WSJ Revisits LTCM: When Brilliance, Leverage, and Flawed Models Collide

A WSJ review (Aug. 4, 2026) revisits Long-Term Capital Management's 1998 collapse. The fund — staffed by Nobel laureates — foundered when Value-at-Risk models, built on historical data, missed simultaneous correlated losses. The same pattern recurred in 2008's structured-credit crisis. The open question: have risk models truly improved, or merely been re-trusted?