John Meriwether, whose hedge fund Long-Term Capital Management (LTCM) came so spectacularly unstuck last month, is celebrated for an almost bizarre ability to remain calm in the face of huge risk. His quiet, intensely private demeanour has long belied an almost obsessive hunger for ever bigger positions. "If you feel good about the market," he would tell young traders at Salomon Brothers in the 1980s, "then get serious."
Meriwether's name reached a wide public in 1989 when the Salomon trader-turned-author Michael Lewis described his peculiar talent for liar's poker. The game, which involved betting on the serial numbers of dollar bills, was played in a circle most afternoons by the firm's traders. Meriwether was the acknowledged champion. In his book Liar's Poker Lewis tells the now somewhat poignant story of how one day in 1986 Gutfreund threw down a challenge: "One hand, one million dollars, no tears." (Until then the bets had been limited to hundreds of dollars.) "No John," replied Meriwether. "If we're going to play for those kinds of numbers, I'd rather play for real money. Ten million dollars. No tears." It was a bluff, but Gutfreund declined, saying: "You're crazy."
"No," writes Lewis in Liar's Poker, Meriwether simply thought he was "just very, very good".