entity · derived
Ltcm
Derived node: assembled mechanically from the claims carrying ltcm. A roster, not an adjudicated definition.
Every claim under this term
- 1428387-015 : Post-1998 hedge fund regulatory proposals were misdirected because LTCM was unique among its peers in leverage, position size, and market-making ability, so the proposals mostly addressed LTCM as a si
- 1428387-016 : The regulatory proposals that appeared soon after LTCM did not adequately take valuation problems into account.
- 2714974-005 : The collapse of Long Term Capital Management in 1998 and its Federal Reserve orchestrated bailout made hedge fund risk to international markets apparent, and concerns over excessive leverage combined
- 2748096-007 : Post-LTCM counterparty credit risk management, in which regulators pressed banks to monitor and limit the leverage of their hedge fund clients, appears to have worked: the Amaranth failure produced no
- 2748096-008 : Market events like the LTCM failure can escalate into global financial crises when many highly leveraged hedge funds holding illiquid portfolios are obligors of a small number of major financial insti
- 2998097-003 : Because banks and brokers had let LTCM borrow the full value of its collateral, LTCM's 4.8 billion dollars in capital dissipated quickly once banks began making margin calls.
- 2998097-004 : Banks overexposed themselves to private investment fund lending, which allowed LTCM and similar funds to grow significantly and led banks as counterparties to put their own existence at risk.
- 3405660-006 : LTCM was diversified across markets but not across strategy, so its positions failed together; market level diversification does not imply strategy level diversification.
- 3405660-007 : Conventional risk models understated LTCM's losses because the models were estimated during more stable periods and therefore did not describe behavior under stress.
- 3405660-008 : The same leverage that produced LTCM's high returns magnified its losses, so leverage is a symmetric amplifier rather than a one directional source of performance.
- 3405660-009 : Before its collapse LTCM held roughly $4.8 billion in capital while controlling $160 billion in stocks and bonds, with derivatives of a notional value of $1 trillion.
- 3405660-011 : LTCM reached systemically dangerous size because banks lent to it without regard to repayment capacity, and in doing so the banks endangered their own existence.
- 3405660-028 : Basel II was at least partly motivated by the LTCM rescue and the 1998 market turbulence, so it responds to the same concerns that animate hedge fund regulation.