[PEN-L:2691] Re: Long Term Capital

[Doug Henwood <dhenwood@xxxxxxxxx>]

Peter Dorman wrote:

>I wonder if we could provoke Doug Henwood's reaction to the article on
>LTCM in last Sunday's New York Times Magazine.  It struck me as an
>apologetic: Michael Lewis went to Greenwich, listened to LTCM's side of
>the story, and wrote it up.  The only thing wrong with their models,
>they say, is that they didn't take account of the nasty, predatory
>behavior of their competitors.

Yeah, I thought it was very disappointing article; Lewis has never written
anything even half as good as Liar's Poker. It was also very un-Timesian to
report something as one-sided as Meriwether's claim that AIG was out to
destroy them without offering any outside confirmation. Not that it's
implausible; if you're a trader, and see someone you could get rich by
ruining, the temptation would almost be impossible to resist.

What good are their models if they don't take account of the predatory
habits of their competitors? It's like having developed a shark-resistant
diving suit that only works when the sharks don't bite.

Doug