Word: funded
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Dates: during 1990-1999
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...indications that Long Term Capital had off-balance sheet derivative contracts with a value of more than $1 trillion. Derivatives are financial instruments that bet on the future direction of interest rates, stock indexes or currencies. Defaults representing less than 1% of that whopping sum could have sunk the fund and punished banks and investment firms around the world...
...Long Term Capital suddenly lose money after years of winning? Short answer: the fund's investing formulas were blindsided by the financial meltdown that has spread so rapidly from Asia to Russia and Latin America. In essence, Meriwether's computers were programmed with historical relationships among various global bond yields and other financial instruments. They looked for discrepancies in those relationships and bet that they would return to their historical norms. But the deepening global crisis caused a flight to the safety of U.S. Treasury bonds, which drove up prices that Meriwether's computers said should be falling. The resulting...
...Sept. 2 letter to investors, Meriwether called for patience and said the fund was "seeking to raise additional capital." Among those reportedly approached was George Soros, head of the $10 billion Quantum hedge fund, who spurned a request for a $500 million cash infusion. It was also rumored that billionaire investor Warren Buffett might help...
...With the fund collapsing, a Who's Who of Wall Street bankers and brokers feverishly huddled for two days on the 10th floor of the Federal Reserve Bank of New York City last week to draw up a rescue package. Among the princes present: Merrill Lynch chairman David Komansky, Travelers Group chairman Sanford Weill, and Goldman Sachs senior partner Jon Corzine...
...banks and investment firms had little choice but to put up the money. Bert Ely, president of a financial consulting firm that bears his name, observes that the lenders "want to avoid a fire sale" of fund assets...