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Trillion Dollar Bet
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Program Overview
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In 1973, three brilliant economists, Fischer Black, Myron Scholes,
and Robert Merton, discovered a mathematical Holy Grail that
revolutionized modern finance. The elegant formula they unleashed
upon the world was sparse and deceptively simple, yet it led to the
creation of a multi-trillion dollar industry. Their bold ideas
earned Scholes and Merton a Nobel Prize (Black died before the prize
was awarded) and attracted the elite of Wall Street.
In 1993, Scholes and Merton joined forces with John Meriweather, the
legendary bond trader of Salomon Brothers. With 13 other partners,
they launched a new hedge fund, Long Term Capital Management, which
promised to use mathematical models to make investors tremendous
amounts of money. Their money machines reaped fantastic profits,
until their theories collided with reality, and sent the company
spiraling out of control. The crisis threatened to bring markets
around the world to the brink of collapse.
Join NOVA in the quest to turn finance into a science. Plus, trace
the little-known history of predicting financial markets and go to
work with some successful modern traders who rely on intuition as
well as mathematical models.
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