It wasn't that bad because it was presented to the market as a Fait accompli, all parties involved were already on board so no one had to worry about counterparty risk (which is what the big worry this time around is). If memory serves the notional value of LTCM's positions was about 1Trillion, the notional value of the the positions held by the bond insurers is something like 240T. LTCMs positions were fairly simple and the counterparties easy to identify and all trades were unwound within 6 months after the Fed brokered deal. This is not the case with the current crop of CDS' and CDO's, they are complex, with many different counterparties. Significant time will be needed to unwind the positions and there needs to be an orderly market that people have faith in in order to do it in, otherwise panic will ensue because no one will know what they are holding and what its value is (memory is not 100% so please correct me if I am wrong).