Fundamentalists should be thanking the Fed and Quants should be short term

Clearly this is another opportunity for fundamental traders to exit/go short, courtesy of the fed :-)

As for quants, I take some solace to what AQR went through during the end of the 90's when they were down almost 50%!  They were doing what quants do - expecting the markets to behave somewhat like they had for the recent and long term past - somewhat rationally.  The late 90's bubble caused that strategy to fail and being the pioneers they were, they were still discovering the field as they went along.  Well, anyone using a similar strategy (including yours truly) has been having a less than pleasant time since the summer of '07 and all of this turmoil is upending much of what we 'know'.

Only quants trading very short term / high frequency have any hope of maintaining returns.  Until, that is, that trade gets crowded too. (Like the low vol RIEF-like trade got crowded coming into summer '07).

Now, its time to figure out how to profit from future bouts of 'lack of diversity' and 'tight coupling' :-)