Hedge Hogs: The Cowboy Traders Behind Wall Street’s Largest Hedge Fund Disaster

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)