Thanks to the EconProf for remarking about LTCM

http://en.wikipedia.org/wiki/LTCM

..and its connection to:

http://online.wsj.com/article/SB123000810251629677.html

I was obviously aware of the LTCM story, but not aware of how John Meriwether had later set up a hedge fund (to mimic LTCM strategies only with “less leverage”) and how that fund is also now in serious trouble.

If that story alone isn’t sufficient grounds for greater regulation of hedge funds, I don’t know what is!