Summary
In September 1998 the Federal Reserve organized a rescue of LTCM, a giant hedge fund near collapse. Economist Kevin Dowd argues the intervention was unnecessary and set a damaging precedent.
LTCM’s strategy was the opposite of trend following: many small gains, with the risk of one catastrophic loss.
Source
- Title
- Too Big to Fail? Long-Term Capital Management and the Federal Reserve
- Author
- Kevin Dowd
- Year
- 1999
- Published by
- Cato Institute Briefing Paper No. 52
- Length
- 12 pages
- File
- PDF · 65 KB