<t>The number one question/skill for a quant risks management is, "Can you communicate?" Relax during the interview. Simple but effective if you are sitting: Put both feet on floor, while you are talking lean back, open arms spread out on the arm rest, palms up, look at their head. When they are tal...

<t>Callable MBS make sense for the issuer for 2 reasons:1. the yield curve is not usually flat, but steep. So the refi's may not be efficient for a 30 yr. mortgage holder, but calling the cash flows, at par, as the normal turnover rates cause expected cash flows of specific tranches to run down a st...

<t>Very nice summary of the end results. However, I would argue how you get there and the end results combined give the potency to this "law". The result is largely due to the agency problem, if you expand individuals to include individual companies and sectors as "individuals" Putting the two ideas...

<t>Thanks for your response. "Resource allocation" often means capital or money, but also means real capital or people as well. Money and power can be potent intoxicants.Besides the problems with AIGFP's risks evaluation, there was the serious problem that you suggest: Leadership had a no personal l...

<r>My premise is that risks evaluation often creates resource allocation and therefore a faulty risks evaluation process can quickly become ingrained in a destructive psychological feed back loops. The circular logic, closes the door to constructive criticism, and often creates bubbles and the resul...

<t>Of course there was some luck to Buffet's success. But there is some genius, However, perhaps it is not so much genius in investing as it is genius in running businesses.It appears to me that much of this is how and when to aquire a business. He keeps plenty of liquidty, and ready to pounce when ...

<t>If trading adds wealth by successfully allocating resources to the most efficient areas, a system that successfully trades all the time would create its own inefficiencies. It would create its own bubble. For an example the AAA credits rating creating the massive leverage. $500 billion can not lo...

<t>Of course they did not call it chaos theory. Still the complex human element caused the models to crumble. Those that caught the models weakness, more likely called it reflexity. The question still remains, how would you incorporate the success of their ideas into your models? The new working wor...

<t>It is my belief that chaos theory should/could get a big boost in finance due to the financial crisis. Could Chaos theory's widespread understanding and use have prevented the crisis?…I believe so. Those that understood the practical applications of Chaos Theories tenets where the ones that were ...