Dream Team

Compared with the frenetic bullpens on Wall Street, what passes for a trading floor at Long Term Capital Management LP is decidedly serene. Sailboats glide gently by the floor-to-ceiling picture window overlooking Long Island Sound. Half a dozen traders in golf shirts and loafers sit at a sleek, semicircular trading desk equipped with computers and chairs for 14. Envision the trading rooms at Morgan Stanley or Goldman Sachs, crowded with bellowing young traders in Hermes ties. Then forget them. Here in Greenwich, Conn., conversation is held in civilized tones. Everyone is usually sitting down.

The frenzied activity that does take place at Long Term Capital is inside the minds of the men gathered around the firm's trading desk. Some of them were trained as economists. Others are experts in mathematics and computers. This group, which is being closely watched by Wall Street, pioneered the art of computer-assisted bond trading: the complex, highly intellectual marriage of math, finance theory, and market smarts. While others use intuition to try to outguess the Fed or react to the consumer price index, these guys use computer-generated models to predict tiny but enormously lucrative discrepancies in bond prices.