The Quants

1: All in One

Peter Muller stepped into the posh Versailles Room of the century old St. Regis Hotel in midtown Manhattan and took in the glittering scene in a glance.

It wasn t the trio of cut-glass chandeliers hung from a gilt-laden ceiling that caught his attention, nor the pair of antique floor-to-ceiling mirrors to his left, nor the guests svelte Armani suits and gemstudded dresses. Something else in the air made him smile: the smell of money. And the sweet perfume of something he loved even more: pure, unbridled testosterone-fueled competition. It was intoxicating, and it was all around him, from the rich fizz of a fresh bottle of champagne popping open to the knowing nods and winks of his friends as he moved into a room that was a virtual murderer s row of topflight bankers and hedge fund managers, the richest in the world. His people.

It was March 8, 2006, and the Wall Street Poker Night Tournament was about to begin. More than a hundred well- heeled players milled about the room, elite traders and buttoned-down dealmakers by day, gambling enthusiasts by night. The small, private affair was a gathering of a select group of wealthy and brilliant individuals who had, through
sheer brainpower and a healthy dose of daring, become the new tycoons of Wall Street. This high-finance haut monde perhaps Muller most of all was so secretive that few people outside the room had ever heard their names. And yet, behind the scenes, their decisions controlled the ebb and flow of billions of dollars coursing through the
global financial system every day.

Mixed in with the crowd were professional poker players such as T. J. Cloutier, winner of sixty major tournaments, and Clonie Gowen, a blond Texan bombshell with the face of a fashion model and the body of a Playboy pinup. More important to the gathering crowd, Gowen was one of the most successful female poker players in the country.

Muller, tan, fit, and at forty-two looking a decade younger than his

SCOTT PATTERSON is author of the New York Times bestselling book The Quants and Dark Pools and a staff reporter for The Wall Street Journal. His work has also appeared in the New York Times, Rolling Stone and Mother Earth News. He has a masters of arts degree from James Madison University. He lives in Alexandria, Virginia.

Scott Patterson has the ability to see things you and I don t notice. In The Quants he does an admirable job of debunking the myths of black box traders and provides a very entertaining narrative in the process.  --Nassim Nicholas Taleb, New York Times bestselling author of Fooled by Randomness and The Black Swan

Fascinating and deeply disturbing Patterson gives faces and personalities to the quants, making their saga accessible and intriguing [he s] onto a big story that begs follow-up.  --New York Times

Valuable makes [the quants ] secretive world comprehensible the story radiates with hubris, high stakes and expensive toys.  --Bloomberg.com
 
A riveting account there are many dramatic moments and a good dose of schadenfreude in Scott Patterson s THE QUANTS.  --Financial Times

Read this book if you want to understand how the collapse of the global financial system was at its core a failure of modern financial theory and its most ardent disciples. Patterson is able to gracefully explain the complex ideas underpinning our financial system through an extraordinarily engaging and insightful story.  --Mark Zandi, Chief Economist of Moody s Economy.com and author of Financial Shock

"Enlightening and enjoyable...Patterson masterfully recounts how brilliant mathematicians and technologists ignored the human element...If you're serious about understanding the financial meltdown, you need to read this book." --David Vise, Pulitzer Prize Winner, author of The Google Story, and Senior Advisor, New Mountain Capital

"A  compelling tale of greed and conceit, The Quants tells the inside story of the Wall Street rocket scientists who could couldn t resist playing with numbers and nearly blew themselves up.  --Michael J. Panzner, author of Financial Armageddon and When Giants Fail

"The Quants will keep hedge fund managers on the edge of their