Brian Sack, he who held the fattest finger on the Fed's green buy button until Simon Potter and his young protege Kevin Henry stepped into those prodigious shoes, has landed a role at mega quant fund D.E.Shaw. As Reuters reports, the former head of the Fed's Market Group will be the co-Director of Global Economics. The fund, with its reputation for mathematical modeling and computer-driven trading over short-term horizons will, we are sure, benefit from Sack's empirical ability to stomp on the throat of the VIX and tinker with VWAPs, though we hope he lasts longer than Larry Summers did. Of course, this almost guarantees that former-D.E.Shaw alum Jeff Bezos' Amazon.com share price will continue to surge as its fundamental performance plunges. The Plunge Protection Team, it appears, is in strong demand, though we hope someone explains that maybe D.E.Shaw does have a MtM policy (and not unlimited balance sheet).
D.E. Shaw & Co, a $28 billion hedge fund firm, known for its quantitative modeling, has hired a former top official from the Federal Reserve Bank and an economist from a rival hedge fund, to work in its macro investing unit, the firm said on Thursday.
Brian Sack, had been an advisor to the president of the Federal Reserve Bank of New York and prior to that headed the bank's Markets Group.
"Our macro team casts a wide net in terms of asset class and geography, and having these two talented individuals' insights strengthens our capabilities in several dimensions as we source and analyze trades in global markets,"
Founded in 1988 by David Shaw, a computer scientist, the firm now ranks as one of the world's most powerful hedge funds and relies heavily on mathematicians and scientists to create its investment strategies. For a time, the firm employed Lawrence Summers, a former Treasury Secretary, Harvard University President and economist, as an adviser.
As much as mathematical models are critical to the firm's success, less than half of its assets are now managed under computer-driven models with short time horizons. Last year, for example, Stone discussed that one of the big bets in its macro strategy centered around Japan and that these types of bets often take a long time to play out.