Quant funds being hit

This article for the NYTimes is very interesting. Basically, it says that the major quant focused funds have been hit by the down turn in the equities and structured products market. What is interesting, is that you would think the funds would have models set up to anticipate this correction and would have shorts out to cover their losses. I mean, it's only 800 points that the DJIA has lost! Plus, in general, volatility should be good for a fund as they can make the money on the speed of the execution. You'd expect the mutual funds to lose money.

I'm going to ponder this a little more ...