The quants - Scott Patterson

You're a genius. Nobody plays the financial markets better than you. What could possibly go wrong?

Quants - quantitative analysts - were the maths masterminds let loose on Wall Street in the belief that their brilliant, impregnable computer programs would always beat the market. But as the catastrophic events of 2007 and 2008 showed, their seemingly failproof methods were little more than ticking timebombs.

Inspired by the 'Godfather of Quants' - maths-professor-turned-gambler Ed Thorp, who began applying skills learned at the Vegas tables to the financial markets back in the 1950s - the quants achieved extraordinary success and massive wealth. This book charts their rise from obscurity to boom and then to bust, explaining why they were so confident - and how they got it so disastrously wrong.

Scott Patterson worked for several years as a financial reporter at the Wall Street Journal. He lives in New York. His book The Quants (Random House Business, 2009) was a New York Times and Wall Street Journal bestseller.

Mr Patterson is onto a big story that already begs follow-up
New York Times

... a riveting account
Financial Times

The Quants ... radiates with hubris, high stakes and pricey toys
Business Week

[an] intriguing history of the Quants...[Patterson] explains how hedge funds combined techniques of arbitrage and hedging using complex computer-driven models (one was named Midas) to reduce the risk of making losing bets
TLS - Stephen Fay

Patterson paints a clear picture of the history and evolution of quantitative trading on Wall Street, before shifting focus to the 'crisis before the crisis' in which a number of quant funds almost collapsed in 2007...definitely worth reading for an in depth analysis of one of the points in recent financial history where things may have started to go awry
Insider