LTCM Collapse
Impact
Fed emergency bailout of $3.6B
What happened
Long-Term Capital Management, a hedge fund run by two Nobel laureates and a former vice chair of the Fed, lost $4.6 billion in a few months on highly leveraged bets. Bloomberg terminals let every major trading desk see the deteriorating positions in near real time. The NY Fed organized a $3.6 billion private rescue consortium inside a week, because waiting longer would have risked cascading failures across the counterparty network.
Context
Bloomberg terminals spread LTCM exposure data across global trading desks simultaneously — what used to take days now happened in minutes.
Era
03 · Cable TV & Bloomberg Terminal
CNBC launched 1989. Bloomberg terminals hit floors in 1982. Financial commentators could move markets in real-time. The era of the unchecked prediction began.
Read the full era →Also see across timelines
Other events in this era
← Earlier in era
Black Monday — First Televised Market Crash
Later in era →
Soros breaks the pound