Megalomaniacal traders trash the market while battling for supremacy in this lively financial melodrama. Journalist and former financial analyst Dreyfuss smartly deploys her inside knowledge of Wall Street in following Brian Hunter, an energy trader for Amaranth LLC whose colossal bets on natural gas futures all but bankrupted the firm in 2006 and took down many a retiree’s pension in the process. She makes his duel with rival supertrader John Arnold a choreography of canny (and possibly illegal) market manipulations in which he eventually outsmarted himself: the gas contracts he bought were so huge that they moved the market upward—and they were also too big to sell without causing a self-defeating market plunge that might wreck his firm. Dreyfuss’s lucid, perceptive tour of the high-wire culture of hedge funds highlights just how vapid Wall Street’s pretense of market expertise and risk analysis really is; Hunter’s natural gas trades are really just bets on future weather, wagers that a hurricane or cold snap will crimp production or boost consumption enough to raise prices. Less cowboys than arrogant yet insipid hollow men—Hunter’s inane “hahaha” e-mail tag line is his most flamboyant trait—Dreyfuss’s subjects lose sight of reality in a financial hall of mirrors. Agent: Deborah Grosvenor, Deborah Grosvenor Agency. (June 11)
“Regulators, legislators and judges inclined to sympathize with the industry ought to rush out and buy a copy of Barbara Dreyfuss’s Hedge Hogs, a wonderfully instructive tale about Amaranth Advisors. . . . Dreyfuss, a Wall Street analyst turned investigative journalist, not only plowed through what turned out to be a treasure trove of official records and transcripts, but supplemented it with plenty of her own reporting. She manages to organize it all into a tight, riveting and understandable yarn.”—The Washington Post
“If you are an avid follower of Wall Street, you’ll read [Hedge Hogs] in one sitting. . . . Dreyfuss is able to strategically select the essential elements that make for an accurate and fast-paced read laced with illuminating Wall Street lore while sparing the lay reader useless financial jargon. This riveting book gives us much to think about.”—Wall Street on Parade
“Clearly and entertainingly told . . . a salutary example of how traders who believe they are super-smart might be nothing more than lucky, and how there is nothing so intoxicating as the ability to speculate with other people’s money.”—The Economist
“[Barbara T. Dreyfuss] does a great job of putting Amaranth’s out-of-control trader into historical context, explaining the blitz of deregulation that set the stage for someone like [Brian] Hunter to do maximum damage.”—Bloomberg
“A telling insider’s story on how hedge funds are playing high-stakes poker for massive personal profits and stealing the American Dream from average families . . . This is a case study that cries out for tougher crackdowns on the derivatives game.”—Hedrick Smith, author of Who Stole the American Dream?
“Brian Hunter, dubbed one of the top rogue traders of all time by The Wall Street Journal, is the only one on the list not to have gone to prison for his crimes. In Hedge Hogs, Barbara Dreyfuss reveals in forensic detail how Hunter carried out a speculative assault on the highly vulnerable U.S. energy market. Hedge Hogs is a great read for those interested in an introduction to the games often played by energy traders, as well as Wall Street veterans who think they know everything there is to know on this subject.”—Leah McGrath Goodman, author of The Asylum: Inside the Rise and Ruin of the Global Oil Market
“Hedge Hogs is not merely the definitive take on the largest hedge fund collapse in history—it is a window into how the financial system came unstuck. Barbara Dreyfuss gets all the details right. This is Enron II, the sequel in which a thirty-year-old farm-boy from Calgary makes $113 million one year and then destroys his firm—and yet he isn’t even the highest-paid or most intriguing character his age. Once you start reading this book, you will not be able to put it down.”—Frank Partnoy, author of F.I.A.S.C.O. and Infectious Greed
“Dreyfuss smartly deploys her inside knowledge. . . . [Her] lucid, perceptive tour of the high-wire culture of hedge funds highlights how vapid Wall Street’s pretense of market expertise and risk analysis really is.”—Publishers Weekly
“A well-crafted investigation.”—Kirkus Reviews
“[Dreyfuss’s] work shines light on the little-known sector of unregulated energy trading in the wake of Enron.”—Booklist
Named One of the Top 10 Business & Economics Books of the Season by Publishers Weekly
A Wall Street insider–turned–investigative journalist explains the collapse of the high-risk hedge fund Amaranth LLC and how it affected small businesses, pension funds and the price of natural gas across North America. After working two decades on Wall Street, Dreyfuss quit in 2004, alarmed at the emphasis on obscene profits for hedge fund traders, whose greed had begun infecting managers at supposedly more conservative, safe mutual funds. As the author searched for the best way to expose the hedge fund industry, she became increasingly aware of Amaranth, which, in 2006, went from billions of dollars of assets to corporate death nearly overnight. Dreyfuss' research into the collapse suggested to her that she could tell the complicated saga for a lay readership by focusing on two men: Brian Hunter, the Amaranth trader whose risky deals in natural gas trading caused the collapse, and rival John Arnold, at a different firm and viewing the natural gas market in an entirely different way from Hunter. The result is a story about not only greed, but also hubris, the lack of government regulation over many aspects of Wall Street, the high-consequence ignorance of investors seduced by astronomic-seeming hedge fund profits, and the apparent failure of the sad lessons to stick. Hunter refused to cooperate with the author; Arnold cooperated in a limited manner. Nonetheless, Dreyfuss managed to locate telling details for the narrative by relying on post-collapse hearings in the Senate, as well as two federal regulatory agencies entering the fray too late to prevent the painful losses. The author also persuaded numerous friends and foes of Hunter and Arnold to talk in detail about what they saw and heard in the months and years leading up to the collapse. A well-crafted investigation for nonspecialists about an obscure, needlessly arcane corner of Wall Street.