Tug-of-War Summary and Analysis

"By the spring of 1996, Long-Term had an astounding $140 billion in assets, thirty times its underlying capital. Though still unknown to 99 percent of Americans, Long-Term was two and a half times as big as Fidelity Magellan, the largest mutual fund, and four times the size of the next largest hedge fund. Meriwether, Hilibrand, Haghani, and company now controlled more assets than Lehman Brothers and Morgan Stanley and were within shouting distance of Salomon. Though they had only a couple dozen traders, their fund - barely two years old - was bigger than some of Wall Street's age-old institutions" (Chap. 5, p. 80).

Even though there were some reporting requirements that applied to the hedge fund, they were as stringent as with other traded items. This meant that not much was known about Long-Term. It was almost impossible to determine the assets of the fund...