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Publisher
A CFR Book. Penguin Press
Release Date
June 2010
Price
$29.95
496 pages
ISBN 978-1594202551
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Overview
Wealthy, powerful, and potentially dangerous, hedge-fund moguls have become the It Boys of twenty-first-century capitalism. Their weekend mansions are fodder for Vanity Fair photographers; their potential to cause chaos preoccupied authorities even before the recent financial cataclysm. Based on esteemed financial writer Sebastian Mallaby's unprecedented access to the industry, including three hundred hours of interviews and binders of internal documents, More Money Than God tells the inside story of hedge funds' origins in the 1960s and 1970s, their explosive battles with central banks in the 1980s and 1990s, and finally their role in the financial crisis of 2007-2009.
Hedge funds reward risk takers, so they tend to attract larger-than-life personalities. Jim Simons of Renaissance Technologies began life as a code-breaker and mathematician, co-authoring a paper on theoretical geometry that led to breakthroughs in string theory. Ken Griffin of Citadel started out trading convertible bonds from his dorm room at Harvard. Julian Robertson staffed his hedge fund with college athletes half his age, then he flew them to various retreats in the Rockies and raced them up the mountains. Paul Tudor Jones posed for a magazine photograph next to a killer shark and happily declared that a 1929-style crash would be "total rock-and-roll" for him. Michael Steinhardt was capable of reducing underlings to sobs. "All I want to do is kill myself," one said. "Can I watch?" Steinhardt responded.
Finance professors have long argued that beating the market is impossible, and yet drawing on insights from mathematics, economics, and psychology, hedge funds have cracked the market's mysteries and gone on to earn fortunes. Their innovation has transformed the world, spawning new markets in exotic financial instruments and rewriting the rules of capitalism.
More than just a history, More Money Than God is a window on tomorrow's financial system. Hedge funds have been left for dead after past financial panics: after the stock market rout of the early 1970s, after the bond market bloodbath of 1994, after the collapse of Long-Term Capital Management in 1998, and yet again after the dot-com crash in 2000. Each time, hedge funds have proved to be survivors, and it would be wrong to bet against them now. Banks such as Citigroup, brokers such as Bear Stearns and Lehman Brothers, home lenders such as Fannie Mae and Freddie Mac, insurers such as AIG, and money market funds run by giants such as Fidelity--all have failed or been bailed out. But the hedge fund industry has survived the test of 2007-2009 far better than its rivals. To a surprising and unrecognized degree, the future of finance lies in the history of hedge funds.
Recipient of the 2011 Gerald Loeb Prize
Finalist for the 2010 Financial Times/Goldman Sachs Business Book of the Year Award
"Mallaby's smart history of the hedge fund business explains how finance's richest moguls made their fortunes and argues that the oddballs of the hedge fund world are Wall Street's future, and possibly its salvation."
--New York Times, Paperback Row
"Superb."
--David Brooks, New York Times
"An enormously satisfying book: a gripping chronicle of the cutting edge of the financial markets and a fascinating perspective on what was going on in these shadowy institutions as the crash hit."
--Guardian
"Colorful reading."
--Slate
"[A] smart history of the hedge fund business . . . should be required reading this summer."
--New York Times Book Review
"Mallaby manages to dramatise even heavily raked-over incidents, such as Paul Jones's anticipation of the 1987 stock market crash, or George Soros's successful assault on the Bank of England in 1992. He gets into the minds of the traders . . . and adds extensive historical and academic context without interrupting the highly readable narrative."
--Financial Times
"A superbly researched history of hedge-fund heroes stretching back to the 1950s, [More Money Than God] is a fascinating tale of the contrarian and cerebral misfits who created successful, flexible businesses in an otherwise conventional financial world."
--Economist
"[Mallaby is] incisive, informative, and as good a financial writer as he is a storyteller."
--NPR
"Mallaby's book is informative and entertaining. Its accounts of multibillion-dollar transactions and extravagant lifestyles may even entice you to switch careers."
--Newsweek
". . . excellent book . . ."
--Economic Principles
"One of the definitive histories and descriptions of hedge funds."
--Seeking Alpha
"A great story . . . meticulously sourced . . . full of wonderful stories about this brave new world."
--Economic Principals
"Splendid . . . the definitive history of the hedge fund history."
--Independent
"Persuasive . . . an enticing and believable vision."
--Prospect
Read the Bloomberg review.
Read the Financial World review.
"Clever, engaging analysis . . . [an] admirable book."
--Irish Times
"Compelling . . . [Mallaby] brings a keen sense of financial theory to his subject and a vivid narrative style . . . [More Money Than God] is still the fullest account we have so far of a too-little-understood business that changed the shape of finance and no doubt will continue to do so."
--Wall Street Journal, Best Titles of 2010
"Packed with excellent information and great anecdotes . . . its clarity is an example to other financial authors."
--Irish Sunday Business Post
"Engrossing."
--Publishers Weekly
"A lively, provocative examination of a little-understood financial realm."
--Kirkus Reviews
"More Money than God shines a fascinating light on what is still the most obscure route to becoming a billionaire--the mysterious world of hedge funds. Sebastian Mallaby's rollicking tour of industry legends--famous and otherwise--tells the improbable story of A. W. Jones, the vagabond journalist-sociologist and daring anti-Nazi activist who, after the war, would create the first "hedged" investment fund. From there, we get rip-roaring profiles of investing titans from the full-throated gambler Michael Steinhardt to the bold émigré George Soros and the courtly stockpicker Julian Robertson to the ill-fated intellects of LTCM and the hedge fund stars of the present day. Even as Mallaby entertains he advances an unorthodox yet compelling brief: rich as they are, hedge funds are probably the best vehicles society has for assuming risk. Any who disagree will have to contend with the evidence of the recent Wall Street collapse. If one shudders at the prospect of concentrating risk inside giant banks whose chieftains wager other people's money and cavalierly call for taxpayer bailouts then, as Mallaby points out, hedge funds are a necessary antidote."
--Roger Lowenstein, author of The End of Wall Street
"Sebastian Mallaby takes us into the secretive world of hedge funds and the result is a wonderful story and an education in finance. The book is full of colorful characters playing high stakes' games. Throughout, with his customary intelligence, Mallaby helps us understand this important transformation of the financial industry."
--Fareed Zakaria, author of The Post-American World
"When Alfred Winslow Jones started the first hedge fund, he had no idea where it would lead. Sebastian Mallaby, who must be the keenest student of hedge funds anywhere, now does--and he shares it with you in this crackling good read."
--Dr. Alan S. Blinder, Gordon S. Rentschler memorial professor of economics and author of The Quiet Revolution: Central Banking Goes Modern
"A fascinating history. Mallaby combines vivid description of key personalities and episodes with thoughtful discussion of the sources of advantage for different investment styles in different periods of financial history. I enthusiastically recommend this book to colleagues and students in academia and asset management."
--John Y. Campbell, chairman of the Department of Economics, Harvard University, and partner, Arrowstreet Capital
Sebastian Mallaby is the Paul A. Volcker senior fellow in international economics at the Council on Foreign Relations and a Washington Post columnist. He spent thirteen years at the Economist magazine, covering international finance in London and serving as the bureau chief in southern Africa, Japan, and Washington. He spent eight years on the editorial board of the Washington Post, focusing on globalization and political economy. His previous books are The World's Banker (2004), which was named an Editor's Choice by the New York Times, and After Apartheid (1992), which was a New York Times Notable Book.
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