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To: John Hunt who wrote (16528)	9/27/1998 7:58:00 AM
From: John Hunt	Respond to of 18056

The Gambler Loses nypostonline.com << One of the biggest surprises in this blow-up is that no one knew what Long-Term Capital was holding. While hedge funds by nature are secretive, many keep investors informed about positions in the portfolio or changes in strategy. Yet Long-Term Capital had a policy of not divulging its positions or strategies, even to investors. Their philosophy was, "We don't want to explain it to you, just trust us and give us your money,' said Michael Lewis, who now writes for Bloomberg newswire and the New York Times magazine. Creditors weren't treated any differently. >>

To: John Hunt who wrote (16528)	9/27/1998 8:14:00 AM
From: John Hunt	Read Replies (1) \| Respond to of 18056

What Went Wrong? Fund's Big Bettors Learned That Risk Trumps Math, History washingtonpost.com << In this latest version of the story, Meriwether's firm mastered the art of the esoteric trade. It feasted on disparities between the current prices being quoted for bonds, stocks, currencies and other securities and their historical values. His investment vehicle, known as a hedge fund, also sought to profit from anomalies in prices among different segments of financial markets around the globe. One source of profits: taking advantage of differences in yields on government bonds issued by various European countries. Those differences were supposed to get smaller as the common European monetary system grew closer. Another common technique was to sell bonds such as 30-year Treasuries -- which have such a huge market that they are easy to dump in bulk without affecting prices very much -- and buy shorter-term, less-liquid bonds and wait until their values came closer together. A source close to Long-Term Capital said that about 90 percent of the fund's balance sheet was made up of government securities issued by members of the Group of Seven industrialized nations. >> More on the reasons for the bond fund debacle.