information-siloing
The deliberate compartmentalization of knowledge within the hedge fund to prevent employees from sharing proprietary algorithms and strategies.
1 chapter across 1 book
Weapons of Math Destruction (2016)Cathy O'Neil
In this chapter, Cathy O'Neil recounts her transition from academia to a quantitative role at the hedge fund D. E. Shaw, where she initially admired the power of mathematical models in finance. However, she becomes disillusioned as she witnesses the 2008 financial crisis unfold, realizing that these models, while powerful, are based on past data and can fail catastrophically when unprecedented events occur. The chapter highlights the moral ambiguity of hedge funds profiting from market inefficiencies and the systemic risks posed by complex financial instruments and opaque information structures.