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

When Genius Failed by Roger Lowenstein chronicles the rise and collapse of Long-Term Capital Management. It is a non-fiction account of a hedge fund and the financial world that surrounded it.

Synopsis

Beginning on the bond-trading desks of Salomon Brothers, Lowenstein follows a circle of elite investors convinced they could outsmart the market and generate seemingly boundless wealth. Founded by John Meriweather alongside two Nobel Prize winners and a team drawn from Wall Street’s most celebrated talent, Long-Term Capital Management was quickly hailed as a new benchmark in investing, operating as a discreet private club for those able to commit millions.

Early success brought spectacular returns and intense demand from would-be backers, while banks came to view the fund as a favoured destination for capital. As rivals started to copy the approach, Meriweather shifted strategy to sustain performance, using credit to leverage the fund on a scale that was not fully understood at the time. The market shocks of 1998 in Indonesia, South America and Russia then exposed the risks, leaving LTCM facing enormous debts and a crisis that threatened financial institutions from New York to Switzerland.

Rackhams Reference : X8DCWVLYIT