A little-known hedge fund caused widespread chaos on Wall Street 1

A little-known hedge fund caused widespread chaos on Wall Street

 

The names of the key players are different, but the lessons similar. The spectacular implosion of hedge fund Archegos Capital Management, much like the GameStop saga earlier this year, serves as a reminder of the dangers posed by extreme leverage, secret derivatives and rock-bottom interest rates.
ViacomCBS (VIACA), Discovery (DISCA) and other media titans' stocks crashed Friday as Wall Street banks that lent to Archegos forced the firm to unwind its bets. The epic firesale wiped out more than half of Viacom's value last week alone.
Major banks face billions of dollars in losses from their exposure to Archegos. Both Credit Suisse (CS) and Nomura tumbled Monday after warning of significant hits to their earnings.
The most startling part about the tale of Archegos is that it is a firm that few people had ever heard of before this weekend. And yet in this era of easy money, Archegos was able to borrow so much that its failure created shockwaves large enough to ripple across Wall Street — and impact everyday Americans' retirement accounts.

#FirstMove #CNNBusiness #News

46 comments

  1. Archegos Capital Management defaulted on margin calls from global investment banks Credit Suisse, Nomura Holdings, Goldman Sachs and Morgan Stanley. Archegos CEO Bill Hwang got nailed for insider trading but somehow made a comeback.

    1. @
      The Esperanza Compromise By Jason Daniel Bake exactly , i was amazed by comeback , hope you staying safe ?

    1. Yet, in theory the regulations are what lets them do this. If the Government didn’t have regulations that allows them to be bailed out of poor investments with tax payer’s money, they wouldn’t be nearly as bold on shorting plays. If we slice the connection between the Government and the Hedge Funds, they’ll rather die off naturally, or they’ll have to play by the rules.

    2. @TheRadiantDehd I disagree I’m from Canada and when the financial crisis hit all the banks in the U.S. and around we were one of the only countries that didn’t feel the effects of the crisis. None of our banks are allowed to offer sub prime mortgages our stock market is also heavily regulated so the wealthy can’t misuse it like the U.S.. less or no regulations is what the wealthy and republicans want than they can steal legally

    1. @President Tater Skin Awwww, you poor MAGA KKKultist. Did you move on from Benghazi and BUT HER EMAILS?

    2. @Alternative Headlines This. They protect the two party dichotomy just as they protect our corrupt economies.

    3. @President Tater Skin I don’t know anything about Hunter but, he is not placing so many in danger for their 401’s etc. And we have not had to spend billions bailing him.out the DOJ and AG can worry about Hunter.
      We need to press for stiffer laws as the free market keeps threatening to cost huge amounts with not even a smidgen of benefit.
      And not by executive orders that will just get undone by some future president.

  2. It’s time to crack down on people and places on Wall Street who skirt the rules. If nobody’s punished, then their behavior will just get worse!

    1. @Tsubadai Khan I don’t even care how much money they have. Shorting stocks is risky and arguably immoral. The government makes it so they take on no risk. They should have to at the very least take on all the risk, IF shorting should even be allowed.

    2. @TheRadiantDehd I know right. Why does nobody talk about how wallstreet got bailed out 3 fkn times before anybody in from either party was like “oh.. maybe we should help out the plebeians. Y’know maybe get our nurses and doctors better protection then fkn garbage bags”.

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  4. Hedge funds are free to commit chaos, but when a group of people on Reddit decide to buy some stock, Congress needs to investigate and try and shut down individual investors. #EatTheRich

    1. @TheRadiantDehd nahh all the rich anyone who makes over 500,000 a year’s head is on the chopping block

    2. @Jake S Eh, we can agree to disagree so long as the corrupt establishment elites are the first to go. We can argue about the rest afterwards.

    3. You really think a group of middle class dudes caused the Gamestop surge? Listening to people who don’t trade, talk about trading, is painful. The middle class people you are imagining don’t know how to buy a share in Gamestop much less have a brokerage account.

  5. Use other people’s money as collateral to borrow millions from a bank. Then use that borrowed money as collateral to borrow hundreds of millions from another bank. Use those hundreds of millions to borrow billions from other banks. Then bet it all on five stocks. Epic!

  6. Reddit/GameStop debacle? She says this as if letting those firms basically drive a company into the dirt and then riding the wave down is somehow “better” for anyone.

  7. “still being tallied up, but the feeling is its contained.” Literally contradicted yourself in the first few seconds lolol

    1. You know it’s rather interesting how the SHH gene got its name. Scientists were calling any gene, that had a mutation that caused a cell to be spiky, a hedgehog gene. Then they looked to see if that gene were important. They went through all the names of real hedgehogs, and none were really that essential. They had run out of natural names when they found another hedgehog gene, so the called it Sonic, the Sonic HedgeHog gene, or SHH. Its gene product turned out to be a vital signal in embryonic growth and development.

  8. So in 2012 he paid a fine of $44 million for Insider Trading and yet they let him trade again. It seems that so-called ‘white collar’ crimes do pay well and hey, NO BIG JAIL time. The justice system in the US is totally wrong.

  9. They’re pronouncing this fund like Are-keg-ohs, but I look at it and see Arch Egos, which probably more accurately describes the founders of this sweatshop.

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