Long-Term Capital Management

Long-Term Capital Management was a hedge fund founded in 1994 by a team of financial experts, including Nobel Prize-winning economists. The company was known for using complex mathematical models to identify and capitalize on arbitrage opportunities in global markets. They focused mainly on fixed-income trading and had some of the largest positions in the market. However, in 1998, the company experienced massive losses following the Russian debt default, causing a financial crisis that had a ripple effect throughout the global financial sector. The company eventually collapsed and had to be bailed out by a group of major banks. The incident served as a cautionary tale for the fragility of financial markets and the risks of excessive leverage in investment strategies.