Re:Panic of the Plutocrats
by SkyMarshal on Monday October 10, 2011 @03:57PM
(#3095505)
The big difference between startup risk and financial industry risk is that when 99% of startups fail, the losses are contained to those who took the risk. When the banking system fails, the losses are systemic and uncontained and affect people all over the country and world.
I'd also debate your point that the average quant understands statistics and probability much better than startup founders. The former have created a system where the expected payoff is negatively asymmetric, the latter a system where the expected payoff is positively asymmetric. Which world do you want to live in?
And do I even need to mention how quants' recent attempt to use Gaussian statistics to model a non-Gaussian world became one of the primary causes of the worst financial crisis since the Great Depression?
Yes there are smart, savy quants like Paul Wilmott & Co. whose intellectual integrity is impeccable. But so far they've been the exception, not the rule.
I'd also debate your point that the average quant understands statistics and probability much better than startup founders. The former have created a system where the expected payoff is negatively asymmetric, the latter a system where the expected payoff is positively asymmetric. Which world do you want to live in?
And do I even need to mention how quants' recent attempt to use Gaussian statistics to model a non-Gaussian world became one of the primary causes of the worst financial crisis since the Great Depression?
Yes there are smart, savy quants like Paul Wilmott & Co. whose intellectual integrity is impeccable. But so far they've been the exception, not the rule.