Soufrière Hills Soufrière Hills The Soufrière Hills volcano is an active, complex stratovolcano with many lava domes forming its summit, on the Caribbean island of Montserrat. Many volcanoes in the Caribbean are named Soufrière (French: "sulphur outlet"). These include La Soufrière or Soufrière Saint Vincent on the island of Saint Vincent and La Grande Soufrière on Guadeloupe. After a long period of dormancy, the Soufrière Hills volcano became active in 1995, and has continued to erupt ever since. Its eruptions have rendered more than half of Montserrat uninhabitable, destroying the capital city, Plymouth, and causing widespread evacuations: about two thirds of the
Long-Term Capital Management invested in other derivatives such as equity options. Under prevailing US tax laws, there was a different treatment of long-term capital gains, which were taxed at 20.0 percent, and income, which was taxed at 39.6 percent. The earnings for partners in a hedge fund was taxed at the higher rate applying to income, and LTCM applied its financial engineering expertise to legally transform income into capital gains. It did so by engaging in a transaction with UBS (Union Bank of Switzerland) that would defer foreign interest income for seven years, thereby being able to earn the more favourable capital gains