Three quarters of all hedge funds lost money in August, and long term did the worst of any of them. In one dreadful month, Meriwether's gang lost $1.9 billion, or 45 percent of its capital, leaving it with only $2.28 billion. The Soros opportunity was gone-hopelessly gone. And longterm's portfolio still was dangerously bloated. The fund had $125 billion in assets 98 percent of its prior total and an extraordinary fifty-five times its now-shrunken equity in addition to the massive leverage in its derivative bets, such as equity volatility and swap spreads. This leverage was simply untenable. If its assets continued to fall, its losses would eat through that $2.28 billion sliver of equity in an eye blink. Yet that leverage could not be reduced not given the size of the trades and the utter loss of liquidity