C's managing A's

Great article!

I would have to say that the bar fly's theory is perplexingly-simple and very likely spot on.

Regards

very good article, thanks

Most accurate perspective on the industry I've read in years

Well, it seems like an issue of correlation versus causation. I suspect that it's not that the smart people are bad in and of themselves for the industry. I think that smart people came to Wall Street because the financial reward was so great and that it was this same financial reward that led to overinvestment in the financial services industry and the subsequently frothy markets in financial products like mortgages. But I don't really believe that the relative increase in intelligence had all that much to do with it - you can have banking crises without financial innovation (1929) or with innovation (1987), but it's the underlying market forces that use these innovations and not the other way around.

Absolutely agree with the article. My manager over the summer used to say, the reason I don't trust or hire those really smart MIT, Harvard guys is they shouldn't be in Finance. And they're here for the money, those brains should be put to work saving our American asses. His exact wording - so I agree. All those brilliant scientists, chemists and such should not be doing work that monkeys can do

You guys are idiots. Smart guys are the problem?! This article is indeed well-written, but fundamentally flawed. No one talks about the huge surge in profits since 1970s because smart people started to go into the industry. The cause of the collapse was low regulation (an area that dumb people work in). If you give a mouse a cookie...

Very well written.. and just phenomenal reasoning behing it.

Also keep in mind that this is mainly talking about derivative structuring and financial engineering, etc. To use the OP's original comparison, you could say that (generally) Wharton kids are gonna end up in banking, and MIT kids with crazy quant skills are the ones who are doing financial engineering.

And I completely agree with killscallion and MonkeyKingdom. While this article is well-written and has a unique approach, calling it genius or phenomenal reasoning is going a bit far. (Not sure if sunnyrollen was being sarcastic or not, though).

food for thought...anyhow, do you think mack or thain or neal or...knew what hit them? no, they enjoyed the rise in ROE that was attributable to these products, but had no freakin clue how to manage the risk or the people writing these assets...