Diary of a Very Bad Year: Confessions of an Anonymous Hedge Fund Manager

This book provides play by play commentary on the 2008 financial crisis as observed by a probably late thirties hedge fund manager.

The main new thing here is you get a perspective from a mid sized principal dealing with counter parties during the middle of a chaotic period. His experience is unlike the banks and govt officials who dealt primarily in negotiating and administering an unprecedented monetary and fiscal recovery program. No, this fellow is just trying to survive the crisis, figuring out which of his counter parties are bankrupt, which of his credits have stopped paying, what he can own, what he can sell, and which of his clients will ask for redemptions this week. It sounds unpleasant.

You also get to peer into the psychology of an finance type: competitive and wealthy at a time when those went from being socially desirable things to socially undesirable things.

The hedge fund manager (hfm) provides a unique opportunity to hear the unmodulated views of a point one percenter who did not yet realize he should hide his views.

He explains he mortgages much of his 20s and 30s to build wealth, not taking a vacation in ten years. He complains of burn out, getting into the office at five am, and leaving at seven, negotiating with tough counter parties and psychological stress.

The best part of the book: in two sentences he explains he’s retiring, has made enough money, doesn’t need to be Scrooge McDuck swimming in gold coins, and is moving to Austin Texas to avoid New York city’s high taxes!

Ten years later, there’s something impossibly distant about how hfm describes his life, his troubles, and what he is or isn’t entitled to as a contributing member of society. It’s not that people still don’t think like he does, most really wealthy people do in my experience. It’s that the casual, detached manner in which folks once felt comfortable expressing these views no longer exists.