false http://photo.goodreads.com/books/1166254591m/10669.jpg 10669 6 On September 23, 1998, the boardroom of the New York Fed was a tense place. Around the table sat the heads of every major Wall Street bank, the chairman of the New York Stock Exchange, and representatives from numerous European banks, each of whom had been summoned to discuss a highly unusual prospect: rescuing what had, until then, been the envy of them all, the extraordinarily successful bond-trading firm of Long-Term Capital Management. Roger Lowenstein's <I>When Genius Failed</I> is the gripping story of the Fed's unprecedented move, the incredible heights reached by LTCM, and the firm's eventual dramatic demise.<p> Lowenstein, a financial journalist and author of <I>Buffett: The Making of an American Capitalist</I>, examines the personalities, academic experts, and professional relationships at LTCM and uncovers the layers of numbers behind its roller-coaster ride with the precision of a skilled surgeon. The fund's enigmatic founder, John Meriwether, spent almost 20 years at Salomon Brothers, where he formed its renowned Arbitrage Group by hiring academia's top financial economists. Though Meriwether left Salomon under a cloud of the SEC's wrath, he leapt into his next venture with ease and enticed most of his former Salomon hires--and eventually even David Mullins, the former vice chairman of the U.S. Federal Reserve--to join him in starting a hedge fund that would beat all hedge funds.<p> LTCM began trading in 1994, after completing a road show that, despite the Ph.D.-touting partners' lack of social skills and their disdainful condescension of potential investors who couldn't rise to their intellectual level, netted a whopping $1.25 billion. The fund would seek to earn a tiny spread on thousands of trades, "as if it were vacuuming nickels that others couldn't see," in the words of one of its Nobel laureate partners, Myron Scholes. And nickels it found. In its first two years, LTCM earned $1.6 billion, profits that exceeded 40 percent even after the partners' hefty cuts. By the spring of 1996, it was holding $140 billion in assets. But the end was soon in sight, and Lowenstein's detailed account of each successively worse month of 1998, culminating in a disastrous August and the partners' subsequent panicked moves, is riveting.<p> The arbitrageur's world is a complicated one, and it might have served Lowenstein well to slow down and explain in greater detail the complex terms of the more exotic species of investment flora that cram the book's pages. However, much of the intrigue of the Long-Term story lies in its dizzying pace (not to mention the dizzying amounts of money won and lost in the fund's short lifespan). Lowenstein's smooth, conversational but equally urgent tone carries it along well. The book is a compelling read for those who've always wondered what lay behind the Fed's controversial involvement with the LTCM hedge-fund debacle. <I>--S. Ketchum</I> 13308 9 10 2000 When Genius Failed: The Rise and Fall of Long-Term Capital Management total:819|5:208|4:395|3:189|2:22|1:5| 819 3236 1168 129 5 0 false false Sat Nov 01 00:00:00 -0700 2008 Sat Dec 13 03:22:54 -0800 2008 Sat Dec 13 03:35:38 -0800 2008 more...]]> 4 0 true false Mon Sep 01 00:00:00 -0700 2008 Fri Oct 23 07:28:32 -0700 2009 Fri Oct 23 08:03:36 -0700 2009 2 more...]]> 4 0 false false Sat May 23 00:00:00 -0700 2009 Sat May 23 10:16:28 -0700 2009 Sat May 23 10:41:45 -0700 2009 more...]]> 5 0 false false Thu Jan 29 00:00:00 -0800 2009 Sun Jan 25 19:24:42 -0800 2009 Thu Jan 29 17:03:02 -0800 2009 more...]]> 4 0 false false Sun Jul 19 00:00:00 -0700 2009 Wed Jul 15 11:57:55 -0700 2009 Sun Jul 19 09:17:01 -0700 2009 more...]]> 5 0 false false Sat Oct 31 00:00:00 -0700 2009 Sat Oct 24 20:54:44 -0700 2009 Sat Oct 31 03:12:05 -0700 2009
What a fantastic read! Lowenstein is quit...more...]]> 3 0 false false Mon Jan 01 00:00:00 -0800 2007 Tue Aug 04 12:08:52 -0700 2009 Tue Aug 04 12:13:41 -0700 2009 more...]]> 4 0 false false Sun Oct 01 00:00:00 -0700 2006 Thu Dec 04 09:54:41 -0800 2008 Thu Dec 04 10:00:13 -0800 2008 more...]]> 4 0 false false Wed Nov 12 00:00:00 -0800 2008 Wed Oct 22 12:06:01 -0700 2008 Wed Nov 12 09:10:52 -0800 2008 more...]]> 5 0 false false Tue Apr 01 00:00:00 -0700 2008 Tue Apr 22 14:06:17 -0700 2008 Tue Apr 22 14:06:41 -0700 2008 more...]]> 3 0 true false Wed Jan 28 00:00:00 -0800 2009 Sun Feb 17 11:07:19 -0800 2008 Wed Jan 28 10:11:14 -0800 2009
It's essential...more...]]> 2 0 false false Fri Sep 01 00:00:00 -0700 2006 Fri Jan 11 17:37:51 -0800 2008 Sun Jan 13 16:55:29 -0800 2008 more...]]> 4 0 false false Sat Mar 01 00:00:00 -0800 2008 Mon Dec 24 22:49:38 -0800 2007 Fri Mar 21 02:20:04 -0700 2008 more...]]> 4 0 false false Sat Dec 01 00:00:00 -0800 2007 Sat Dec 22 06:04:50 -0800 2007 Sat Dec 22 06:11:42 -0800 2007
For those who don't know, Long Term Capital Management was a massive and massively leveraged hedge fu...more...]]> 5 0 false false Wed Aug 01 00:00:00 -0700 2007 Wed Sep 05 08:45:58 -0700 2007 Wed Sep 05 09:15:03 -0700 2007 more...]]> 5 0 false false Thu Feb 19 00:00:00 -0800 2009 Wed Aug 01 20:39:56 -0700 2007 Thu Feb 19 10:00:19 -0800 2009 more...]]> 5 0 false false Thu Apr 16 00:00:00 -0700 2009 Tue Sep 30 17:40:39 -0700 2008 Fri Apr 17 07:03:48 -0700 2009
The part that made me the most ha...more...]]> 4 0 false false Sat Nov 01 00:00:00 -0700 2008 Tue Apr 28 11:06:59 -0700 2009 Tue Apr 28 11:18:13 -0700 2009 more...]]> 4 0 false false Sat Jan 01 00:00:00 -0800 2005 Sun Sep 16 15:13:05 -0700 2007 Sun Sep 16 15:13:36 -0700 2007 more...]]> 5 0 false false Thu Dec 04 00:00:00 -0800 2008 Thu Nov 27 12:04:11 -0800 2008 Sun Dec 07 10:02:04 -0800 2008 more...]]> http://www.goodreads.com/book_link/follow/8?book_id=10669