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

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


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

  1. The Esperanza Compromise By Jason Daniel Baker | March 30, 2021 at 11:26 AM | Reply

    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.

  2. Hedge fund manager is like vultures.

  3. And of course the right wingers will be calling for less regulations

    • Especially when it hits them in their pockets

    • @Liz Pedano it only hits our pockets never theirs

    • TheRadiantDehd | March 30, 2021 at 1:08 PM | Reply

      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.

    • @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

    • They are NEVER TO BLAME! its BLM and the communists.

  4. Its time for the Feds to start indicting some of the Wall Street Criminals ( The Swamp)

    • Daniel Hawthorn | March 30, 2021 at 1:41 PM | Reply

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

    • natasha begley | March 30, 2021 at 2:47 PM | Reply

      @Liz Pedano Hunter Biden the frail old git

    • Alternative Headlines | March 30, 2021 at 3:33 PM | Reply

      Role of the Feds is to protect the establishment. Not to bring it down.

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

    • S. Lee Mccauley | March 30, 2021 at 7:43 PM | Reply

      @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.

  5. I am from Cambodia, Thanks for your news #CNN

  6. Raja Yosafat Irianto | March 30, 2021 at 11:37 AM | Reply

    Thanks for your sharing.

  7. Michael Ulbricht | March 30, 2021 at 11:48 AM | Reply

    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!

  8. Everytime a billionaire loses their money and angel gets its wings.
    Abolish all hedge funds

    • Karmic Johnson | March 30, 2021 at 3:00 PM | Reply


    • Severed Yakhead | March 30, 2021 at 8:19 PM | Reply

      Your an idiot. This was a family office it was all his own money.

    • TheRadiantDehd | March 30, 2021 at 9:33 PM | Reply

      @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.

    • TheRadiantDehd | March 30, 2021 at 9:33 PM | Reply

      @Severed Yakhead *You’re*

    • @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”.

  9. Bill did it again.. My stocks went from pretty green to bloody Monday!!

  10. spiritual vitality TV | March 30, 2021 at 12:38 PM | Reply

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  11. Zachary Collins | March 30, 2021 at 12:43 PM | Reply

    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

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

    • Severed Yakhead | March 30, 2021 at 8:18 PM | Reply

      This was a family office you fool.

    • @Severed Yakhead so?

    • TheRadiantDehd | March 30, 2021 at 9:35 PM | Reply

      @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.

    • Magical Frijoles | March 30, 2021 at 10:57 PM | Reply

      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.

  12. 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!

  13. Another 2008 is all the world needs right now.

  14. Godsbackhand7 | March 30, 2021 at 12:59 PM | Reply

    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.

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

  16. Don’t panic! Only the little guys lost money.

  17. If I ran a hedge fund, I would name it Sonic. Sonic the Hedge Fund. 😀

    • Deborah Freedman | March 30, 2021 at 5:33 PM | Reply

      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.

    • You would take a position in GOLD RINGS I’m assuming?

  18. 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.

  19. The last farewell | March 30, 2021 at 6:42 PM | Reply

    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.

  20. Our elected officials have allowed Wall Street greed to become a house of cards.

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