When Genius Failed

In When Genius Failed Roger Lowenstein captures the roller-coaster ride of Long-Term Capital Management in gripping detail. When it was founded in 1993, Long-Term was hailed as the most impressive hedge fund in history. Led by the notorious successful bond arbitrager John Meriwether, the firms boasted a partnership that included two Nobel Prize-winning economists and a cadre of Wall Street's and academia's elite traders. But after four years in which the firm dazzled Wall Street as a $100 billion moneymaking juggernaut, it suddenly suffered catastrophic losses that jeopardized not only the biggest banks on Wall Street but the stability of the financial system itself. Today, Long-Term's name is synonymous with financial disaster.

Drawing on confidential internal memos and interviews with dozens of key players, Lowenstein explains not just how the fund made and lost its money but also how the personalities of Long-Term’s partners, the arrogance of their mathematical certainties, and the culture of Wall Street itself in the late nineties contributed to both their rise and their fall. Its is the cautionary financial tale of our time, and in Lowenstein's hands it becomes a first-rate thriller peppered with fast money, vivid characters, and high drama.

• The Rise of long-Term Capital Management
1. Meriwether
2. Hedge Fund
3. On The Run
4. Dear Investors
5. Tug-of-War
6. A Nobel Price
• The Fall of Long-Term Capital Management
7. Bank of Volatility
8. The Fall
9. The Human Factor
10. At the Fed

An excellent description, not only of the fall of LTCM, but also about the money culture on Wall Street and elsewhere in the world. I think this is better than Lewis' Liars Poker in describing the mood of the investment bankers. Absolutely worth a read, but be warned that the author sometimes get carried away in a verbose mumbo-jumbo.