When Genius Failed: The Rise and Fall of Long Term Capital Management

Front Cover
HarperCollins Publishers, Jan 30, 2014 - Business & Economics - 288 pages

Charts are best viewed on a tablet.

Picking up where Liar’s Poker left off (literally, in the bond dealer’s desks of Salomon Brothers) the story of Long-Term Capital Management is of a group of elite investors who believed they could beat the market and, like alchemists, create limitless wealth for themselves and their partners.

Founded by John Meriweather, a notoriously confident bond dealer, along with two Nobel prize winners and a floor of Wall Street’s brightest and best, Long-Term Captial Management was from the beginning hailed as a new gold standard in investing. It was to be the hedge fund to end all other hedge funds: a discreet private investment club limited to those rich enough to pony up millions.

It became the banks’ own favourite fund and from its inception achieved a run of dizzyingly spectacular returns. New investors barged each other aside to get their investment money into LTCM’s hands. But as competitors began to mimic Meriweather’s fund, he altered strategy to maintain the fund’s performance, leveraging capital with credit on a scale not fully understood and never seen before.

When the markets in Indonesia, South America and Russia crashed in 1998 LCTM’s investments crashed with them and mountainous debts accumulated. The fund was in melt-down, and threatening to bring down into its trillion-dollar black hole a host of financial instiutions from New York to Switzerland. It’s a tale of vivid characters, overwheening ambition, and perilous drama told, in Roger Lowenstein’s hands, with brilliant style and panache.

What people are saying - Write a review

User ratings

5 stars
5
4 stars
6
3 stars
5
2 stars
0
1 star
0

LibraryThing Review

User Review  - kukulaj - LibraryThing

The main story here runs 1993 to 1998, from the start of LTCM to its collapse. There are lots of bits and pieces to the story. There is the arrogant confidence of the partners. There's how they ... Read full review

LibraryThing Review

User Review  - EricCostello - LibraryThing

This book examines the history of Long Term Capital Management, a firm that failed during the 1998 financial crisis, and explains how the firm was built and constructed, and why it collapsed. Pretty ... Read full review

Other editions - View all

About the author (2014)

Roger Lowenstein has reported for the Wall Street Journal for more than a decade and is a frequent contributor to the New York Times and The New Republic. He is the author of Buffet: the Making of an American Capitalist.

Bibliographic information