G'day all - dear Ramsey, I don't understand much about hedge fund either, so maybe we have a case of the blind talking to the blind about how good looking the girl sitting across the room <VBG>, but 1st LTCM is not a hedge fund in the normal use of the term. Here is the explanation from the Chairman himself about the FED coordination efforts...
cbs.marketwatch.com
Beyond LTCM, there are different kind of hedge funds, so we have to see them separately. For instance, QF has the tradition of betting big, winning big and losing big. I doubt there is a cry of argentina there. Remember, the FED has provided liquidities to the market after the 87 crash but did nothing for Drexel, so one has to infer things are done on a case by case basis.
Finally, back to LTCM, based on the article, it seems that the FED has deemed the disorderly unwinding of LTCM remaining positions can cause such a shockwave to the global markets analogous to the snowball going downhill out of control
best, Bosco |
