Scott Patterson (author)

Scott Patterson
Occupation Journalist, author
Website Scott Patterson website

Scott Patterson is an American financial journalist and bestselling author.[1][2] He is a staff reporter at The Wall Street Journal and author of Dark Pools: High-Speed Traders, A.I. Bandits, and the Threat to the Global Financial System and The New York Times bestselling book The Quants.[3][4][5]

Journalism

Patterson has as Master of Arts and English degree from James Madison University.[6][7] Patterson is a staff reporter at The Wall Street Journal covering government regulation of the financial industry.[7] His coverage has included high-profile interviews with Mark Cuban, Warren Buffett, Edward Thorp and others.[8][9][10]

He has been described as the "go-to guy" for high-tech journalism, covering topics such as dark pools, flash crashes, algorithmic trading and high-frequency trading.[2][11][12][13][14]

Patterson is an active critic of high-frequency trading, citing HFT as a major cause of market volatility and preferential treatment of select firms, yet acknowledging HFT role as market makers.[15] He is a proponent of greater government oversight on the markets, pointing out that they cannot keep up with Wall Street innovation. He names this as a cause of decreased public confidence in the markets.[16][17] Patterson attributes the Flash Crash to a combination of all these issues.[12]

Books

The Quants

In 2010, Patterson wrote The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It, a bestseller that was published by Crown Publishing.[18] The book outlines computer-driven quantitative trading by following the lives of four "quants." These quants are highly educated whiz kids that created complex mathematical algorithms to exploit market inefficiencies.[5]

Ultimately, the reliance on computer-driven trading was attributed to meltdowns such as Black Monday, the collapse of Long-Term Capital Management, and Great Credit Crackup.[19] The history of quantitative trading is covered, including early quants such as Edward Thorp and how much of the early knowledge was applied from lessons learned at blackjack tables.[20] The book also highlights interactions with people against quantitative trading including Nassim Nicholas Taleb, author of Black Swan.[21]

Dark Pools

On June 12, 2012 Patterson released Dark Pools: High-Speed Traders, A.I. Bandits, and the Threat to the Global Financial System.[15][22][23][24][25] The book expands on The Quants to show how the rise algorithmic trading, artificial intelligence bots, and high-frequency trading have rigged the current stock market.[12][26] Patterson also discusses how governmental agencies, like the SEC, cannot keep up with the rapid evolution of technology.[16]

These new innovations show no sign of slowing, and Patterson describes AI Bots, Dark Pools, and HFT as the future of trading.[27]

Zerohedge ran a 4-part excerpt series on the book following its release.[28][29][30][31] The Globe and Mail described Dark Pools as "the best book going on the issue."[15]

Reception

Patterson's debut book The Quants went on to become a New York Times Bestseller.[4] Due to the success of the first book, Patterson began working on Dark Pools to expand on the issues covered in The Quants.[6]

Patterson's style of writing has been compared to author Michael Lewis, due to his ability to relay complex financial topics in a way suitable for mass appeal.[1][22][23] His journalism has been praised for its depth, particularly in cataloging the roots of current market technologies.[32] Patterson’s work has been featured in The Wall Street Journal, New York Times, CNBC, Forbes, CNN, Fortune magazine, Rolling Stone, Scientific American, and the Financial Times, among others.[1][3][18][19][20][26][33]

References

  1. 1 2 3 Cendrowski, Scott (June 22, 2012). "Reasons to fear Wall Street's high-tech traders". CNN Money.
  2. 1 2 Coyne, Shawn (June 1, 2012). "The 500 Dark Pools". Steven Pressfield Online.
  3. 1 2 Hurt, Harry. "In Practice, Stock Formulas Weren't Perfect". New York Times.
  4. 1 2 "Hardcover Business Best Sellers". New York Times. March 5, 2010.
  5. 1 2 Pressley, James (February 18, 2010). "How Quants Made a Killing—and Made a Mess". BusinessWeek.
  6. 1 2 Ritholtz, Barry (December 8, 2010). "A Conversation with Scott Patterson, The Quants". Ritholtz.
  7. 1 2 "Author Bio: Scott Patterson". Amazon.
  8. ↑ Patterson, Scott (June 26, 2012). "Mark Cuban: High-Frequency Traders Are the Ultimate Hackers". Wall Street Journal.
  9. ↑ Patterson, Scott (December 14, 2009). "In Year of Investing Dangerously, Buffett Looked 'Into the Abyss'". WallStreet Journal.
  10. ↑ "'The Quants': It Pays To Know Your Wall Street Math". NPR. February 1, 2010.
  11. ↑ Patterson, Scott (June 27, 2012). "High-Frequency Trading Has Made Markets More Efficient — Larry Tabb". Wall Street Journal.
  12. 1 2 3 Patterson, Scott (June 10, 2012). "Breakdown: A Glimpse Inside the 'Flash Crash'". Wall Street Journal.
  13. ↑ Patterson, Scott (April 9, 2012). "Trading Mysteries Extend Deeper Than Dark Pools". Wall Street Journal.
  14. ↑ Patterson, Scott (June 13, 2012). "Q & A: The Volcker Rule". Wall Street Journal.
  15. 1 2 3 Erman, Boyd (July 9, 2012). "A critic sees some good in the high-frequency trader". Globe and Mail.
  16. 1 2 Falkenstein, Eric (June 20, 2012). "DARK POOLS: Despite The Scary Title, This Is A Good History Of High Speed Trading". BusinessInsider.
  17. ↑ "Scott Patterson AMA". Reddit. July 6, 2012.
  18. 1 2 Patterson, Scott (January 22, 2010). "The Minds Behind the Meltdown". Wall Street Journal.
  19. 1 2 Patterson, Scott (September 22, 2011). "How Math Whizzes Helped Sink the Economy". Scientific American.
  20. 1 2 Patterson, Scott (February 11, 2010). "Wall St maths geniuses whose models did not add up". Financial Times.
  21. ↑ Task, Aaron (February 11, 2010). "Rise of the Machines: How "Quant" Trading Triggered the Credit Crisis". Yahoo! Finance.
  22. 1 2 Brown, Aaron (June 26, 2012). ""Dark Pools": An Exciting Thriller That Will Teach You About Trading". Minyanville.
  23. 1 2 Carter, Jeff (July 9, 2012). "Dark Pools: High-Speed Traders, A.I. Bandits, and the Threat to the Global Financial System". Points and Figures.
  24. ↑ "Jon Stewart Interviews 'The Quants' Author: Did Physicists Bring Down Wall Street?". Huffington Post. May 5, 2010.
  25. ↑ Stewart, Jon (March 4, 2010). "Scott Patterson". The Daily Show.
  26. 1 2 "High Speed Threats to Global Financial Systems". CNBC. June 12, 2012.
  27. ↑ "Taking The Market Out Of The Market". SeekingAlpha. June 22, 2012.
  28. ↑ Durden, Tyler (June 30, 2012). "The Dark (Pool) Truth About What Really Goes On In The Stock Market". ZeroHedge.
  29. ↑ Durden, Tyler (July 1, 2012). "The Dark (Pool) Truth About What Really Goes On In The Stock Market: Part 2". ZeroHedge.
  30. ↑ Durden, Tyler (July 2, 2012). "The Dark (Pool) Truth About What Really Goes On In The Stock Market: Part 3". ZeroHedge.
  31. ↑ Durden, Tyler (July 10, 2012). "The Dark (Pool) Truth About What Really Goes On In The Stock Market: Part 4". ZeroHedge.
  32. ↑ Covel, Michael (June 21, 2012). "Scott Patterson — Dark Pools: High-Speed Traders, A.I. Bandits, and the Threat to the Global Financial System". Michael Covel.
  33. ↑ Leinweber, David (July 11, 2012). "The Algorithmic Monsters Threatening The Global Financial System". Forbes.


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