Book Review: When Genius Failed ; the Rise and Fall of Long Term Capital Management
Book Reviews of:
When Genius Failed; the rise and fall of Long-term Capital Management by Roger Lowenstein
&
Monkey Business; swinging through the Wall Street jungle By John Rolfe and Peter Troob
When Genius Failed: The Rise and fall of Long-Term Capital Management by Roger Lowenstein
The book tells the story of long-term capital management. It is the detailed history of how a group of elite investors who called themselves the ‘LTCM’ (Long term capital management) contributed to the rise and fall of a hedge fund that brought the financial world to its knees when it lost $4 billion trading exotic derivatives. This short biography is in a nutshell about risk management, this is a gripping book of our era that tells the financial story of what happened to a group of intellectuals that believed that they could actually deconstruct risk and use virtually limitless leverage to create limitless wealth. The book describes the failure of Long term Capital management a hedge fund that was founded by John Meriwether. The infamous hedge fund that nearly collapsed the world's financial system, along with its many founders and advisors, including John Meriwether, David Mullins (former Vice Chairman of the Federal Reserve), Robert Merton and Myron Scholes (two esteemed academics in finance who won the Nobel price in economics in 1997). John Meriwether was one of the top bond traders at Salomon Brothers and later became head of the fixed income securities department (Mortgage security and bond trading). But Meriwether, to use Michael Lewis' term, was a Big Swinging Dick, a Master of the Universe, an Uber-Trader. Meriwether was one of the first people on Wall Street to recruit mathematicians and physicists from schools and turn them into bond traders. Old instincts of market traders are been replaced by mathematical pricing models and the old Wall Street operators are replaced by academic financial theory, which provides a new framework that allows markets to function
When Genius Failed; the rise and fall of Long-term Capital Management by Roger Lowenstein
&
Monkey Business; swinging through the Wall Street jungle By John Rolfe and Peter Troob
When Genius Failed: The Rise and fall of Long-Term Capital Management by Roger Lowenstein
The book tells the story of long-term capital management. It is the detailed history of how a group of elite investors who called themselves the ‘LTCM’ (Long term capital management) contributed to the rise and fall of a hedge fund that brought the financial world to its knees when it lost $4 billion trading exotic derivatives. This short biography is in a nutshell about risk management, this is a gripping book of our era that tells the financial story of what happened to a group of intellectuals that believed that they could actually deconstruct risk and use virtually limitless leverage to create limitless wealth. The book describes the failure of Long term Capital management a hedge fund that was founded by John Meriwether. The infamous hedge fund that nearly collapsed the world's financial system, along with its many founders and advisors, including John Meriwether, David Mullins (former Vice Chairman of the Federal Reserve), Robert Merton and Myron Scholes (two esteemed academics in finance who won the Nobel price in economics in 1997). John Meriwether was one of the top bond traders at Salomon Brothers and later became head of the fixed income securities department (Mortgage security and bond trading). But Meriwether, to use Michael Lewis' term, was a Big Swinging Dick, a Master of the Universe, an Uber-Trader. Meriwether was one of the first people on Wall Street to recruit mathematicians and physicists from schools and turn them into bond traders. Old instincts of market traders are been replaced by mathematical pricing models and the old Wall Street operators are replaced by academic financial theory, which provides a new framework that allows markets to function