Being so self-absorbed, the arbitrageurs naturally assumed that the banks were obsessed with Greenwich, too. But the simple fact is that by mid-September, the Wall Street banks were not principally worried about Long-Term Capital—they were worried about themselves. Given that every bank had many of the same trades as Long-Term, exiting from their positions was a matter of self-preservation. Goldman in particular was steeped in losing trades and, with its stock offering just weeks away, was desperate to cut its losses.
