Margin of Pain
AI-generated editorial still life of a single ornamental boxwood hedge trimmed into a dome shape, with a dented watering can at its base pouring gold coins into the roots, the front-right corner already browning where the coin stream runs dry.

Lead note / Latest

The Hedge That Needed Cash

UK defined benefit pension funds did not collapse because the gilt market moved. They collapsed because the hedge they used to match their liabilities required cash faster than the funds could raise it. That is a different kind of failure, and a more uncomfortable one.

LDI Jun 27 Status: latest
Jun 24 / File

Long-Term Capital Management and the Trade That Was Too Smart to Question

Three Nobel prizes, a Wall Street legend, and a balance sheet that did not survive the week the spreads stopped converging.

Jun 02 / Amaranth

Amaranth and the Trade That Got Too Big

A natural gas calendar spread is one of the cleanest trades in commodities. By September 2006, Amaranth's version of it was a large share of an exchange contract's open interest. That is not a position. That is a financing problem wearing a position's clothes.

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