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When Genius Failed Audiobook

When Genius Failed: The Rise and Fall of Long-Term Capital Management

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Publisher's Summary

John Meriwether, a famously successful Wall Street trader, spent the 1980s as a partner at Salomon Brothers, establishing the best - and the brainiest - bond arbitrage group in the world. In 1991, in the wake of a scandal involving one of his traders, Meriwether abruptly resigned. For two years, his fiercely loyal team - convinced that the chief had been unfairly victimized - plotted their boss' return. In 1993, Meriwether gathered together his former disciples and a handful of supereconomists and proposed that they become partners in a new hedge fund different from any Wall Street had ever seen. And so Long-Term Capital Management was born.

Meriwether & Co. truly believed that their finely tuned computer models had tamed the genie of risk, and would allow them to bet on the future with near mathematical certainty. Thanks to their cast - which included a pair of future Nobel Prize winners - investors believed them. Four years later, when a default in Russia set off a global storm that Long-Term's models hadn't anticipated, its supposedly safe portfolios imploded. In five weeks, the professors went from mega-rich geniuses to discredited failures. The firm's staggering $100 billion balance sheet threatened to drag down markets around the world. At the eleventh hour, fearing that the financial system of the world was in peril, the Federal Reserve hastily summoned Wall Street's leading banks to underwrite a bailout.

Best selling author Roger Lowenstein captures Long-Term's roller-coaster ride in gripping detail. Drawing on confidential internal memos and interviews with dozens of key players, Lowenstein crafts a story that reads like a first-rate thriller from beginning to end. He explains not just how the fund made and lost its money, but what it was about the personalities of Long-Term's partners, the arrogance of their mathematical certainties, and the late-90s culture of Wall Street that made it all possible.

Executive Producer: Dan Zitt
Producer: Paul Ruben
Original cover design Kapo Ng
©2000 by Roger Lowenstein
(P)2001 Random House, Inc.

What the Critics Say

"This book is story-telling journalism at its best." (The Economist)
"Lowenstein [is] one of the best financial journalists there is¿" (New York Times Book Review)

What Members Say

Average Customer Rating

4.3 (1043 )
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4.2 (568 )
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Performance
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  •  
    Bill 12-09-16
    Bill 12-09-16 Member Since 2016
    ratings
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    17
    5
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    Performance
    Story
    "Uncommon sense"

    In an era where the foolishness of the efficient market hypothesis pervades and is being taught to future generations in almost all otherwise respectable business schools, the saga of LTCM remains and powerful warning to those few people clear headed enough to realize that human irrationality will never be successfully modeled nor eliminated.

    Of course most of Wall Street and most of the average person willfully forgets past unpleasantness for the illusion of future wealth, but hopefully this well written account of the history of LTCM will allow perhaps just a handful of people to remember to remain rational even when geniuses tout nonsense.

    If you can keep your head while others about you are losing theirs, you have an edge over even the brightest minds.

    Performance sounded a little boring but fine once you get used to it.

    0 of 0 people found this review helpful
  •  
    Donald M. Scott Durango, CO USA 12-08-16
    Donald M. Scott Durango, CO USA 12-08-16 Member Since 2014
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    10
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    "An excellent tale, well written and well read."
    Any additional comments?

    The author does an excellent job of bringing the characters and the hedge fund business to life. When I finished it I started from the beginning again.

    0 of 0 people found this review helpful
  •  
    Jerry Brandbergen, Sweden 10-09-16
    Jerry Brandbergen, Sweden 10-09-16 Member Since 2016
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    24
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    "Bad narrator"
    Is there anything you would change about this book?

    The narrator. I usually get through all of the books I start to listen to, even if they are bad. But this one, I just couldn't take it after a while. 4-5 words, pause, 4-5 words, pause, 4-5 words, pause... you get the picture.


    0 of 0 people found this review helpful
  •  
    Todd Muskego, WI, United States 08-04-16
    Todd Muskego, WI, United States 08-04-16 Member Since 2015
    HELPFUL VOTES
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    "Factual"
    Would you recommend this book to a friend? Why or why not?

    Perhaps, because the story has enough lessons to learn from.


    Who do you think would benefit most from listening to When Genius Failed?

    Anyone who has banked on modeled performance and is unwilling to accept when it is time to back off the plan.


    Any additional comments?

    This was very factual, and not nearly as enjoyable to listen to as say a Ben Mezrich or Michael Lewis story. That said, it was well researched and a good account of the LTCM story.

    0 of 0 people found this review helpful
  •  
    C. Lynch II 07-01-16
    C. Lynch II 07-01-16 Member Since 2013

    Gone to the dogs...

    HELPFUL VOTES
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    "Timely book for current times..."

    Good book. Crazy to think this was going on while I was asleep. I won't be caught off guard this time as Central Banks have made the entire world LTCM...

    0 of 0 people found this review helpful
  •  
    Ginger F. French 05-25-16
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    "No Tree is too Big to Gall"

    This is an in-depth review of the events that took place and nearly brought down the global financial world. Can it happen again, with more severe ramifications? The answer from the book is yes
    The need for those working in the financial markets to ALWAYS weigh. the risks being taken, is critical, whether seemingly large or small. LTCS was a "model" for arbitrage. The men who rode it to glory could not foresee the potential for problems arising until it was much too late. And they were not alone among financial entities in this position. The euphoria of money piling in "proving" their model to be right far overshadowed any doubts that this was a strong and capable way to grow money, with little risk. The clause immediately preceding this sentence was, indeed, proven to be incorrect. The risks were very great and ultimately brought those who had previously benefited close to the brink of ruin, in reputation, careers, and their personal solvency.
    Excellent read!

    0 of 0 people found this review helpful
  •  
    Nathan J Erickson 05-18-16 Member Since 2016
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    "Great!"

    As good as the big short, fascinating look at bond and merger arbitrage. Book also fills in details around the liars poker story and salomon brothers, how they made so much money. This would make a great movie if done right.

    0 of 0 people found this review helpful
  •  
    Vitor 05-07-16
    Vitor 05-07-16
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    4
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    "chapters"

    chapters are misconfigured somehow in the application, causing me to lose track of which chapter I actually was in the book. narrator was perfect though. great story.

    0 of 0 people found this review helpful
  •  
    ryon aguirre 04-21-16
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    "Great Story"

    What an excellent story of how complicated financial models can steer even the brightest people toward financial doom. Such an interesting story of genius, success, and ultimately failure. A must listen for those in finance.

    0 of 0 people found this review helpful
  •  
    Ryan S. Buckmaster 02-13-16 Member Since 2016
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    3
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    "A must listen for anyone serious about finance"

    Aside from being genuinely entertaining, it was quite educational. As someone with a career in investment management, specifically in bonds, I found it to be very useful. I highly recommend it.

    0 of 0 people found this review helpful

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