Though Wall Street recovered, Long-Term’s brand of arbitrage did not. Under its new owners, the fund enjoyed a good last quarter in 1998 and a good start to the new year; then it went into a tailspin. In the summer of 1999, U.S. swap spreads once again ballooned, to 112 points—wider, even, than at the astronomical height of the previous year’s panic. The once-in-a-century flood had struck twice in two years.
