This Study Guide consists of approximately 30 pages of chapter summaries, quotes, character analysis, themes, and more - everything you need to sharpen your knowledge of When Genius Failed. This section contains words. In this business classic—now with a new Afterword in which the author draws parallels to the recent financial crisis—Roger Lowenstein captures the gripping roller-coaster ride of Long-Term Capital Management.
When it was founded in , Long-Term was hailed as the most impressive hedge fund in history. McDonough, the beefy president of the New York Fed, talks to bankers and traders often. McDonough wants to be kept abreast of the gossip that traders share with one another. He especially wants to hear about anything that might upset markets or, in the extreme, the financial system.
But McDonough tries to stay in the background. The Fed has always been a controversial regulator—a servant of the people that is elbow to elbow with Wall Street, a cloistered agency amid the democratic chaos of markets. For McDonough to intervene, even in a small way, would take a crisis, perhaps a war.
And in the first days of the autumn of , McDonough did intervene—and not in a small way. As long as the markets behaved in this way, the traders made hundreds of millions of dollars. Arbitrage trading was considered to be very low risk. Meriwether developed the Arbitrage department at Salomon Brothers, hiring academics to develop mathematical and computerized models to predict prices based on market volatility. When Meriwether left Salomon, he basically duplicated the set-up he had there and hired away many of the traders and staff to form Long-Term.
The hedge fund was set up with a system of feeders as a Cayman Islands partnership and had a Long-Term Capital Management company which managed the investments of the partners. Hedge funds were not subject to stringent reporting requirements at the time, so they operated without even letting their investors know what the portfolio's invested in or what their exposure was.
The investors didn't really care because of the amount of money they were making. DMCA and Copyright : The book is not hosted on our servers, to remove the file please contact the source url. If you see a Google Drive link instead of source url, means that the file witch you will get after approval is just a summary of original book or the file has been already removed. Loved each and every part of this book. I will definitely recommend this book to economics, finance lovers.
0コメント