The fund's enigmatic founder, John Meriwether, spent almost 20 years at Salomon Brothers, where he formed its renowned Arbitrage Group by hiring academia's top financial economists. Lowenstein, a financial journalist and author of Buffett: The Making of an American Capitalist, examines the personalities, academic experts, and professional relationships at LTCM and uncovers the layers of numbers behind its roller-coaster ride with the precision of a skilled surgeon. Roger Lowenstein's When Genius Failed is the gripping story of the Fed's unprecedented move, the incredible heights reached by LTCM, and the firm's eventual dramatic demise.

Around the table sat the heads of every major Wall Street bank, the chairman of the New York Stock Exchange, and representatives from numerous European banks, each of whom had been summoned to discuss a highly unusual prospect: rescuing what had, until then, been the envy of them all, the extraordinarily successful bond-trading firm of Long-Term Capital Management. As Lowenstein shows in his new Afterword, the story of the Nobel Prize-winning hedge fund “geniuses” is truly a parable for market meltdowns in an age of instability.On September 23, 1998, the boardroom of the New York Fed was a tense place. Since the mortgage meltdown that would strike all of Wall Street, from Lehman Brothers to AIG, a decade later, When Genius Failed seems only more timeless. The Fed-orchestrated private bailout of Long-Term, forced on the big banks in 1998, shocked Wall Street and shattered all precedent. But after four years in which the firm dazzled Wall Street as a $100 billion moneymaking juggernaut, it suddenly suffered catastrophic losses that jeopardized not only the biggest banks on Wall Street but the stability of the financial system itself. When it was founded in 1993, Long-Term was hailed as the most impressive hedge fund in history. Drawing on confidential internal memos and interviews with dozens of key players, Lowenstein explains not just how the fund made and lost its money but also how the personalities of Long-Term’s partners, the arrogance of their mathematical certainties, and the culture of Wall Street itself contributed to both their rise and their fall. hedge fund, Long-Term Capital Management. 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 the Greenwich, Ct. The emblematic market meltdown story-how the smartest hedge fund ever failed.

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When genius failed