Long-Term Capital Management (LTCM)
Contents
Unraveling the Legacy of Long-Term Capital Management (LTCM)
Dive into the tumultuous rise and fall of Long-Term Capital Management (LTCM), a hedge fund that shook the financial world in the late 1990s. Explore its promising beginnings, catastrophic demise, and the unprecedented government bailout that followed.
Exploring LTCM: A Tale of Triumph and Tragedy
Discover the captivating story of LTCM, led by Nobel laureates and esteemed traders, which soared to prominence with its revolutionary arbitrage strategy. Delve into the intricacies of LTCM's business model and the factors that led to its eventual downfall.
Inside LTCM's Trading Strategies and Risk Management
Uncover the sophisticated trading strategies employed by LTCM, including convergence trades and interest rate swaps, as well as its risky leveraging practices. Learn how LTCM's vast holdings and high leverage amplified its losses during times of market turmoil.
The Russian Debt Crisis and LTCM's Downfall
Explore the pivotal role played by the Russian debt default of 1998 in LTCM's unraveling, as the hedge fund grappled with staggering losses and mounting pressure from creditors. Understand the systemic risks posed by LTCM's potential collapse and the government's intervention to avert a financial catastrophe.
LTCM's Bailout and Legacy
Learn about the unprecedented $3.65-billion bailout orchestrated by the U.S. government to rescue LTCM from the brink of collapse and prevent widespread financial contagion. Reflect on the lasting impact of LTCM's rise and fall on the hedge fund industry and financial regulation.