FYI: September saw a spasm of retrospectives on the 10-year anniversary of the financial crisis. Lost in all of the hoopla was the 20-year anniversary of another collapse — that of hedge fund Long-Term Capital Management in September 1998. In many ways, that episode was a precursor to the next crisis.
This privately held investment firm believed — incorrectly, we later learned — that it had come up with a new and more profitable way to invest capital. And for a while, it did: Returns soared, with annualized gains after fees of 21, 43 and 41 percent in its first three years. The team had the appearance, according to journalist Roger Lowenstein, of being a “$100 billion money-making juggernaut.”
Regards,
Ted
https://www.bloomberg.com/view/articles/2018-10-10/we-forget-that-the-financial-crisis-had-a-trial-run
