Thanks Mike. Gretchen M has now has an article at the NY Times Web site
September 24, 1998
Seeing a Fund as Too Big to Fail, New York Fed Assists Its Bailout
By GRETCHEN MORGENSON
<Picture: N>EW YORK -- The Federal Reserve Bank of New York has helped organize the rescue of a large and prominent speculative fund, indicating that regulators recognize that the failure of such a fund would damage already fragile world markets.
Under an agreement reached late yesterday, the fund, Long-Term Capital Management L.P. of Greenwich, Conn., received a cash infusion of more than $3.5 billion from a consortium of commercial banks and investment firms. The fund, whose founder is John Meriwether, a former vice chairman of Salomon Inc., and whose partners included two Nobel prize winners, is said to be have a portfolio worth $90 billion.
The deal came after representatives of 16 banks and brokerage houses met at the offices of the Federal Reserve Bank of New York in downtown Manhattan. It is extremely unusual for the Federal Reserve to get involved in the bailout of such a fund, known as a hedge fund, a virtually unregulated type of investment firm, which despite its name, speculates in high-risk trades in markets around the world.
........rest at nytimes.com
I found it interesting that this morning, the Drudge Report led with this story. Since it's a prime political view, IMO it's meaningful that they covered it -- even pushing Slick Willy into the background for a short while.
Kathleen |
