A hedge fund run by two Nobel Prize economists needed a bailout within a year

Long-Term Capital Management used Nobel-winning option-pricing models to run huge, highly leveraged trades that looked almost riskless on paper. When Russia defaulted on its debt in 1998, markets moved together instead of offsetting, and the fund lost billions in weeks. Fearing the fallout would hit every bank it owed, the New York Fed organized a private bailout rather than let it collapse.

— Roger Lowenstein, When Genius Failed: The Rise and Fall of Long-Term Capital Management — book, 2000
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