What should have been a gripping story, however, has been poorly handled by Lowenstein, who obscures his narrative with masses of data and overwritten prose. As he itemizes the complex mix of investments and heavy borrowing that made 1994-1997 profitable years, Lowenstein also charts the subtle drift toward riskier (and ultimately disastrous) ventures as the fund's traditional profit centers dried up. Lowenstein argues that this kind of success served to enhance the fund's golden legend and sent the partners' self-confidence off the charts. By the end of 1995, it had tripled its equity capital and total assets had grown to $102 billion. Written by an American journalist Roger Lowenstein, When Genius Failed arrived at my doorstep last August during the lockdown period. Armed with the cachet of its founders' stellar credentials (Robert Merton and Myron Scholes, 1997 Nobel Prize laureates in economics, were among the partners), it quickly parlayed expertise at reading computer models of financial markets and seemingly limitless access to financing into stunning results. Long-Term Capital Management opened for business in February 1994 with $1.25 billion in funds. The long answer, which Lowenstein (Buffett) provides in undigested detail, may panic those who shudder at the thought of bouncing a $200 check. The short answer is that the banks feared that the fund's collapse could destabilize the entire stock market. No sooner was the $3.6-billion plan announced than questions arose about why usually independent banks would band together to save a single privately held fund. In late September 1998, the New York Federal Reserve Bank invited a number of major Wall Street investment banks to enter a consortium to fund the multibillion-dollar bailout of a troubled hedge fund.

When genius failed review