Review
"...a primer for those interested in the world of financial theory."
--Financial Times
"Inventing Money is not the last word on the subject, but it is a good start."
--The Economist
"Dunbar tells the full story of this most public of financial disasters, unveiling previously undisclosed information, in captivating and accessible terms."
--EuroBusiness
"Mr Dunbar has gained the rare distinction of writing an interesting and informative book on a very complex financial subject and for that he deserves much credit."
--Offshore Financial Review
"Dunbar offers us a well-written and informative account of how the company's culture developed, and why LTCM plummeted so dramatically."
--Balance Sheet
"It is a fast moving and readable account that explains the development of finance over the centuries before recounting the brief but eventful life of LTCM."
--Risk
"A fascinating tale, not to be missed."
--Chartered Secretary
"...his brave effort to explore the LTCM fiasco, its origins, and its ramifications. Dunbar is a former academician and journalist, making him an ideal writer to explore the theoretical origins of LTCM.
The author excels with his affectionate portrait of financial-theory giants such as the late Fischer Black. This book is a good source of information on the theoretical underpinnings of modern arbitrage."
--Business Week
"Nicholas Dunbar has written a fascinating account of this spectacular episode, and in doing so has provided an instructive insight into the functioning of global capitalism."
--CIB News
"Nicholas Dunbar's fascinating book is well-written. The book should appeal to a wide audience. Economists should certainly read it. Dunbar writes in a clear and accessible manner."
From the Inside Flap
In the story of Long-Term Capital Management the facts speak for themselves.
* December 1992, former Salomon Brothers' Vice-Chairman John Meriwether teams up with two Nobel laureates - Myron Scholes and Robert Merton - together with his team of huge-earning arbitrage traders to found LTCM
* in both 1995 and 1996 LTCM returns net profits of over 40%
* in November 1997 LTCM hands back US$2.7 billion "excess capital" to investors
* in early 1998 LTCM increased its portfolio of assets to US$130 billion and commanded a derivatives portfolio with a notional value of US$1.25 trillion
* in August/September 1998 the total value of assets on the world's markets declines by US$3 trillion
* by September 1998 LTCM loses 90% of its value and has to be bailed out to the tune of US$3.6 billion
* from September 1998 to the present day, the ripples of this collapse continue to be felt across the globe
But try to look behind these bald facts, and the picture becomes shrouded in mystery. The diverse nature of LTCM's trading, which only allowed insiders to know the full picture, has confused many onlookers seeking to piece together the puzzle. It has been described as the equivalent to three blind men standing by an elephant: the first grabs the tail and thinks it's a snake, the second leans against it and thinks it's a wall and the third reaches out to the trunk and believes it to be a branch. In Inventing Money Nicholas Dunbar strips away the shroud of mystery and complexity to tell the complete story of this most public of financial disasters in a captivating and accessible style. Inventing Money is in equal measure the story of the strategy and people behind the collapse of one of the world's largest hedge funds, an explanation of how the modern world of finance functions and a walk through the historical development of this multi-billion dollar industry.
