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> Long Term Capital Management, a highly leveraged hedge fund whose directors included the two Nobelists, collapsed and had to be bailed out to the tune of $3.6
by dmh2000 18y ago
> Long Term Capital Management, a highly leveraged hedge fund whose directors included the two Nobelists, collapsed and had to be bailed out to the tune of $3.65 billion by a group of banks.
$3.65 billion? that seems rather quaint these days.
- Rod 18y agoIndeed. In retrospect, it's somewhat ironic that the group of banks that bailed out LTCM included Merrill Lynch, Lehman Brothers, and AIG. The "bailers" became the "bailees".
- sachinag 18y agoYou know who didn't bail out LTCM? Bear Stearns - the first to fall. They wouldn't play ball and it's widely assumed that the other banks saw a chance to make them pay.
- falsestprophet 18y agoMaybe. But the banks have a relentlessly resourceful profit motive. More likely, the regulators were more keen to hang them out to dry for not cooperating with LTCM. Also, Bear Stearns always was a much smaller and weaker institution. Maybe they simply couldn't afford the risk then and now.