Tuesday, March 24, 2009

Book Rec - When Genius Failed

Even though I lived/traded through the Long Term Capital stock mini-crash in 1998, the details of what happened never prompted my interest.

All I knew was that some big hedge fund imploded and it/*its counterparties*/*its investors* essentially got bailed out by the Fed - or so I thought. [And that my trading account got hammered at the time.]

Anyway, having recently met a family member of one of the protagonists, my curiosity in this subject was piqued. I procured Roger Lowenstein's book and must say that it's a great story, a great read, and more importantly an insightful window into today's markets, ravaged by leverage and credit crunches.

Wall Street really hasn't changed in 100 years - and it's probably unlikely to do so over the next 100 as well.


Taylor Conant said...

I agree with you, it's a good read from a number of perspectives. The hubris of these academics and traders was incredible. Additionally, the response to the blow-up is almost identical to what's going on now. Washington works for the bankers and vice versa. Nothing's changed, the only thing that might change is that this time they did themselves in so good they might not survive their wounds.

Michael Davey said...

Thx, I'll check this out.
I don't now if you caught the Michael Lewis article from December, but it is a great read (be sure to click for subsequent pages - total is about 8 or so p's)

His new book came out 1 year too soon, apparently - too bad cuz this is much more interesting...


CaptiousNut said...

Thanks MD.

I think I've heard of that article but only just now read it. It was great insight from a great author.

Make sure you read Moneyball - which I believe is more appropriate for traders than baseball aficionados.

Here's my post on it - Empiricism - The Only Science.

Michael Davey said...

I did enjoy Money Ball and even Liar's Poker (though i can hardly remember that one)