Is The Current Economic Situation Akin to The Crisis

…cause by the collapse of the “Long Term Capital Management” fund? (of a few years back?
As I recall, LTCM was a fund set up by 5 Nobel prize winning economists, which supposedly eliminated risk (and would always yield a positive return)!
According to what i read, every investment that the fund made, would be balanced by another investment, which would cancel out the risk:e.g: a Russian govt. bond (high yeld, high risk), would be balanced by a japanese govt. bond (low yield, low risk).
When the thing went sour, the US government had to bail the investors out-is what we are seeing a replay of what happened to LTCM?

More or less, but on a much larger scale, and with institutions that are more central to the financial system.

There’s a nice summary here: http://en.wikipedia.org/wiki/Long-Term_Capital_Management

I’m pretty sure that although the government was involved in organizing the LTCM bailout, there was no government (read taxpayer) money involved. So that is one difference.