The LTCM fiasco is full of lessons about:

1. Model risk

2. Unexpected correlation or the breakdown of historical correlations

3. The need for stress-testing

4. The value of disclosure and transparency

5. The danger of over-generous extension of trading credit

6. The woes of investing in star quality

7. And investing too little in game theory.

The latter because LTCM's partners were playing a game up to hilt.