[DebtDeflation]

>However I think you're underestimating RenTech here. They're genuinely just in another league compared to what most people consider the "elite" quant shops.

People said the same thing about LTCM. They had multiple Nobel Prize winners on staff, literally the people who wrote the Economics and Finance textbooks.

Then a decade later, history repeated with all of the prop trading outfits doing securitization.

It's always the same ingredients: 1) a theoretically sound strategy for taking advantage of some arbitrage opportunity 2) the assumption that positions can actually be liquidated on demand at the prevailing price and 3) enormous amounts of leverage. Then something happens that wasn't accounted for (e.g., sovereign default, counterparty default, etc.) and suddenly the strategy is no longer sound ("in a crisis all correlations go to one"), the liquidity assumption is no longer true ("where are all the buyers?"), and the leverage puts you out of business ("the market can stay irrational longer than you can stay solvent"). People never learn.

[bidirectional]

RenTech was founded years before LTCM and is still going strong. It's not repetition of history, they've outlasted or are older than most of the trading desks ever. They're basically a business providing a service to other market participants and executing that incredibly well, it's quite unlike the arbitrage LTCM was involved with.

[DebtDeflation]

And Bernie Madoff founded his firm two decades before Ren Tech, hell at one point he was the Chairman of NASDAQ.

[carnitine]

That was a scam. Are you accusing RenTech of being dangerously overextended like LTCM, or a scam like Madoff? Considering the Medallion fund takes no outsider capital, that would be quite a strange way to run a Ponzi scheme.