| Synopsis: |
When you hear the term hedge fund, Long-Term Capital Management LP probably comes to mind. In the summer of 1998, as the Asian financial crisis spread and Russia defaulted on its debt, Greenwich, Conn.-based LTCM saw more than US$4 billion vanish in a matter of weeks. Carrying leverage of 100 times its assets, the fund made, among other missteps, some very bad bets on Russian bonds. And its imminent collapse sent an icy chill up the spine of an already weakened global financial system. To prevent further collateral damage to major American banks, the US Federal Reserve stepped in and organized a US$3.6-billion bailout |
