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To: Tom who wrote (2377)	10/2/1998 6:18:00 PM
From: Terrapin	Read Replies (1) \| Respond to of 2951

Hi Tom, I've been lurking on the thread - very interesting discussion. I have a question/comment about the LTCM matter. The phrase "Fed bailout" does not seem to fit exactly what happened. From what I've read (and I'm sure there's more to it but I can only go by what I've come across) the fund fell below liquidity requirements (such as they are) and so sought a fresh infusion from the same institutions - private institutions - that had invested in them. In exchange, the institutions received substantial control of the fund. IMHO it seems more like the fund declared unofficial bankruptcy and gave itself up to the "bondholders". My point is that no tax dollars were used (is this correct?). As for the role that the Fed actually played it appeared to only be a mediator. So the phrase "Fed-brokered bailout" would be accurate despite the potential for confusion with "Fed bailout". The latter would be hypocritical to their wishes for foreign economies but the former would not. Having said all that I should also say that I am not defending the Fed, hedge funds, or the institutions that invest with them. I personally think that hedge funds are the closest things to criminal financial syndicates the world has seen in centuries and should face rigorous regulation. I am only trying to understand exactly what happened. Comments appreciated, John