Journalist Mallaby (The World's Banker) gives unusually lucid explanations
of hedge funds and their balancing of long and short positions with complex
derivatives, but what really entrances him is their freedom from regulation,
high leverage, and outsized performance incentives. In his telling, they
empower a heroic breed of fund managers whose inspired stock picking,
currency trading, and futures contracting outsmart the efficient market.
In engrossing accounts of epic trades like George Soros's 1993 shorting of
the pound sterling and John Paulson's shorting of subprime mortgages, the
author celebrates hedge titans' charisma, contrarianism, and market insights.
Mallaby contends that hedge funds benefit the economy by correcting market
anomalies; because they put managers' money on the line and are small enough
to fail, they are more prudent and less disruptive than heavily regulated
banks. Mallaby's enthusiasm for an old-school capitalism of unfettered risk
taking isn't always persuasive, but he does offer a penetrating look into
a shadowy corner of high finance

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