Meanwhile, an army of PhDs, following our path, greatly expanded the theory of derivatives and implemented the revolution in quantitative finance on Wall Street. They helped direct investing at hedge funds, investment banks, and other institutions. Driven in part by the sell side—the sales force that finds and sells new products—these quants invented new derivative securities that the salespeople then pushed. These products undermined the world financial system in a series of increasingly grave crises. The first of these surprised almost everyone.
