Long Term Capital Management Collapses
US National debt $5,526,193,008,897.
Interest on debt $363,823,722,920.
Long Term Capital Management (LTCM), a New York based gold derivatives/futures trading operation, collapses. The Federal Reserve Bank of new York organizes a US$3.625 billion (thousand million) bailout out LTCM.
Senator Richard Lugar (R-Ind.) holds a hearing as Chairman of the Senate Agriculture committee to encorage Born to back away from trying to regulate derivatives
"It is unusual for three agencies of the executive branch to propose legislation that would restrict the activities of a fourth." - Richard G. Lugar
Representative Jim Leach (R-Iowa) Chairman House Banking Committee tries to mediate the intense conflict between the CFTC and the combined FED and Treasury Department by brining Born, Rubin and Greenspan to his committee for a meeting.
"I have never in my life been in a setting where three senior members of the U.S. government reflected more tension. Secretary Rubin and Chairman Greenspan were in concert in expressing frustration with the CFTC leadership... [Born] felt, I'm confident, outnumbered with the two against one." Representative Jim Leach (R-Iowa) Chairman House Banking Committee
Greenspan, Rubin and Levitt call on Congress to prevent Born from taking action to regulate derivatives until more senior regulators developed their own recommendations. Ms. Borns recommendations to regulate derivatives are successfully crushed by Greenspan and Rubin.
US National debt $5,656,270,901,615.
Interest on debt $353,511,471,722.