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.
excellent reading giving a good insight of how things can very wrong very fast in the finance worldPublished 2 days ago by JOHN CALDWELL
Very good insight into the players involved in long term capital's insolvency. The technical aspect is not emphasized as much as the management is emphasized. Read morePublished 7 days ago by Travel the road
Very interesting read on how greed overtakes mind and educationPublished 10 days ago by Amazonbuyer
Lowenstein displays remarkable prescience. Not only is "When Genius Failed a Great Read," it accurately foreshadows the "weapons of mass destruction" risks, to... Read morePublished 17 days ago by Jim
Fascinating and infuriating in equal measures --- especially the level of arrogance that supposedly smart people can exhibit while burning their bridges ---- highly recommended.Published 1 month ago by firstname.lastname@example.org
Change the names a bit and you have the GFC 10 years earlier than it happened at a smaller scale.Published 1 month 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 2 months ago by J.I