How Long Term Capital Rocked Stocks, Too

It wasn't just the bond market that LTCM endangered

It's widely believed that Long-Term Capital Management nearly collapsed because of huge bond trades. But that's only part of the story. Equally important were its gargantuan equity positions. What really shocked and alarmed Wall Street banks and brokerages was the havoc that an LTCM collapse would wreak in the stock market. "We were most concerned about the equity book," says Jon S. Corzine, chairman, Goldman, Sachs & Co., referring to LTCM's equity holdings.

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