More Money Than God: Hedge Funds and the Making of the New Elite

Wealthy, powerful, and potentially dangerous, hedge-find managers have

emerged as the stars of twenty-first century capitalism. Based on

unprecedented access to the industry, More Money Than God provides

the first authoritative history of hedge funds. This is the inside

story of their 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 2007-9.

Hedge funds reward risk takers, so

they tend to attract larger-than-life personalities. Jim Simons began

life as a code-breaker and mathematician, co-authoring a paper on

theoretical geometry that led to breakthroughs in string theory. Ken

Griffin started out trading convertible bonds from his Harvard dorm

room. Paul Tudor Jones 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. 

A saga of riches and

rich egos, this is also a history of discovery. Drawing on insights from

mathematics, economics and psychology to crack the mysteries of the

market, hedge funds have transformed the world, spawning new markets in

exotic financial instruments and rewriting the rules of capitalism. And

while major banks, brokers, home lenders, insurers and money market

funds failed or were bailed out during the crisis of 2007-9, the

hedge-fund industry survived the test, proving that money can be

successfully managed without taxpayer safety nets. Anybody pondering

fixes to the financial system could usefully start here: the future of

finance lies in the history of hedge funds.