In 1994, a group of remarkable intellectuals and market veterans, led by John Merriwether, created Long Term Capital Management. LTCM was formed mostly from the Salomon Brother’s bond arbitrage department that Merriwether had run until 1991, when a Treasury bond scandal forced his resignation. Merriwether, who was highly publicized in Michael Lewis’s Liar's Poker, quickly gathered his loyalists at Saloman to create LTCM. He transformed it into the “smart money” on the street, spurring typical client relations with Long Term’s banks. Long Term charged heavy fees on the money it managed: It took 25% of the fund's yearly gains, along with 2% of total assets. Despite this, the fund averaged spectacular returns in its first three years; A dollar in the fund in 1994 was worth more than $4 in 1998. In 1997, Long Term Partner’s Myron Scholes and Robert Merton would win the Nobel Prize, cementing the firm's reputation of genius. LTCM’s strategy was using highly leveraged convergence trades to profit at seemingly no inherent risk. The firm had some of the most advanced analytical risk management ever. With thousands of separate trades, Long Terms mathematicians predicted that an existential threat to the firm would only occur roughly once in the lifetime of the universe, deemed a statistical impossibility. Only 4 years after its creation, LTCM had imploded, nearly destroying the financial system.