It is dead quiet this morning (I am typing this before the open, and the ES is up 0.01%), so I thought I’d fill the space with a little something that occurred to me when I woke up.
Anyone here remember Long Term Capital Management? Yes, I see some hands in the back of the room. For those of you who aren’t, LTCM was a hedge fund in the mid 1990s which blew up. That in itself isn’t very interesting, but what makes the blowup distinct is that it was rescued by the federal government. Looking at the four years prior, one wouldn’t have seen this coming:(more…)