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Lowenstein, a financial journalist and author of Buffett: The Making of an American Capitalist, 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.
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.
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. --S. Ketchum --This text refers to an out of print or unavailable edition of this title.
Change the names a bit and you have the GFC 10 years earlier than it happened at a smaller scale.Published 6 days ago by Graham Marshall
Although clearly sarcastic, I still think the title is a little too generous.
What is truly frightening about this account is not so much the details of how it came to... Read more
A highly captivating drama regarding the rise and fall of LTCM, and a solid example of what greed, hubris and blind compliance can do to the economy and all of us.Published 26 days ago by J.I
Its both an interesting and illuminating read as a stand alone. However, in comparison to similar books like Barbarians at the Gate, Smartest Guys in the Room or too Big to Fail,... Read morePublished 1 month ago by Sean McGarry
Watching pompous arrogant people stub their toes is a popular sport for couch potatoes. If either of those descriptions apply to you, you will probably enjoy the book. Read morePublished 1 month ago by M. P. Henley
Great insight into fall of LTCM, only thing I would have liked to have more detailed description of the fall of their second hedge fund.Published 1 month ago by Martynas Kvasis
A great read that gives the details of LTCM. This is a well written book that is good for anyone considering working for a hedge fund.Published 2 months ago by DBB