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To: loantech who wrote (29387)	5/5/2005 10:27:26 AM
From: SeaViewer	Read Replies (1) \| Respond to of 116555

No, the LTCM guys are Myron Scholes and Robert Merton.

To: loantech who wrote (29387)	5/5/2005 8:28:56 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 116555

LTCM (Long-Term Capital Management) failed because they ignored the 1962 Fleming-Mundell model, still valid today, which states that countries wishing to interlink their economies in world trade cannot simultaneously achieve: 1.) stable exchange rates; 2.) autonomy of domestic economic policy and; 3.) free global capital flows. Had Robert Mundell been associated with LTCM he could have easily pointed out that LTCM's investment strategy would fail, as it did, because it assumed the Fleming-Mundell model was not relevant to their Foreign Exchange trades. *Since Mundell's work explains why LTCM failed, a search engine like Google will bring 416 websites which contain both Mundell and LTCM.* LTCM was a case of smart guys assuming they are just as smart and educated outside of their field as within their area of expertise. .