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To: Moominoid who wrote (148270)	2/4/2002 10:51:07 AM
From: oldirtybastard	Respond to of 436258

LTCM assumed liquidity and an orderly market in thinly traded exotic instruments. The math guys were naive and the traders were cowboys, they forgot that other people in capital markets are there to try to f*ck you, not gawk at your foolproof wondrous math.

To: Moominoid who wrote (148270)	2/4/2002 11:19:28 AM
From: KeepItSimple	Read Replies (3) \| Respond to of 436258

LTCM collapsed for ONE reason, and ONE reason alone. The russians were paying out 20-30% interest rates on government bonds, and for a short while they had TONS of money flowing into their coffers. But eventually, enough people started cashing out that the whole fucking pyramid collapsed. Russia was essentially selling below-junk-bonds but everybody was buying them because they didn't believe Russia would ever default. Well, they did. THAT is what brought down LTCM. Nothing else. -------------------------------- LTCM were looking at spreads between yields on different securities from what I understand which should be mean reverting....