Flash Boys by Michael Lewis Why Aren’t They Shouting? by Kevin Rodgers Inventing Money by Nicholas Dunbar Bloomberg by Bloomberg by Michael R. Inventing Money: The Story of Long-Term Capital Management and the Legends Behind It (). By Nicholas Dunbar John Wiley & Sons, Inc., Third Avenue. This excellent book is focused on the demise of Long-Term Capital Management (LTCM) – a hedge fund which imploded in

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Although this part of the story is told in Dunbar’s book, an even better telling of this side of the tale is given in Roger Lowenstein’s book When Genius Fails. Incredibly, it was the assumptions nichooas deep in the small print of Iinventing and Mertons theory on option pricing that had begun to break down, and during that fateful summer of this breakdown was further aggravated by the regulatory-approved risk management systems designed to avert such a disaster.

LTCM nearly brought down the world economy – and would have if it weren’t for the bailout. Paperbackpages. The Washington Post described the collapse of the massive hedge fund Long-Term Capital Management as “one of the biggest financial missteps ever to hit Wall Street.

In the opening act John Meriwether, the founding partner of LTCM and one of the pioneers in bringing those trained in physics, mathematics and quantitative finance to Wall Street, is forced out of Salomon Brothers in a US Treasury Bill bidding scandal. Published December 22nd by Wiley first published Nichilas 31st Want to Read Currently Reading Read. Once there is a rumor that you are in trouble, you are in much more trouble. Books by Nicholas Dunbar.


In the end much of the personal wealth of the LTCM founders is destroyed. The financial markets in the United States are the largest and most powerful markets in the world. Nicholxs 15, John Shelburne rated it it was amazing.

Oct 17, Andy rated it really liked it. He spent the next few years working in feature films and television, in a wide range of capacities.

Better than Lowenstein’s book. This is a powerful story telling technique.

Overly complicated illiquid products being bought and sold that no one understood! Built on genius, by legends of Wall Street and two Nobel laureates, it spiralled to ever greater heights, commanding unimaginable wealth. The rest of the book details the events that lead up to the failure. Jesse Mckendry rated it really liked it Oct 27, Compared to mutual funds, hedge funds offer a higher rate of return. Kumar Ayush rated it it was amazing Dec 09, While market equilibrium may be true in the long run, there can be “mispricings” that can persist for periods of time long enough to lose five billion dollars.

Inventing Money: The Story of Long-Term Capital Management and the Legends Behind It

Markets have their dark side as well. Nicholas Dunbar No preview available – Added to Your Shopping Cart. No eBook available Amazon. ,oney library Help Advanced Book Search.

Inventing Money by Nicholas Dunbar

The models assumed that markets are always liquid e. During the Reagan years Michael Milken and Drexel Burnham used junk “high-yield” bonds to fund a vast corporate takeover boom that resulted in massive job losses, while enriching those who manipulated this game of greater fools. One of the benefits of being a “high net worth individual” is that you can invest in hedge funds, which are not regulated as mutual funds are.


It’s amazing that history repeated itself less than a decade later on a much larger scale. Also, the counterparties didn’t know about the offsetting trades because of secrecy from LTCMso they thought the risk was higher than it actually was.

Rather than retire to an exclusive golf course, he founds LTCM. As a result, all quotes used in this review fall under the doctrine of fair use. A brave and ambi LTCM was the fund that was too big to fail, the brightest star in the financial world. Table of contents Preface to the Paperback Edition. Evan Gorman rated it it was amazing Mar 02, Dunbar keeps it as simple as possible without dumbing it down nor being patronising, a very tough skill that he achieved very well.

Lists with This Book. In the second act LTCM applies financial models that assume that markets are logical and will dubnar tend toward equilibrium. Just a moment while we sign you in to your Goodreads account.