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Long-Term Capital blew up today

Long-Term Capital blew up today# Economics - 经济

q*i2098-09-23 07:09

1 楼

The renowned hedge fund (run by Mr. Merither - ex-Sally
head of its government bonds, + Merton and Scholes) Long
Term Capital is a subject of a NY Fed bail-out meeting today.
Highly leveraged at 40x, LTC suffered a 44% loss in August,
which prompted questions about its ability to meet
margin calls. With losses estimated at $80bn, it
finally went belly up today.

b*t2098-09-23 07:09

2 楼

Jim Cramer (the street.com boss) had an article explaining why
Long Term Capital is in trouble a few days ago. You can go to
Yahoo Finacial site to find The street.com .

【在 q**i 的大作中提到】

: The renowned hedge fund (run by Mr. Merither - ex-Sally
: head of its government bonds, + Merton and Scholes) Long
: Term Capital is a subject of a NY Fed bail-out meeting today.
: Highly leveraged at 40x, LTC suffered a 44% loss in August,
: which prompted questions about its ability to meet
: margin calls. With losses estimated at $80bn, it
: finally went belly up today.

b*b2098-09-23 07:09

3 楼

see the bailout?

【在 b***t 的大作中提到】

:
: Jim Cramer (the street.com boss) had an article explaining why
: Long Term Capital is in trouble a few days ago. You can go to
: Yahoo Finacial site to find The street.com .

q*i2098-09-23 07:09

4 楼

yeah. what a fiasco, :-)
HKMA can really learn from this. As I stated earlier, the
worst nightmare for a hedge funds is margin calls. With
their highly leveraged position, they have very little cash
on hand. and drawing against commiement to fund margin calls
is strongly resisted by investors (this happened to ltcm).
HKMA needs to create opportunities to force margin calls
onto the hedge funds. One such opportunity is settlement
dates.
talk about missed opportunities, :-)

【在 b*b 的大作中提到】

: see the bailout?

b*b2098-09-23 07:09

5 楼

sure, good point. But anything you impose on hedge funds will reduce
speculation as well as "smart investment", see how you want to put it.
Greenspan mentions a lot that new investment tool seems accelarates
financial turmoil and increase the fragility of financil market, I think
more inventions will come out.
Any idea about the followings: moral hazard, safe heaven, bailout(is it
fair to taxpayer? why should taxpayer subsidizes wall street?) back to
gold system and global currency.
some sites

【在 q**i 的大作中提到】

:
: yeah. what a fiasco, :-)
: HKMA can really learn from this. As I stated earlier, the
: worst nightmare for a hedge funds is margin calls. With
: their highly leveraged position, they have very little cash
: on hand. and drawing against commiement to fund margin calls
: is strongly resisted by investors (this happened to ltcm).
: HKMA needs to create opportunities to force margin calls
: onto the hedge funds. One such opportunity is settlement
: dates.

q*i2098-09-23 07:09

6 楼

I don't personally thinking changing the rule midst a play is good for the
mkt in general, and HK in particular. What the HKMA can do is to 1) leave
the mkt alone, or 2) intervene in a smart way in the open market, IFF they
have to intervene (again, I don't think they have to).
I am not sure if there is moral hazard in the LTCM case: the investors
(in LTCM) are not bailed out: their investment is marked to market as of
last Thursday, and the partners at LTCM were basically totally wiped out
(th

【在 b*b 的大作中提到】

:
: sure, good point. But anything you impose on hedge funds will reduce
: speculation as well as "smart investment", see how you want to put it.
: Greenspan mentions a lot that new investment tool seems accelarates
: financial turmoil and increase the fragility of financil market, I think
: more inventions will come out.
: Any idea about the followings: moral hazard, safe heaven, bailout(is it
: fair to taxpayer? why should taxpayer subsidizes wall street?) back to
: gold system and global currency.
: some sites