The Ascent of Money

If you consider yourself a financial neophyte or are confused by what is going on today check out The Assent of Money. It is a good overview even if it glosses over some of the more technical details of modern finance. I don’t completely agree with his assessment of quantitative finance. There are many firms that are not quants that are down considerably. RenTech still seems to be raking in the money.

Considering his example of LTCM it seems that an unhedged (or partially hedged) bet on volatility across the world is asking for trouble. All strategies that revolve around that then can become correlated. If I have learned anything it is that in a crises all (or almost all) correlation goes to 1. Still black box systems can and do work and program trading will continue to grow.

  1. It’s “Ascent” not “Assent”, fyi. Figured you’d want to fix the spelling.

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