The Blow Up -- the cover story from MIT Technology Review's Nov Dec issue. Utterly fascinating stuff here. Author Brian Urstadt traces the history of quant jocks in finance, from early toilers to celebrity quants like Emanuel Derman and James Simon.

This brief history of quantitative finance begins and ends with the titular blow up of the sub-prime lending market, a derivative facilitated niche created in part, as you'll learn, through a little quant-jock-magic.

The article addresses head on the issues of why all these smart, data-driven people didn't see the crash coming and what risks we take with computer automated decision-making becoming an ever larger proportion of market trading.

So polish up on your Black Scholes, outlier events and tight coupling. It's only the economy at stake.

Highly, highly recommended reading.

- MDT

Labels: James Simon, quantitative finance, Rennaisance Asset Management, Skynet