In each of these cases, LTCM took the other side—effectively trading against people who were buying or selling because institutional requirements compelled them to do so. By being the flexible player with the freedom to mirror the quirks of the inflexible ones, Long-Term provided liquidity to the markets. French insurers and American banks fulfilled their institutional imperative at a better price than they would otherwise have done. Meanwhile LTCM itself reaped fabulous profits.
