Long-Term Capital Management was a hedge fund that focused on bond trading. It was chaired by preeminent Wall Street traders and Nobel Prize-winning economists. Established in 1993, it was wildly booming from 1994 until 1998. The fund almost disintegrated the global financial system in 1998 due to its highly leveraged trading strategies that failed to pan out. Eventually, LTCM had to be bailed out by a consortium of Wall Street banks in order to counteract systemic contagion.
LTCM was a highly-leveraged hedge fund before its 1998 collapse, forcing the U.S. government to intervene to prevent financial markets from collapsing.
LTCM's highly leveraged nature, coupled with a financial crisis in Russia, led the hedge fund to sustain massive losses and be in danger of defaulting on its own loans.