When Genius Failed

When Genius Failed

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

by ROGER LOWENSTEIN

Description

This book has long been considered as a classic on the discussion of Long-Term Capital Management. He talks about how the culture in Wall Street became one of the major factors in its rise and fall during the financial crisis. The author includes confidential internal memos connected to long-term capital management, as well as interviews with major figures that closely participated in the incident. Lowenstein shows how the fund rose to fortune and fame and how it suddenly fell—much like the fall of Lehman Brothers in the 2008 financial crisis.

The author did a good job of capturing the essence of how the long-term capital management interacted with Wall Street and the rest of the key market figures and showed how various factors contributed to its subsequent fall. He explains and narrates how the genius of the fund fell in a clear and detailed story. 

He also shows how the financial market can suddenly roil and lead many businesses, no matter how large, to fail. This book is a classic to what must and must not be done in trading to avoid a potential fall. This book is highly recommended to anyone interested in financial crises, especially as this one mirrors the most recent financial crisis in the United States. 

About the Author

ROGER LOWENSTEIN is a writer and a financial journalist. He is the director of the Sequoia Fund. He previously wrote for the Wall Street Journal for over ten years and also wrote for its Heard on the Street Column for two years. He went to Cornell University.

Table of Contents

Author’s Note and Acknowledgments

Introduction

THE RISE OF LONG-TERM CAPITAL MANAGEMENT

1 – Meriwether

2 – Hedge Fund

3 – On the Run

4 – Dear Investors

5 – Tug-f-War

6 – A Nobel Prize

THE FALL OF LONG-TERM CAPITAL MANAGEMENT

7 – Bank of Volatility

8 – The Fall

9 – The Human Factor

10 – At the Fed

Epilogue

Notes 

Index