claudetta
Apprentice
Joined: 24 Nov 2004
Posts: 1
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 Posted: 06/09/08 - 21:11 Post subject: |
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| Hello. It was in 1998. Long-Term Capital Management started like a firm with a strategy of taking highly supplement positions. LTCM was a very large hedge fund that nearly collapsed in late 1998. They had $126 billion just in assets. The problems started when Russia decided to declare that its currency started to decline. Everything moved beyond the regular range that LTCM had counted on. As a result, the U.S. stock market dropped 20%, while European markets fell 35%. Investor wanted shelter in treasury bonds, causing interest rates to move by over a full point. After that, LTCM’s investments started to collapse. In just few months, they lost half of the value of its capital investments. They had large number of clients, banks and pension funds and they all were on the edge of bankruptcy. |
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