Long Term Capital Management: stop loss

[Jordan Hayes]

This is the firm that Meriwether formed a few years ago
and attracted Merton & Scholes to; a classic hedge fund, they
did extremely well for a while.  This year they hit some snags,
getting caught on the other side of some of this big market moves.

I heard a rumor yesterday that they had hit their stop-loss (typically
if a fund loses 50% of their capital, they have to dissolve the
fund and give the rest back to investors) but wasn't able to
confirm it until this morning.  Bloomberg is now reporting that
LTCM is down 44% in August and 52% for the year.  They are
reportedly seeking new investment from their fund participants, but
my guess is this means they are down to $2.3B and will be out of business
soon.

In any case, it's a good answer to the question: where has all the
money gone?

Meriwether, the king of liar's poker, appears to have lost.

/jordan