Here's a new article on finance theory, "convergence arbitrage," and the problems that Russias devaluation of the rouble and partial default on its rouble-denominated debt in '98 caused for Long Term Capital Management:
http://www.lrb.co.uk/v22/n08/mack2208.htm
In it, the author writes, "As [LTCM's] difficulties grew, the Federal Reserve Bank feared the consequences for already nervous capital markets of a sudden forced liquidation of the funds large commitments, and therefore co-ordinated LTCMs $3.6 billion recapitalisation by a consortium of American and European banks."
I wonder what would have happened had Big Government not meddled with the markets' efficient workings. This sort of thing is bound to happen again, no?
Peter