Bookstaber A Demon of Our Own Design

Markets, Hedge Funds, and the Perils of Financial Innovation
1. Auflage 2011
ISBN: 978-1-118-04558-9
Verlag: John Wiley & Sons
Format: EPUB
Kopierschutz: Adobe DRM (»Systemvoraussetzungen)

E-Book, Englisch, 304 Seiten, E-Book

Inside markets, innovation, and risk
Why do markets keep crashing and why are financial crisesgreater than ever before? As the risk manager to some of theleading firms on Wall Street-from Morgan Stanley to Salomonand Citigroup-and a member of some of the world'slargest hedge funds, from Moore Capital to Ziff Brothers andFrontPoint Partners, Rick Bookstaber has seen the ghost inside themachine and vividly shows us a world that is even riskier than wethink. The very things done to make markets safer, have, in fact,created a world that is far more dangerous. From the 1987 crash toCitigroup closing the Salomon Arb unit, from staggering losses atUBS to the demise of Long-Term Capital Management, Bookstaber givesreaders a front row seat to the management decisions made by someof the most powerful financial figures in the world that led tocatastrophe, and describes the impact of his own activities onmarkets and market crashes. Much of the innovation of the last 30years has wreaked havoc on the markets and cost trillions ofdollars. A Demon of Our Own Design tells the story ofman's attempt to manage market risk and what it has wrought.In the process of showing what we have done, Bookstaber shines alight on what the future holds for a world where capital and powerhave moved from Wall Street institutions to elite and highlyleveraged hedge funds.

Autoren/Hrsg.

Bookstaber, Richard

Inhaltsverzeichnis

Preface ix
Acknowledgments xvii
About the Author xix
CHAPTER 1 ~ Introduction: The Paradox of Market Risk 1
CHAPTER 2 ~ The Demons of '87 7
CHAPTER 3 ~ A New Sheriff in Town 33
CHAPTER 4 ~ How Salomon Rolled the Dice and Lost 51
CHAPTER 5 ~ They Bought Salomon, Then They Killed It 77
CHAPTER 6 ~ Long-Term Capital Management Rides the Leverage Cycle to Hell 97
CHAPTER 7 ~ Colossus 125
CHAPTER 8 ~ Complexity, Tight Coupling, and Normal Accidents 143
CHAPTER 9 ~ The Brave New World of Hedge Funds 165
CHAPTER 10 ~ Cockroaches and Hedge Funds 207
CHAPTER 11 ~ Hedge Fund Existential 243
Conclusion: Built to Crash? 255
Notes 261
Index 273

Über Autor(innen)

Richard Bookstaber ran an equity hedge fund at FrontPoint Partners and was the director of risk management at Ziff Brothers Investments and at Moore Capital Management, one of the largest hedge funds in the world. He served as the managing director in charge of firm-wide risk management at Salomon Brothers and was a member of Salomon's powerful Risk Management Committee. Mr. Bookstaber also spent ten years at Morgan Stanley in quantitative research and as a proprietary trader, concluding his tenure there as Morgan Stanley's first market risk manager. He is the author of three books and scores of articles on finance topics ranging from options theory to risk management. Bookstaber received a PhD in economics from MIT. He now works at a hedge fund in Connecticut.