2. This story reminds me in some ways of the infamous London Whale trader at JP Morgan who, like LT, continued to pile more and more leverage into a massive margin short position on a credit spread between investment grade and LIBOR rates using CDS swaps. A number of hedge funds, ironically including a separate JPM trading desk, deduced what was going on and took the other side of the trade to drive prices up, liquidating JPM and forcing a $6+ billion loss.