### Comment:
In order for them to make a return, they needed to be leveraged 100x. They were shorting on-the-run treasuries and long off-the run treasuries, which earns a tiny return if not leveraged. When everyone ran to on-the-run treasuries in the flight to liquidity from Russia, LTCM got fucked. I believe several regulations were put in place after the Fed bailed them out. You can read more about it in the book “When Genius Failed.”

### REPLY:
&gt; In order for them to make a return they needed to be leveraged 100x 
  
 Ahh the good old it works 100% of the time the 99.999% of the time it isn't causing a recession strat. That's a good one because when the recession hits you just act like nobody could have seen it coming and get bailed out by the government.

### END.