![]() Aladdin enabled BlackRock investment teams to understand what they had bought. BlackRock’s funds held up well and had minimal loss compared to the overall market. In this volatile environment, the risk analytics built as Aladdin revealed its value. Fixed-income portfolios blew up amid rising interest rates and shrinking bond prices. Goldstein joined BlackRock as an analyst in 1994, which was dubbed the Great Bond Massacre year, as the Fed began raising interest rates more than the markets expected. ![]() It wasn’t his fault he didn’t control the back office.” ![]() In a single quarter, his department lost $100 million. Larry had made his calculations based on the wrong numbers. We find the explanation deep in one of the most recommended books in the industry, What It Takes, by Stephen Schwarzman : “But a guy from the back office who ran Larry’s computer models had made a mistake, and the hedges were wrong. His back office, the nervous system of any operation, made a catastrophic error. He was one of the brightest, tso how did he make such a fatal mistake, leaving his position uncovered? It turned out that it wasn’t his mistake. He had joined First Boston as a graduate trainee, and his talent and abilities propelled him forward, and he was expected to make CEO. Fink lost the firm $100 million, and in the process he lost his job, too. The story goes that in 1986 Larry Fink, the shooting star in the mortgage department at First Boston, put a trade in expecting the interest rates to rise.
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