LTCM’s partners and traders including John Meriwether, David Mullins, Eric Rosenfeld, Gregory Hawkins, Larry Hilibrand, Victor Haghani, Myron Scholes, Robert C. Merton and the Wall Street banks form the crux of the story.

The first half of the book covers the rise including John Meriwether’s early days at Salomon, the genesis of trading strategy (J.F.Eckstein & Co.), the formation of the arbitrage group, the formation of LTCM, raising capital, first year in operation, first few years of success, the shift from bond trading to equities, Merton & Scholes winning the Nobel Memorial Prize, etc.

The second half delves into the beginning of the losses, the various crisis in the markets and their impact on LTCM’s trades, the attempt to raise additional capital, Warren Buffett’s offer to invest with Goldman Sachs & AIG, and finishes with the fourteen Wall street banks getting together at the Fed to take over the LTCM fund.

Eric Rosenfeld, one of the partners at LTCM, gave at MIT in February of 2009 analyzing their story, including the myths & misconceptions. (Thanks to Charles Krohn for recommending the video.)

Also, on Quora, What are the former employees of LTCM/JWM doing now?

If you liked this post, you might like my review of The Big Short by Michael Lewis.

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What’s interesting about the cast of characters is their contrarian view on the financial crisis, events that shaped their worldview, and holding on and increasing their bets while under tremendous pressure, in some cases, from their own investors.

Lewis focuses largely on four groups, and among them mostly on Steve Eisman, Dr. Michael Burry, Greg Lippmann and Charlie Ledley:
• Frontline Partners (Steve Eisman, Vincent Daniel, Danny Moses, Porter Collins), Ivy Zelman and Wing Chau
• Scion Capital (Michael Burry, Steve Druskin), Joel Greenblatt and Kip Oberting
• Formerly of Deutsche Bank (Greg Lippmann & Eugene Xu)
• Cornwall Capital (Charlie Ledley, Ben Hockett, Jamie Mai) and David Burt

The book starts with Eisman, moves on to Burry, Lippmann, Ledley and how they go about learning more about the Subprime market, various interactions with Wall St. Banks, AIG, how the protagonists put together the pieces of the puzzle, and finally culminates with Howie Huber losing billions and the financial crisis of 2008.

If you liked this post, you might like Daily Links #171 (Michael Burry edition).

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The name of the book refers to Coach Mike D’Antoni’s philosophy of scoring in the first 7 seconds of the 24 second shot clock. The 2005-06 season was significant for a few reasons:
- Amare Stoudemire was lost to injury for most of the season
- Steve Nash receives his 2nd (back-to-back) MVP after playing point-guard at a level similar to Magic, Cousy & Stockton
- Raja Bell clotheslining Kobe Bryant and getting suspended for an elimination game

The book starts off and devotes a good portion, almost half, to the first round playoff’s with the Lakers, where the Suns comes back from 3-1 down to win the series, segways to training camp and a few regular season games. After which, the book moves on to the series with the Clippers, goes back to the cameo appearance Amare makes for 3 games, and then covers the western conference finals against the Mavs. All along you get insights into the players, coaches, how teams prep for games, how they deal with losing and winning games, the chemistry and the interplay.

While insights into teams might be common today with the advent of twitter, videos and interviews done by the players in the locker room, this books covers the era before all that. Jack McCallum is a fantastic and engaging writer and Seven Seconds or Less: My Season on the Bench with the Runnin’ and Gunnin’

Phoenix Suns is a fast paced page turner which is well worth a read.

If you like this post, here are some videos from the 2009-10 season from the Suns showcasing their chemistry and why they advanced to the western conference finals.
- Nash covering JMZ in the locker room during the playoffs
- Steve Nash & Robin Lopez, balls talk
- Goran Dragic shuts down the Spurs with 26 points (23 in the 4th quarter) in 17 minutes. Check out the end of the video on how the bench, the owner (Sarver) and the GM (Kerr) feel about Goran’s play.

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The book goes into the architecture of such WSC’s, workloads & software infrastructure, hardware building blocks, datacenter basics, energy & power efficiency, costs, dealing with failures & repairs and the challenges in designing such machines.

Some interesting points from the book:
- programmers must be aware of the relatively scarce cluster-level bandwidth resources and try to exploit rack-level networking locality
- distribution of peak power usage – CPU’s 33%, DRAM 30%
- cost-efficiency metrics for a large SMP server and a low-end, PC-class server
- At the moment, the sweet spot for many large-scale services seems to be at the low-end range of server-class machines
- Energy management being a key issue. Focus on reducing all energy-related costs capital, operating expenses, and environmental impacts.
- The average real-world datacenter and the average server are far too inefficient, mostly because efficiency has historically been neglected and has taken a backseat relative to reliability, performance, and capital expenditures. As a result, the average WSC wastes two thirds or more of its energy
- As a rule of thumb, most large datacenters probably cost around $12–15/W to build and smaller ones cost more
- The total cost of a server will be primarily a function of the power it consumes, and the server’s purchase price will matter less. In other words, over the long term, the datacenter facility costs (which are proportional to power consumption) will become a larger and larger fraction of total cost

You can download the book here.

Todd Sattersten: Fixed to Flexible, 4 simple lessons about cost, price, margin & the options. (ebook)

80 legs: Rent a web crawler: crawl 2 billion pages/day for $2.00 per million pages crawled + $0.03/cpu/hr via @angusdav

BetterExplained Math ebook: Get the beta! I am a big fan of Kalid’s website, there are some excellent articles that are explained clearly, concisely and in a way you can remember.

GDC Austin: An Inside Look At The Universe Of Warcraft

Benjamin Joffe: Mobile From East to West

My familiarity with the folks being interviewed varied; some I knew well, some in passing and some I had never heard of — like Bernie Cosell & Dan Ingalls. All the interviews were great to read, some of them were absolutely fascinating!

The thing I liked about the book were how these legendary programmers went about learning their craft, what attracted them to the field, lessons they learnt and their thought process. Some parts of the book reminded me of Tracy Kidder’s The Soul Of A New Machine.

It was interesting to note the common things people agree on:
- Most folks don’t like C++, some really hate it!
- Many of them are not happy with the available programming languages
- The importance of reading good code
- Second System Syndrome

A note about the author: The questions are a good mix of general and specifics depending on the person. The fact that Peter had to speak to such a diverse field and ask great follow up questions says a lot about his interest and knowledge in this field.

I have been exchanging emails with Peter regarding interviewing the folks on his initial user-submitted list. In my opinion, there is an incredible amount of wisdom among the folks on that list, interviewing them and sharing those interviews would help the community at large as well as the craft of software development. If you have thoughts on interesting ways we can get that done, please add your comments.

Go ahead and buy the book. It’s a great read, well worth your time and money. There is an older book called Programmers at Work by Susan Lammers, some of those interviews are available on Susan’s blog.

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