3 ms·

That’s fine but I think it’s disingenuous to pretend there are no losers here. When schemes like archegos blow up, it often costs a lot of people who don’t eve

That’s fine but I think it’s disingenuous to pretend there are no losers here. When schemes like archegos blow up, it often costs a lot of people who don’t even know they have invested in stocks (e.g their pension fund does) some of their life savings.

dragontamer 5y ago
> When schemes like Archegos blow up Archegos isn't a "scheme". Its a private hedge fund for Bill Hwang's family. I mean, it really sucks for him and his family to lose $20,000,000,000 in a couple of days. But... this dude was playing with fire. And yeah, sucks for Credit Susie who was left "holding the bag" on Archegos's margin calls (all other banks liquidated ahead of time and got out safely. Credit Susie was slow on the uptake and was left with a $5 Billion bill). But guess what? Lending $Billions to reckless billionaires sometimes causes your bank to lose money. That's well within the risk-reward calculus. And a "big wall street bank" losing single-digit $Billions on a bet happens at least a few times each year: its not even that rare of an incident. This is literally the business they're in. (Indeed: banks like Credit Susie lend money somewhat recklessly because they know they can afford the loss if the bet goes sideways. I doubt anyone at Credit Susie is going to even get fired over this incident, its really not that big a deal.) Honestly, this implosion is great entertainment because everything happened correctly. The damage is almost entirely isolated to Bill Hwang and his closest associates (family members, and some unfortunate church-members who got roped in). But it seems like Bill Hwang was a relatively honest fellow: so he didn't really screw anyone else over aside from himself. Pretty much everyone in this story got "what they deserved". They played with fire, and then they got burned. This isn't a 2007 or 2008 situation where the fire spread and hurt someone else: this disaster is almost entirely "contained" to only the circle of reckless players.

dragontamer 5y ago

> When schemes like Archegos blow up Archegos isn't a "scheme". Its a private hedge fund for Bill Hwang's family. I mean, it really sucks for him and his family to lose $20,000,000,000 in a couple of days. But... this dude was playing with fire. And yeah, sucks for Credit Susie who was left "holding the bag" on Archegos's margin calls (all other banks liquidated ahead of time and got out safely. Credit Susie was slow on the uptake and was left with a $5 Billion bill). But guess what? Lending $Billions to reckless billionaires sometimes causes your bank to lose money. That's well within the risk-reward calculus. And a "big wall street bank" losing single-digit $Billions on a bet happens at least a few times each year: its not even that rare of an incident. This is literally the business they're in. (Indeed: banks like Credit Susie lend money somewhat recklessly because they know they can afford the loss if the bet goes sideways. I doubt anyone at Credit Susie is going to even get fired over this incident, its really not that big a deal.) Honestly, this implosion is great entertainment because everything happened correctly. The damage is almost entirely isolated to Bill Hwang and his closest associates (family members, and some unfortunate church-members who got roped in). But it seems like Bill Hwang was a relatively honest fellow: so he didn't really screw anyone else over aside from himself. Pretty much everyone in this story got "what they deserved". They played with fire, and then they got burned. This isn't a 2007 or 2008 situation where the fire spread and hurt someone else: this disaster is almost entirely "contained" to only the circle of reckless players.