>Speaking of bailouts (a' la angela) I have a question(s). What was the name
>of the hedge fund which was recently bailed out?
Long-Term Capital Management.
>I know Greenspan helped
>arrange the bailout -- but who did the bailing, was it the IMF or some combo
>of banks?
No doubt Greenspan gave the nod, but the process was masterminded by the New York Fed. They squeezed a consortium of investment banks to pool enough money to rescue the thing. At the time, the talk was of just liquidating it in an orderly way, but the hedge fund was up something like 11% since they took it over, and I think there was talk of looking for new investors.
>Wasn't this the hedge fund run by the two nobel prize winners of a
>year or two ago?
Two of the partners were Nobelists. Quoting from a piece on the LBO website <http://www.panix.com/~dhenwood/CrisisUpdate.html>:
"Partners include two Nobel laureates in economics, Robert Merton and Myron Scholes, as partners, as well as former Fed vice chair David Mullins. [Click <http://www.panix.com/~dhenwood/Merton.html> for Merton's amusing research interests; this used to be on his Harvard web site, but it was mysteriously removed.] Merton and Scholes are grand wizards of finance theory; their math made the world of derivatives possible, and earned them their 1997 Nobel <http://cnnfn.com/hotstories/economy/9710/14/nobel_intv/>."
The option pricing model is usually called Black-Scholes; Merton doesn't get any credit, poor guy. Black died before he could collect his share of the Nobel.
Doug