Quants and wall street
Leave it to a technology magazine to publish the best financial-reporting story of the year. Bryant Urstadt's report ("The Blow-Up," November/December 2007) is the first and only truly penetrating piece of reporting and analysis on the role that quantitative hedge funds played in a tempest-tossed summer on Wall Street. Kudos.
Nick Schulz
Washington, DC

Isn't it ironic? Statistical quant models made billions of dollars for hedge funds from random stock-market movements. But when success expanded those hedge funds to make up a large part of that market, those quant models ended up modeling their own results, which were anything but random. The feedback loop from models trying to model themselves had all the hallmarks of a bad episode of Star Trek. It's just too bad investors had to lose $2.1 trillion in market valuation in order to see it come to life.
Carl D. Howe
Maynard, MA