Lowenstein offers top-notch journalism and finance knowledge.

His unique approach combines in-depth understanding of the financial world with engaging and often humorous storytelling.

This not only makes the complex subject matter more accessible but also adds an element of entertainment to the learning experience.

With his expertise, Lowenstein is able to provide valuable insights and analysis that can help readers make informed decisions in the financial realm.

Whether you are a seasoned investor or just starting to learn about finance, his work is sure to offer something of value.

The financey humor he injects into his writing serves to lighten the mood and make the content even more enjoyable to consume.

Overall, Lowenstein's contributions to the fields of journalism and finance are highly regarded and deserve to be recognized.

Big up to him for his excellent work!

Roger Lowenstein's book offers a truly captivating exploration of what transpires when even highly intelligent individuals place excessive reliance on models and overlook the human element in the realm of investing. Their models failed to account for the fact that when individuals are driven by fear and greed, they are capable of exhibiting extreme behavior. As John Maynard Keynes is quoted as saying in the book, "Markets can remain irrational longer than you can remain solvent." LTCM unfortunately discovered the truth of this statement too late.

In its early years, LTCM achieved remarkable returns through the utilization of leverage, derivatives, and favorable credit terms from its banks. However, when the market deviated from the behavior predicted by LTCM's models, the firm's leverage and large, illiquid trades led to a rapid downward spiral. Even if their predictions had ultimately proven correct, they simply could not maintain solvency for a sufficient period to reap the benefits of their risky trades.

The story of LTCM, as vividly recounted by Lowenstein, is indeed fascinating. But what intrigues me the most is the seemingly lack of a lasting lesson learned by the Wall Street banks from this debacle. To prevent systemic losses across the financial system, 14 banks, including prominent firms like Lehman Brothers, Merrill Lynch, Chase, Goldman Sachs, Salomon Smith Barney, and UBS, ultimately bailed out the LTCM fund. These financial institutions witnessed firsthand the catastrophic losses that could result from overleveraging, the excessive use of derivatives, and the provision of easy credit terms to borrowers. And yet, many of these same firms endured severe losses in 2008 due to these very same factors. It truly makes one wonder whether this cycle of greed and fear is doomed to repeat itself or if a new paradigm will emerge among financial institutions and regulators to safeguard against such meltdowns in the future.

Great finance book - definitely on par with \\"The Big Short\\" and \\"Liar's Poker\\". It is truly a satisfying read to learn about the brash Wall Street \\"geniuses\\" whose overconfidence led to their spectacular downfall.

There are numerous fascinating insights about markets. Firstly, \\"Markets conspire against the weak\\". Once the fund began to lose money, several fatal processes were set in motion, accelerating the decline. LTCM's positions were so massive that any move it made would impact the market. When it started divesting, it only drove prices in the wrong direction during liquidation. Also, the large banks that had transactions with LTCM knew some of its positions and sold ahead or waited to buy after its collapse. As the firm searched for capital, it had to disclose more about its positions, and the more desperate it became, the more the big banks sensed opportunity.

Secondly, markets are not rational. The professors' belief that models could forecast behavior limits was flawed. Models can only show what was reasonable or predictable based on the past, overlooking that people, including traders, are not always rational. This is the true lesson from Long-Term's failure. Traders are not machines but are impressionable and imitative, moving in flocks.

Thirdly, success has inherent natural limits. It attracts imitators who quickly erode previously high margins. In LTCM's case, its initial success led to massive capital inflows, both its own and its competitors', into the trades it specialized in, drying up the market. After great success and large investment flows, it succumbed to the temptation to invest elsewhere and started buying options on speculation.

Finally, the risk probabilities of not entirely independent events can spiral out of control rapidly, and using the past to predict the future is a folly. LTCM had complex models to calculate portfolio risk, but they were based on a wrong understanding of risk interconnectedness. Conceptual models are only as powerful as our ability to accurately understand the simulated conditions and forces, and LTCM had too much confidence in its models. \\"You can overintellectualize these Greek letters\\", Pflug reflected, referring to the option trader's jargon, and added that \\"hubris\\" should also be included.

This is a very well-researched and written book that reads a lot like 'More Money Than God'. It should serve as a bible for financial market professionals regarding the consequences of bad risk-management.

The book is divided into two parts. The first part details the stellar rise of LTCM, starting from the early days of Meriwether at Arbitrage (Salomon Brothers) and leading up to the founding of LTCM. The major trades that contributed to the making of LTCM are described in great detail. The second part focuses on its dramatic fall. The book delves into the numerous risk-management and organisational structure flaws at LTCM, along with the stories and reasons for their emergence.

The fall is explained in almost daily/weekly commentary, accounting for the systemic market reasons behind the LTCM collapse. Global events such as the Asian currency crisis and the Russian collapse are analysed with a cause-effect approach. The latter part of the book also details the entire bailout process of LTCM in amazing detail, on a chronological meeting-by-meeting basis, providing insights into the regulatory setup and the big-boys table of finance in the United States.

There are several aspects that can be learned from the LTCM story. These include the importance of leverage management and the risks of discretionary trading, as the human mind is often biased and oblivious. It also highlights the need to know the limitations of statistical models and the criticality of comprehensive backtests, especially for risk control metrics. Position sizing in risk management is crucial, as is the importance of a proper organisational structure at trading firms. Additionally, the cyclicity of finance/economics means that bad times follow good times and vice versa. Authority is never infallible, as seen at LTCM where clients were impressed by the team's credentials and neglected due-diligence. Finally, unknown unknowns can have a significant impact.

This book is an absolute 5/5!

Much has now been written about the general ideas underlying the LTCM failure and subsequent bailout.

However, I truly valued Lowenstein's firm stance against the firm's methods. LTCM's dedication to quantitative analysis and trading approaches can now be observed spreading across Wall Street as firms become more "quanty."

Lowenstein raises valid concerns and has some notable quotes in the epilogue that I liked. For example, "the next time a computer with a perfect memory of the past is said to quantify risks in the future, investors should run - and quickly - the other way."

Also, "the investor who is highly leveraged and illiquid is playing Russian roulette, for he must be right about the market not merely at the end, but every single day." We witnessed the madness of LTCM's derivatives-backed leverage leading to their downfall, and similar methods continued to be employed (repo loans being especially notable) up to the 2007 financial crisis.

Written in 2000, Lowenstein's query about how the Fed-facilitated buyout of LTCM by the big banks would impact future willingness to take on major risk has an air of prescience. He asked, "Will investors in the next problem-child-to-be, having been lulled by the soft landing engineered for Long-Term, be counting on the Fed, too?" Well, we now know that they would be.

The only drawback, in my opinion, is the writing style, which can be dull and wordy at times, causing me to reread sentences frequently as my attention would wander. Overall, I would rate it 3.9/5.0.

I found this book to be a rather challenging read.

Particularly, I felt that the financial terms used within it were often quite incomprehensible.

The book delves into the hubris of a group of traders and academics who firmly believed they possessed an unbeatable system to conquer the markets.

Spoiler alert: they were indeed mistaken.

The conclusion is quite disheartening.

It transpires that after wagering enormous sums of money and then being rescued by the banks from which they had borrowed, the key players had clearly not absorbed their lesson.

Instead, they all returned to attempting to amass as much wealth as possible, simply because they thought they were intelligent enough to achieve it.

I would not recommend reading this book unless you already have an excellent understanding of options and spreads.

Moreover, it is advisable only if you hold a rather optimistic perspective regarding rampant capitalism.

Overall, I would rate this book 2.5 out of 5.

Theory and reality are not always in sync. In theory, many aspects are simplified and idealized, but real world conditions are often complex and multifaceted, and cannot be fully accounted for in theory.

This book offers profound insights into the human condition. It reveals how greed and arrogance can grip even the most intelligent individuals, leading them astray. It also shows how emotions can be highly volatile during times of uncertainty, making rational decision-making difficult. As previously mentioned, our perception is not always an accurate reflection of reality.

Despite the continuous development of numerous well-proven theories every day, financial booms and crashes still occur. Markets and people have the ability to behave irrationally for extended periods, longer than one might be able to maintain financial solvency.

Sorry if this seems like a random word dump. It's just an attempt to expand on the original ideas.

Although the author's writing style may not possess the same captivating allure as that of Michael Lewis, renowned for works like "The Big Short" and "Liar's Poker," it remains lucid and effortlessly comprehensible.

The causes of this particular debacle are meticulously laid out and expounded upon, with a concise summary provided at the conclusion. Moreover, the author offers incisive commentary on the likelihood of such an event recurring. It is truly chilling to peruse a book published in 2000 that clearly delineates some of the crucial factors contributing to the meltdown that occurred in 2007 - 2008.

However, I believe the author becomes somewhat muddled in his conclusions. While I wholeheartedly concur that permitting failure is an indispensable aspect of the capitalist system, he appears to advocate for clear corporate reporting and government regulation as if they were indistinguishable. If it were possible to award half stars, this work would merit a rating of 3.5 rather than a mere 3.

Overall, despite its flaws, the book still provides valuable insights into the complex web of events that led to the debacle and serves as a thought-provoking read.

When Genius Failed is an incredibly captivating account that chronicles the downfall of Long Term Capital Management.

This is my second encounter with this book. The first time was three years ago when I was a bit less experienced. And truly, it was an interesting moment to read it again. Against the backdrop of Liberation Day and the (potential) unwinding of the basis trade, this book was the perfect choice to peruse over the past few days. Although, in the end, it turned out to be a rather terrifying read.

The book delves deep into the history of LTCM and seemingly has unrivaled access to the conversations both within the firm and between the banks that came to its rescue.

What makes this book so powerful is not merely the access (which is remarkable) or the elegance of the writing. It is the way it captures the emotional journey of the LTCM story. At the zenith of their success, the fund's partners were convinced that their models were infallible. The volatility of their returns was much lower than they had anticipated, with almost no losses. Their returns astonished Meriwether (and William Sharpe!), yet not enough to prompt an examination of the reasons why. In essence, LTCM was unknowingly selling the tails of the distribution. Eventually, the tails arrived, and they were liquidated.

There are numerous lessons to be learned: the perils of selling skew, the illusion of diversification during crises, and the deadly combination of illiquidity and leverage. Perhaps the most haunting aspect is how easily intelligent people can disregard evidence that contradicts their worldviews.

As the echoes of 1998 once again reverberate through the markets, When Genius Failed feels less like a postmortem and more like a cautionary tale about human nature.

Math professors are often regarded as highly intelligent individuals with extensive knowledge and expertise in the field of mathematics. However, the statement "Math professors not smart" is a rather bold and perhaps inaccurate generalization.

While it is true that no one is perfect and there may be some math professors who may not possess the highest level of intelligence in every aspect, it is unfair to simply label them all as not smart. Math professors undergo years of rigorous education and training, specializing in advanced mathematical concepts and theories. They are able to solve complex problems, conduct research, and communicate their ideas effectively.

Moreover, intelligence is a multi-faceted concept that cannot be simply measured by one's knowledge of mathematics. Math professors may also possess other valuable qualities such as creativity, critical thinking skills, and the ability to work well with others. These qualities contribute to their overall effectiveness as educators and researchers.

In conclusion, while it is possible that there may be some exceptions, it is inaccurate and unfair to claim that math professors are not smart. We should recognize and appreciate the hard work and dedication that they put into their field, and respect their expertise and contributions.

Bloody hell! This phrase is often used to express surprise, shock, or frustration. It has a rather vivid and intense connotation.

For example, if you see something unexpected and astonishing, you might exclaim, "Bloody hell!" It can convey a sense of being caught off guard or being overwhelmed by a situation.

This expression is quite commonly used in British English, although it may also be heard in other English-speaking regions. However, it is considered a bit more informal and perhaps even a bit vulgar in some contexts.

Despite its somewhat rough nature, "Bloody hell" can add emphasis and color to your speech, allowing you to express your emotions more strongly. Just be careful when using it, as it may not be appropriate in all situations.

So, the next time you find yourself in a state of surprise or frustration, you might just be tempted to let out a "Bloody hell!" But remember to use it sparingly and consider your audience.

I really, really liked this book.

The reason I didn't always understand it was mainly because I only read it in bed before going to sleep. It's not that the book is boring or anything.

I just wanted to read a book before bed instead of using my phone, so I read a few pages of this every night to help me fall asleep.

Lowenstein does an excellent job of explaining arbitrage, bond spreads, and all kinds of complex financial operations in an easy-to-understand way.

I was impressed by the emergence of a highly interconnected global economy, the omnipresence of which I largely take for granted in this era.

It's a great book and a smooth, quick read!