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This history of Long-Term Capital Management is unauthorized. At the project's outset, I was granted several formal interviews with two of the firm's partners, Eric Rosenfeld and David Mullins, but such formal cooperation quickly ceased. Subsequent attempts to resume the interviews, and to gain formal access to John W. Meriwether, the founder, and others of the partners, proved fruitless. Nonetheless, over the course of my research, I repeatedly conveyed (via e-mail and telephone) seemingly endless lists of questions to Rosenfeld, and he generously consented to answer many of my queries. In addition, various Long-Term employees at all levels of the firm privately aided me in my research, helping me to understand both the inner workings of the firm and the nuances of many of the individual partners; I am deeply grateful to them.
My other primary sources were interviews conducted at the major Wall Street investment banks, including the six banks that played a crucial role in the genesis and ultimate rescue of Long-Term. Without the cooperation of many people at Bear Stearns, Goldman Sachs, J. P. Morgan, Merrill Lynch, Salomon Smith Barney, and Union Bank of Switzerland, this book could not have been written.
I also had generous tutors in economics. There were others, but Peter Bernstein, Eugene Fama, John Gilster, Bruce Jacobs, Christopher May, and Mark Rubinstein helped me to understand the world of options, hedging, bell curves, and fat tails where Long-Term plied its trade.
In addition, the confidential memorandum on the fund's debacle prepared by Long-Term's partners in January 1999 provided facts and figures on the fund's capital, asset totals, leverage, and monthly returns throughout the life of the fund, as well as information on the results of investors. It was an invaluable resource and, indeed, the source of many of the figures in this book. Finally, I am grateful to the Federal Reserve Bank of New York for its free-spirited cooperation.
Whenever possible, sources are indicated by an endnote. However, in many cases, I had to rely on sources that declined to be identified. Writing recent history is always a touchy business, and the Long-Term story—essentially, one of failure and disappointment—was particularly delicate. Long-Term's partners are by nature private people who would have been uncomfortable with such a project during the best of times; that they were unenthusiastic about a history of such a titanic failure is only human. Therefore, I must ask the reader's indulgence for the much material that is unattributed.
I am deeply grateful to Viken Berberian, a research aide who proved to be not only an intrepid gatherer of facts but a resourceful and insightful assistant. Neil Barsky, Jeffrey Tannenbaum, and Louis Lowenstein—two dear friends and a nonpareil dad—tirelessly read this manuscript in crude form and provided me with invaluable and much-needed suggestions; their inspired handiwork graces every page. Melanie Jackson, my agent, and Ann Godoff, my editor, as unerring a team as Montana-to-Rice, skillfully shepherded this project from conception to finish. Their repeated shows of confidence lightened many otherwise solitary hours. And my three children, Matt, Zack, and Alli, were a continuing inspiration. Many others helped the author, both professionally and personally, during the course of writing this book, and my gratitude to them knows no bounds.
