Rating: 
Summary: Inventing Money vs. When Genius Failed
Review: This book is an enjoyable read and quite a page-turner as finance books go. The book emphasized the heroics and background of the financial engineers that built the LTCM machine. The author conveys a "starry eyed" tone which seemed inappropriate considering the culmination of the story. Conversely,"When Genius Failed" focuses more on the fallout of the fund. I recommend both books, however, if you are a financial practitioner, I suspect you would prefer, "When Genius Failed" for it's detailed account of the fall from grace. If terms like volatility and derivative are not in your daily vocabulary, read "Inventing Money" for a fantastic account of one of the more significant yet unknown stories of economic reality.
Rating:
Summary: Inventing Money vs. When Genius Failed
Review: This book is an enjoyable read and quite a page-turner as finance books go. The book emphasized the heroics and background of the financial engineers that built the LTCM machine. The author conveys a "starry eyed" tone which seemed inappropriate considering the culmination of the story. Conversely,"When Genius Failed" focuses more on the fallout of the fund. I recommend both books, however, if you are a financial practitioner, I suspect you would prefer, "When Genius Failed" for it's detailed account of the fall from grace. If terms like volatility and derivative are not in your daily vocabulary, read "Inventing Money" for a fantastic account of one of the more significant yet unknown stories of economic reality.
Rating:
Summary: Great insights, excellent read
Review: This is a fantastic book. Reads like a novel but at the same time provides fantastic insight into the early years (and success) of LTCM, the characters and how it all went wrong. If you only read one book on the subject, this should be it.
Rating:
Summary: Great insights, excellent read
Review: This is a fantastic book. Reads like a novel but at the same time provides fantastic insight into the early years (and success) of LTCM, the characters and how it all went wrong. If you only read one book on the subject, this should be it.
Rating:
Summary: Well written
Review: This is a well-written, informative and entertaining book. It begins well with doubt that the notion of Adam Smith's hand is scientific, presents a brief and interesting biography of Fischer Black, and generally takes up where Liar's Poker leaves off: with LOR's idea of portfolio insurance. The CBOT history is described, as well as Black's love of the CAPM and (one of) the economists' (wrong) notions of "equilibrium" along with Black's suspicion of the 'no arbitrage' argument. Exactly why he was suspicious is left out, but the firming of the no arbitrage idea in the Miller-Modgliani 'Theorem" is hinted at. The history of LTCM is first-rate. Among the more interesting parts is the connection with UBS and the investment in LTCM by the Bank of Italy. Also interesting: how LTCM went beyond 'sigma' and the lognormal distribution by considering local fat tails (which still ignore extreme large deviations). Also stressed is that liquidity was always assumed, an assumption that fails during very large deviations.Those who have taken the trouble to read Spengler's last chapters in The Decline of the West will enjoy Dunbar's description of the old Arrow-Debreu program, and the philosophically-related program by Merton and his students) to discover/create hidden options, the attempt to capitalize everything everywhere. There are some claims that are irritating. Feynman's idea of the path integral is given credit for stimulating LOR's transition from continouous time Brownian motion to summing over discrete branches on a tree, whereas in reality the path integral applies directly to continuous paths in both quantum mechanics and (as Wiener showed earlier) continous time Brownian motion. In Brownian motion theory "drift" is confused with diffusion. Statistical independence is confused with randomness. Fama is cited as the originator of the ideology of the efficient market as the underpinning for Bachelier's theory (true), but Samuelson is given credit for applying the lognormal distribution in finance. The latter is completely wrong. Osborne (in complete ignorance of Bachlier, it seems) first used the lognormal distribution in finance. Newton is mentioned only as a foolish investor in the south Sea Bubble, which seems an unnecessary and ridiculous slap.
Rating:
Summary: One Of My Favorites
Review: This is a wonderful book. Not only is this book a detailed examination of the LTCM story, but as a bonus, it is a wonderful introduction to the instruments that were the tools of the LTCM economists. In a real sense, you cannot have an understanding of the seductiveness of the techniques or an inkling of how the trading/money machine worked and why it collapsed and why the collapse was so shocking to the quants without having the introduction. Insights into cleverness and inventiveness of the mechanisms are a real bonus -- after reading Dunbar you not only feel you have an understanding of the sorry saga, but also an useful badsic understanding of derivatives/swaps/arbitrage devices. Great stuff.
Rating:
Summary: One Of My Favorites
Review: This is a wonderful book. Not only is this book a detailed examination of the LTCM story, but as a bonus, it is a wonderful introduction to the instruments that were the tools of the LTCM economists. In a real sense, you cannot have an understanding of the seductiveness of the techniques or an inkling of how the trading/money machine worked and why it collapsed and why the collapse was so shocking to the quants without having the introduction. Insights into cleverness and inventiveness of the mechanisms are a real bonus -- after reading Dunbar you not only feel you have an understanding of the sorry saga, but also an useful badsic understanding of derivatives/swaps/arbitrage devices. Great stuff.
Rating:
Summary: Easily the best LTCM book I've read
Review: This is an extraordinarily well-written book. However, if you're not well-versed in quantitative finance, you're probably going to have a hard time following some parts of the book. Be that as it may, I doubt you'll find a more accurate and more informed book on the subject. For those looking for a more fictionalized, but highly readable, version of events, pick up "When Genius Failed."
Rating: 
Summary: Best History of Long Term Capital Management
Review: This is the book to read about the history of LTCM. Clearly organized and with an awareness of the intellectual currents that went into the whole phenomenon. Better than "When Genius Failed" although that book has some parts of the story in more detail. For those who want to understand the whys, Andrei Shleifer's "Inefficient Markets" shows why this type of disaster is inevitable -- however it is intended for an audience with much more tolerance of mathematics than Dunbar. I did not give this book 5 stars because of what is left out. Not so much Dunbar's fault -- much of the whole story has yet to emerge -- but frustrating nevertheless.
Rating:
Summary: Complacent Italian Convergence Trade profits go bye-bye...
Review: What a fantastic book. If you were trading during the fall of 1998, you simply must get it. Did you know that the Italian Central Bank helped Merriwether to make the 'Italian Convergence Trade' beginning in late '95 "happen"? (A necessary phase for the globalization/open society plan to continue) It was so painfully evident during the fall of '98 that someone was playing defense to keep a lid on the US Treasuries. When they finally had to let go, the Federal Reserve stepped up and saved their good friends that helped make European convergence a reality. Technically, the ftq rally in US Treasuries traded right up to the massive 1.62 fibonnacci projection like it should have. History will judge whether or not the sneak (they tried to tell you) rate cut was a policy error - but none can deny it kick-started the internet bubble leading to the acceptance of the 'New Era' thinking. (Just the beginning of an increasingly muddy future). When trading, it is important to check your ego at the door. Some bright people do things in order to make others think they are smart. How could LTCM have made such rookie mistakes? I wish I too had friends in high places.
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