Tumblroth

A few weeks ago I sent Felix Salmon a link to my latest essay in WIRED. My piece is about how we’d all be better off if the smartest people coming out of our top universities stayed away from Wall Street — and that this recession might be the only way to make that happen.

Felix questioned one part of the story, in which I say:

On Wall Street, work in the lab never leaves the building; after all, a trading strategy’s value disappears when it goes mainstream. An innovation might strengthen capital markets, but the possibility of that research benefiting another industry—the kind of cross-pollination that turned Velcro from a NASA oddity into a modern staple—is eliminated.

To which Felix replied:

Does it really never go in the other direction? Doesn’t Jim Simons support loads of pure research at Stonybrook? And what about this? http://www.deshawresearch.com/

Curious, I sent DE Shaw Research an email asking whether cross pollination ever happens. If so, I thought it could make a great story. Three weeks later, David Shaw’s deputy came back with an answer: Doesn’t happen.

Here’s the reply:

On 7/7/09 11:33 AM, Dror, Ron wrote:

Dan,
Although David Shaw, who is Chief Scientist of D. E. Shaw Research (DESRES, the computational biochemistry research lab), also founded D. E. Shaw & Co. (DESCO, the investment firm) twenty years ago, DESRES and DESCO are actually completely separate, and there is no “cross pollinating” between the two. DESRES does publish scientific results (through peer-reviewed academic journals and conferences), but this is definitely not an example of the dissemination of “Wall Street” research, so there’s no reason for you to worry about having made a mistaken claim in your essay.
Best regards,
Ron

This should settle the torrent of emails (none) that I’ve been getting asking for an answer to the question.