This is a great book. It explains, in accessible language, one of the biggest financial crises ever to hit world markets. It is extremely well-researched and well-written. (I'm comparing it here to other financial-disaster books. I'm currently working on The Smartest Guys in the Room, which is not nearly as well-crafted.) "Genius" shows the progression of random and intentional events that led to the rise and eventual collapse of Long-Term Capital Management, which was an enormous hedge fund managed by a group who actually *were* the smartest guys in the room, including two Nobel laureates.
You might think "A book about a hedge fund? Boooring!" But you'd be wrong. This book is utterly fascinating, and even quite dramatic as it relates the events. Further, it is a very important book to have read, since the people and ideas involved in it are still relatively current today. Witness the present crisis in the high-risk mortgage industry, or the outrageously leveraged private equity deals of the past few years. While these may be different mechanisms than bond spread swaps, the kernel of the idea -- that you can eliminate risk by spreading it around and hedging it through complex derivatives and still get a good return -- still applies. The opacity of these instruments, and the inherent unpredictability and emergent characteristics of what turns out to be a complex system (see my current reads) work against best intentions and even the smartest of the smartest guys in the room