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Comment by the_local_host | Hacker News Reader

Long Term Capital Management was bailed out.

https://en.wikipedia.org/wiki/Long-Term_Capital_Management

It wasn’t really bailed out. Equity investors lost all their money. Banks bought the assets at depressed valuations and made enormous profits. Kind of the opposite of a bailout in many ways.

LTCM wasn't bailed out, all the investors in it got screwed. Banks took 90% control of all of their assets, and the 10% that was left to the original capital managers was still far less than many of the debts accrued.

I suppose this really calls into question, what bail out means to you. If we label every private company transaction for a struggling company as a bail out, rather than the traditional one where only ones where the government steps in, then it's almost impossible for anything to not get bailed out.

By other banks. Not the taxpayer.

Still, ain't like the banks are going to bail out regular people for making some stupid investment.

I'm not sure of the actual point of this whole thread, but regular people make bad investments and get bailed out all the time: it's called bankruptcy.

Bankruptcy hurts more because no limited liability. And when the other bailouts are more like "refinancing" as the other reply points out, the institutional bailouts hurt even less.

They do all the time. Every mortgage refinance is a bailout by the same conception that you are using.

There are refinances but there is also good ol' foreclosure. How many rich financiers have actually "lost everything"?

Coperate limited liability + allowed to leverage more + your friendly competitors bail you out is a suspicious combo, even if each of those in isolation is totally fine.

Under supervision of the Fed.

https://en.wikipedia.org/wiki/Long-Term_Capital_Management

How about this?

> “This bailout is for the honest, hard-working hedge fund people who should be assured of making money,” said Biden today.

> “We spent trillions of taxpayer’s money to bail out giant financial institutions who finally had their irresponsible business practices come back to bite them, and it’s only fair we do the same in this latest crisis.”

> “So, it’s only fair that these hedge funds, who once again were more irresponsible with money be helped out by the taxpayer without repercussion.”

> Biden revealed that the trillion-dollar package is set to be rolled out in the coming weeks with no demands for greater regulation or change to business practices.

https://www.betootaadvocate.com/world-news/democrats-announc...

That article is what we in the biz call “satire”.

There was a great PBS Nova episode on that. Black-Scholes don't fail me know... until it did. No video but a link to the dvd purchase https://www.pbs.org/wgbh/nova/teachers/programs/2704_stockma...

the investors lost everything. it is like a margin account that goes from +$30k to -$30k. the bailout gets it to zero. investors still losse everything.

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