stocks and bonds will have to be sold
to cover the losses.
further depressing the value of these
instruments of collateralization...

 Banks and brokers are slowly revealing the extent of money they lent hedge funds after the near-demise of Long-Term Capital Management, a once high-flying hedge fund that lost huge sums through ill-timed bets in global bond and stock markets.

>Which word is operative? SLOWLY
The public would panic.
THIS IS WHAT PROMPTED ALL THE
"EMERGENCY MEETINGS" over the last
few days of all the biggies.
The bandages are soaking blood.

    Chase Manhattan Corp. was the first U.S. bank to reveal its outstanding loans to hedge funds, at $3.2 billion, and Bankers Trust Corp. said on Thursday hedge funds owed it a total of about $875 million.   Both Chase Manhattan and Bankers Trust are also part of a consortium of 14 leading financial companies coughing up money to keep Long-Term Capital afloat.

If this were a casino
they'd beat the shit out of you.

   Merrill said its exposure to all hedge funds other than Long-Term Capital was about $700 million and was broadly diversified. The company’s second-largest hedge fund exposure was less than 15 percent of its exposure to Long-Term Capital, it said, declining to name other funds.

Hey, a billion here, a billion there
pretty soon you're talking about real money...