Talking Tuesdays with Fancy Quant

I left banking about a year ago and many people have asked me why I left. The reason I left is the same reason we're seeing many banks fail. Banks have abandoned meritocracy in favor of political agendas. These agendas have resulted in not hiring or promoting the best candidates but in looking at ways to make the world look how they want it. This issue is across all departments at the banks however the quantitative finance departments (risk management and model development) are seeing the consequences. It is really hard to hire and train quants. Everyone struggles to find motivated, self-driven, ethical, and friendly people. These are just the basic skills of a good worker. Then add on top of that the skills of finance and add the final layer of technical skills which cover three fields of studies (math, statistics, and CS). The banks have been focusing more on reducing costs and increasing diversity which has resulted in increased risks to the firms. The failure of SVB and Credit Suisse are driven by poor risk management practices and risk management is a complex area requiring quantitative knowledge as well as finance and banking knowledge.
Government, universities, and consulting firms are driving a lot of the DEI (diversity, equity, and inclusion) and the ESG (environmental, social, governance) topics without consideration for risk management or actual fairness. I recently heard a top consulting firm tout how they measured bias with 30 different metrics. The only way to get 30 different metrics is to add your personal opinions and beliefs into the picture. Bias is nothing more that a statistical measure with the understanding of causality and inference. Overall I couldn't handle the discrimination that is going on. I believe you hire and promote the best regardless of race, religion, political affiliation, or other personal characteristics that don't effect your work.

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A friend of mine, C.R. Olschwang recently wrote a book, "Mainline Business Cycle Theory." I don't often get the chance to discuss economics with economists as there are not very many in banks or fintech. In this chat we discuss economics schools of thought, what is mainline vs mainstream economics, ESG, economic models, utility functions, and issues with economic data. This conversation could have went for many hours as the number of interesting economic topics is quite large. Maybe we'll get back together to discuss wages, monetary vs fiscal economics, and what money is in the perspective of de-fi.
Mainline Business Cycle Theory (affiliate link):
https://amzn.to/3FiGc5h
Connect with C.R. Olschwang:
https://www.linkedin.com/in/cody-olschwang/

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I recently made a video discussing the SEC's proposal to have all publicly traded firms calculate their environmental impact. At a first glance it sounds very reasonable and who doesn't want to help the planet? Well it turns out that the environmental experts struggle to model human impacts in the planet. Having a bunch of firms with no environmental impact would make even more useless predictions. I respond to a few arguments made by a subscriber such as the focus on how humans will survive and why is it bad to penalize and demonize firms who contribute to global warming and other environmental issues.
Original video:
https://youtu.be/LGc5l8wJB9Q
Why Nuclear is Better than Solar and Wind:
https://youtu.be/N-yALPEpV4w
Natural Disaster Deaths (real historic data...not crazy predictions):
https://ourworldindata.org/natural-disasters

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The challenges of management are no joke, and no an MBA won't cut it! Getting real world experience especially at a small firm will allow you to really see how people think and behave. You can't be the fun laid back manager and you can't be so strict that everyone undermines you behind your back. Setting a strict system of how you operate while being reasonable and understanding will go a long way. Balancing these two halves is very challenging though and often at large firms you have little or no control over the system such as how promotions or other benefits work.
It is also just as important to learn how to manage up, meaning to manage you manager as it is to be a manager of employees. One key tip I have found is that it is better to give your managers ideas slowly and let them take it as their own over time. They are far more invested in the idea as they think it is theirs than fighting you on why "your idea" isn't perfect. You will not get credit for the idea however you will come off as a great employee and a real team player.
Video Version:
https://youtu.be/80GQo78pavY
Connect with me:
https://www.linkedin.com/in/dimitri-bianco
https://twitter.com/DimitriBianco​
Quant t-shirts, mugs, and hoodies:
teespring.com/stores/fancy-quant​
☕ Show Your Support and Buy Me a Coffee ☕
https://ko-fi.com/fancyquant

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There is a lot of confusion on how admissions is done at quant finance masters programs in the US. Every program will do it differently however today I got the opportunity to learn about the admissions process from one of the top programs (Carnegie Mellon University). Emily Wertz is the director of Admissions and Recruiting at CMU's Masters of Science in Computational Finance program and has worked there for over eight years. We cover:
1) Academic Readiness
2) Career Readiness
3) Interpersonal Skills
Emily provides tips and some insight into how the applications are reviewed.
For more information on CMU's program:
https://www.cmu.edu/mscf/

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