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mizhael
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Will the profession of "Quant" die?

September 17th, 2008, 3:38 pm

The profession of quant thrived on exotic products. But with the government and people loathe the infamous exotic products to the extent of loathing toxic, will the profession of Quant die?Will there be a massive cut of quant jobs and exotic stuff?People always say it's up and down and it will all come back again - but will it happen that people hate exotics so much that they write their loathe into regulation or law?
 
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ronwise
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Will the profession of "Quant" die?

September 17th, 2008, 3:44 pm

do you mean credit derivatives by exotic products? What about FX, EQD, IRD, commodity derivatives? They are alive, especially EQD.
 
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mizhael
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Will the profession of "Quant" die?

September 17th, 2008, 3:56 pm

QuoteOriginally posted by: ronwisedo you mean credit derivatives by exotic products? What about FX, EQD, IRD, commodity derivatives? They are alive, especially EQD.Yeah I was with you originally. Previously I thought the dying products are just some credit derivatives. However the psych is contagious in the market. If people are so horrified and run away from one exotic product, they will likely run away from other similar types. If the law-makers frames up a law to express their anger against one product, they might as well restrict the similar products. We have seen this contagion phenomenon happens again and again from BSC to 2F's to LEH to AIG and to the next one...
 
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twofish
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Will the profession of "Quant" die?

September 17th, 2008, 8:15 pm

QuoteOriginally posted by: mizhaelIf the law-makers frames up a law to express their anger against one product, they might as well restrict the similar productsBut at the same time I think that risk management is going to turn into a really hot field.
 
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migalley
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Will the profession of "Quant" die?

September 17th, 2008, 10:19 pm

If quant profession does die, then TJ will never get the chance to fulfil one of his dreams. That of escaping from the Back Office.
 
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mizhael
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Will the profession of "Quant" die?

September 17th, 2008, 10:24 pm

QuoteOriginally posted by: twofishQuoteOriginally posted by: mizhaelIf the law-makers frames up a law to express their anger against one product, they might as well restrict the similar productsBut at the same time I think that risk management is going to turn into a really hot field.No -- if you have the safe "sex" with the markets, i.e. you play safe by not dealing with exotics in whatever the asset class, then you don't need a sophisticated/fancy risk management. Am I right?
 
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jomni
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Will the profession of "Quant" die?

September 18th, 2008, 12:11 am

QuoteOriginally posted by: twofishQuoteOriginally posted by: mizhaelIf the law-makers frames up a law to express their anger against one product, they might as well restrict the similar productsBut at the same time I think that risk management is going to turn into a really hot field.Maybe non-quant-oriented risk management.I think the legal services will be very much in demand these days as well.
Last edited by jomni on September 17th, 2008, 10:00 pm, edited 1 time in total.
 
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movielove
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Will the profession of "Quant" die?

September 18th, 2008, 2:38 am

QuoteOriginally posted by: mizhaelThe profession of quant thrived on exotic products. But with the government and people loathe the infamous exotic products to the extent of loathing toxic, will the profession of Quant die?Will there be a massive cut of quant jobs and exotic stuff?People always say it's up and down and it will all come back again - but will it happen that people hate exotics so much that they write their loathe into regulation or law?yeah, demand for quant, at least derivatives pricing quant, will go down sharply in the next a few years. the government and the industry will be more cautious about complex products. they've shown they are good for speculation in good years, but are "financial weapons of massive destruction" in bad years as buffet predicted as early as in 2002. some people are doubting the meaning of the so-called financial innovation.
 
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mizhael
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Will the profession of "Quant" die?

September 18th, 2008, 4:26 am

QuoteOriginally posted by: jomniQuoteOriginally posted by: twofishQuoteOriginally posted by: mizhaelIf the law-makers frames up a law to express their anger against one product, they might as well restrict the similar productsBut at the same time I think that risk management is going to turn into a really hot field.Maybe non-quant-oriented risk management.I think the legal services will be very much in demand these days as well.But non-quant risk management and legal services are not our business, right? We are quants and this is a quant forum... What do we do?
 
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KackToodles
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Will the profession of "Quant" die?

September 18th, 2008, 5:27 am

bankruptcy lawyers are cashing in big time at $1000/hour for their much needed services.
 
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DominicConnor
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Will the profession of "Quant" die?

September 18th, 2008, 6:13 am

In the long term, I think the term will fall into disuse.But not for the reason you might think.I observe the infiltration of quant techniques into all aspects of the business. It's not that long ago trading was almost quant free, now it's tough to get into that career track without basic quant skills.Risk management was largely run by accountants, and sales people were not exepcted to do much beyond schmoozing. Again we see sales people with quants skills.I even see compliance roles coming up.That's both good and bad.It pushes up aggregate demand for quant skills, but means that there will be more roles where other skills are necessary.However I appreciate that quants enjoy knowing stuff others simply can't understand, and that their pay reflects this.We are now seeing quant skills in senior management, which means a more realistic appreciation of what is easy/hard/silly.
 
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KackToodles
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Will the profession of "Quant" die?

September 18th, 2008, 7:10 am

QuoteOriginally posted by: DominicConnorIn the long term, I think the term will fall into disuse. The problem is that the MFE-type quants' expertise is amazingly narrow and specialized, so when the economy falls into crisis mode (about once every 5 years), quants lack sufficient economics ability to think thru the bigger issues about how to fix. In the long run, a good HF and bank really need people who are more broadly trained and experienced in business and econmics (e.g., macro and political) to direct the firm in the right direction. A person who can pick up his rolodex and know who to call is of enormous value when your HF is in crisis mode. That's why people like Paulson (an MBA) and Bernanke (a phd economist) really are more valuable in the long run even if they can't code up a spreadsheet to do a mortgage simulation.
Last edited by KackToodles on September 17th, 2008, 10:00 pm, edited 1 time in total.
 
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QFsurvival
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Joined: September 11th, 2008, 8:57 am

Will the profession of "Quant" die?

September 18th, 2008, 7:36 am

QuoteOriginally posted by: mizhaelThe profession of quant thrived on exotic products. But with the government and people loathe the infamous exotic products to the extent of loathing toxic, will the profession of Quant die?Will there be a massive cut of quant jobs and exotic stuff?People always say it's up and down and it will all come back again - but will it happen that people hate exotics so much that they write their loathe into regulation or law?Yes you are partly right but not all. Some of the complex derivitavies will die, such as CDO square, synthetic CDOs why?They are too complex to understand for ordinary investors and heavily relied on mathematical model. Model is just a tool to help you to do the analysis but cannot be the only source to make profit. Look around in the industry, most of quant guys owned one or two phd degree in science, they are extremely quantitative, they can even make a bloody greatly complex model to send the spaceship to the moon. But what we missed out? Yes, a basic sense of the financial market and macro economy. Model can not transformed to liquidity. But can market lives without derivative? No, derivative is one of the most important part to form a efficient market. I think you should learn it in your lectures. It is just something have to be in the market just like why you see fast-food on the street, 'coz you have to eat food. So, derivatives are just like other things, bad one rule out, good one stay one, and new one rule in year to year. But will never die. As long as derivative is alive, quant is alive.
 
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jomni
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Will the profession of "Quant" die?

September 18th, 2008, 9:08 am

QuoteOriginally posted by: DominicConnor[/iI even see compliance roles coming up.Fear the Auditor-Quant with a PhD! He'll surely unravel the flaws in your model.
 
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Wilfrid
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Will the profession of "Quant" die?

September 18th, 2008, 11:19 am

QuoteOriginally posted by: QFsurvivalIt is just something have to be in the market just like why you see fast-food on the street, 'coz you have to eat food.I say, we don't allow fast-food on my street. I have specifically instructed my butler to make sure that anyone with fast food is kept away, what?Tea and scones are most welcome though.
I learned two things at drama school. First, that I couldn't act; second, that it didn't matter.
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