuyers worldwide who bought homes, inflating the bubble. As well as the fed who kept interest rates too low and Fannie Mae and Freddie Mac who kept loaning record amounts.


Plus, one of the big complaints economists have against traders is that EMH implies that they are useless and no better than throwing darts.  However, EMH sort of got reamed up the ass by the crisis, so this complaint isn't as popular as it once was.
 
2014-07-27 03:22:04 AM  
I swear to god you people are morons.
 
2014-07-27 03:27:44 AM  

mr lawson: I swear to god you people are morons.


??
 
2014-07-27 10:22:13 AM  

Debeo Summa Credo: Gee, it was a bubble. Obviously most people were clueless about it or IT WOULDN'T HAVE BEEN A farkING BUBBLE!!! You know who else was "clueless" about it? Millions and millions of borrowers and homebuyers worldwide who bought homes, inflating the bubble. As well as the fed who kept interest rates too low and Fannie Mae and Freddie Mac who kept loaning record amounts.


Lots of people knew it was a bubble.  It was obvious to the insiders as early as 2004 that the mortgage industry was unsustainable.  Outside of the industry, many people were mocking the irrational housing prices and the idea that the housing market could only go up.  The problem was that no one knew how to stop it.  The entire industry was built on the idea that housing prices could only go up, and when it became obvious that wasn't true, the industry could only hold on and hope for the best.
 
2014-07-27 01:27:10 PM  

MugzyBrown: mjjt: TedCruz'sCrazyDad: Gary-L: Mentat: Taking over?  Where has the author been the last ten years?  This is what happens when you demand more STEM majors but won't give them any money to do research.  These guys are wasting an enormous amount of brain power figuring out new ways to move electrons around and pretend that it's wealth.  It's going to blow up in their faces just like it always does, and the country won't have anything to show for it.

^^This.  Anyone interested should read The Big Short.  Prepare to be dumbfounded at how the so-called experts on Wall Street were clueless about the housing bubble, yet only a handful (fewer than 10 people) figured out the system was flawed.

phamwaa: Linux_Yes: Math nerds are taking over Wall St.

Heh. There was a 60 Minutes piece about a trading firm that routed competing trades through what they called "the bird's nest": 60 miles of fiber in a box. The time advantage is worth millions.

It's not incompetence that's breaking the system, it's the High Frequency Traders aka the Flash Boys

http://bitsofbooks.com/flash-boys.html

Taxing investors to the tune of $20b pa without adding any value

Hft only affects theist Hft who are also trying to get an edge


No, it affects real investors. It was first discovered when a trader for the Royal Bank of Canada, Brad Katsuyama, started getting suspicious when someone was seemingly beating him to the exchange whenever he tried to make a trade. He did some investigating and found that HFTers were sitting and waiting for trades. When a trade was ordered, they beat the trader to the exchange by milliseconds and piggyback on the trade, meaning the trader either had to pay a higher price for the stock or had to sell for a lower price. Basically the HFTers was siphoning off millions by doing nothing but piggybacking on trades.

http://www.vanityfair.com/online/daily/2014/03/michael-lewis-book-fl as h-boys-high-speed-trading
 
2014-07-27 05:28:38 PM  

Sliding Carp: facepalm.

"But it's different this time."


Yeah, that's what I thought. I think I'll stick with panicking.

John Allen Paulos, the popularizer of mathematics is only one of hundreds or thousands who have lost significant amounts of money on market trading. He committed basic errors such as sending good money after bad despite his math skills or because of them. He recouped some of the money by writing a book explaining where and how he went wrong.

Best to read Nassim Nicholas Taleb's Black Swans before thinking brains will get you anywhere. There are many traps in the markets for the unwary. For starters, math doesn't help against rigging and fraud, such as pump-and-dump operations. It also doesn't cure stupid. And finally, even the pros are a superstitious and ill-informed lot or else small children, psychics, chimpanzees and so forth would seldom beat the traders or the market.

My guess is that the market is pretty much chaos and only patience, diversification, and common sense will beat it regularly, by waiting it out in safe investments.

The big money is made and lost by pure luck on a few big days. Everybody else tends to either make money slowly and constantly, or lose their pants, perhaps slowly and constantly if they are good gamblers.
 
2014-07-27 05:37:24 PM  

brantgoose: Sliding Carp: facepalm.

"But it's different this time."

Yeah, that's what I thought. I think I'll stick with panicking.

John Allen Paulos, the popularizer of mathematics is only one of hundreds or thousands who have lost significant amounts of money on market trading. He committed basic errors such as sending good money after bad despite his math skills or because of them. He recouped some of the money by writing a book explaining where and how he went wrong.

Best to read Nassim Nicholas Taleb's Black Swans before thinking brains will get you anywhere. There are many traps in the markets for the unwary. For starters, math doesn't help against rigging and fraud, such as pump-and-dump operations. It also doesn't cure stupid. And finally, even the pros are a superstitious and ill-informed lot or else small children, psychics, chimpanzees and so forth would seldom beat the traders or the market.

My guess is that the market is pretty much chaos and only patience, diversification, and common sense will beat it regularly, by waiting it out in safe investments.

The big money is made and lost by pure luck on a few big days. Everybody else tends to either make money slowly and constantly, or lose their pants, perhaps slowly and constantly if they are good gamblers.


There are basicaly three ways to constantly make money in the market.
1: act on information before anybody else (hft fit in this group)
2: recognize and act on human patterns (it is what I do) Markets are chaos...humans are predicable.
3: Learn and trade on the Fundamentals of companies. (Warren Buffett)
 
2014-07-27 11:11:41 PM  
Long Term Capital.
 
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