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Yeah, it's like a stampede in a crowded theater - once the panic sets in everyone's fleeing for the exit and telling everyone else to go too. You could call tha
by joefigura 4y ago
Yeah, it's like a stampede in a crowded theater - once the panic sets in everyone's fleeing for the exit and telling everyone else to go too. You could call that coordination, but it's more like once the panic starts it will carry itself out.
- 462436347 4y ago> Yeah, it's like a stampede in a crowded theater It was the same situation with LTCM, with their counterparties (large banks) rushing to liquidate before LTCM became insolvent, which the Fed feared would send shockwaves through the financial system. The banks quickly, collectively agreed to do the right, responsible thing and stopped the fire selling, and injected some emergency capital into LTCM, and then gradually unwound LTCM's postions (and made money in the process).