Saturday, January 20, 2007

Books on Financial Disasters

Big Bets Gone Bad: Derivatives and Bankruptcy in Orange County. How a supposedly consevertively managed fund can lose some 27% of its value, and eventually, bankrupted one of the richest county in the US in just several months when the interest rate environment turned against it.
Rogue Trader: How I Brought Down Barings Bank and Shook the Financial World The lack of risk management and a rogue trader on the loose brought down one of the most prestigious bank of England. The fact that Nick Leeson himself wrote this book makes it particularly intersting.
When Genius Failed: The Rise and Fall of Long-Term Capital Management There couldn't have been a better title. The LTCM story is probably the most dramatic story in financial world: managed by nobel prize winners, the gigantic fund's fall threated the entire financial system that the FED has to put togather a rescue package.
Inventing Money: The Story of Long-Term Capital Management and the Legends Behind It Another count of the LTCM story. This book focuses more on the quantitative side.