The Crisis of Crowding / Bloomberg (ePub)

A rare analytical look at the financial crisis using simple
analysis

The economic crisis that began in 2008 revealed the numerous
problems in our financial system, from the way mortgage loans were
produced to the way Wall Street banks leveraged themselves.
Curiously enough, however, most of the reasons for the banking
collapse are very similar to the reasons that Long-Term Capital
Management (LTCM), the largest hedge fund to date, collapsed in
1998. The Crisis of Crowding looks at LTCM in greater
detail, with new information, for a more accurate perspective,
examining how the subsequent hedge funds started by Meriwether and
former partners were destroyed again by the lapse of judgement in
allowing Lehman Brothers to fail.

Covering the lessons that were ignored during LTCM's collapse
but eventually connected to the financial crisis of 2008, the book
presents a series of lessons for hedge funds and financial markets,
including touching upon the circle of greed from homeowners to real
estate agents to politicians to Wall Street.

* Guides the reader through the real story of Long-Term Capital
Management with accurate descriptions, previously unpublished data,
and interviews

* Describes the lessons that hedge funds, as well as the market,
should have learned from LTCM's collapse

* Explores how the financial crisis and LTCM are a global
phenomena rooted in failures to account for risk in crowded spaces
with leverage

* Explains why quantitative finance is essential for every
financial institution from risk management to valuation modeling to
algorithmic trading

* Is filled with simple quantitative analysis about the financial
crisis, from the Quant Crisis of 2007 to the failure of Lehman
Brothers to the Flash Crash of 2010

A unique blend of storytelling and sound quantitative analysis,
The Crisis of Crowding is one of the first books to offer an
analytical look at the financial crisis rather than just an account
of what happened. Also included are a layman's guide to the
Dodd-Frank rules and what it means for the future, as well as an
evaluation of the Fed's reaction to the crisis, QE1, QE2, and
QE3.