#Archegos #Nomura #
Yahoo Finance’s Julie Hyman and Steve Sosnick, Interactive Brokers chief market strategist, joins Yahoo Finance to discuss the market impact of Archegos defaulting on margin calls.
Hedge fund blowup sends shockwaves through Wall Street and the City
Oscar Williams-Grut·Senior City Correspondent, Yahoo Finance UK
A little known hedge fund that blew up last week has sent shockwaves through the world of investment banking.
Shares in Credit Suisse (CSGN.SW) and Nomura (8604.T) sunk over 10% on Monday after both warned they faced potentially billions in losses linked to hedge fund Archegos Capital.
Banks that worked with Archegos and lent it money to buy shares were scrambling to offload Archegos’ investments after a handful of risky bets made by the hedge fund went bad. The rush to exit these positions hit public shares prices, leaving banks with huge losses.
Hedge funds typically borrow money from banks to invest, a process known as margin trading. This allows funds to leverage up the cash they hold and increase their positions — potentially earning far greater returns if their bets come good. However, it also means hedge funds can theoretically lose more money than they hold in client funds.
If trades made on margin turn sour, banks will ask a client to put up more money as collateral to limit potential losses. This process is known as a margin call.
Archegos faced margin calls on its positions last week but failed to provide extra cash. As a result, banks began selling off stocks held on the hedge fund’s behalf — a fire sale known in the City as liquidating positions. The business press reported on Friday that Goldman Sachs (GS) and Morgan Stanley (MS) were selling huge chunks of shares in businesses including ViacomCBS (VIAC), Discovery (DISCA) and Chinese stocks Baidu (BIDU) and Tencent Music (TME). The block sales are estimated to be worth around $20bn (£14.5bn), according to the Financial Times.
“Things started going wrong for Archegos when shares of companies such as Viacom started to slide mid-last week,” said Michael Brown, a senior market analyst at Caxton Business. “It was at that point that margins were called, and couldn’t be provided, hence the block sales seen Friday.”
For more on this article please visit:
https://uk.finance.yahoo.com/news/archegos-capital-credit-suisse-nomura-goldman-sachs-morgan-stanley-092127768.html
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Hedge funds SUCK at investing.
..but they’re dam good at raking in management fees
@Alex Jay YUP
The paltry psychology coronally irritate because drum jointly reach given a nebulous stinger. testy, melted facilities
ehm … what ?
@nyhammer1 It’s a bot. There are many now on Youtube as Youtube has no category for reporting bots.
Modern hedge funds should hire younger individuals who have a better systemic risk management and management skills.
Some Retails are far better then PIs
Most hedge funds are just cash grabs. They make their money with management fees and don’t aim for performance fees…thus 1 out of 3 hedgefunds go bust within a couple yrs and they already made enough to retire
@Alex Jay family office is what they go for after retiring
It’s the best and brightest that’s doing this crap when they find out how the markets really work behind the scenes. That’s why it’s always one or two people responsible for situations like these.
hedge funds just bang pots and pans up or down
Haa pots and pants. 🔥 comment.
Viacom raised funds, gme did not.
The little guy needs a colonoscopy to open a regular trading account. But Goldman borrows billions to a ‘family account’?
Goldman wants to milk fees from the rich…the poor have none to take
basically, as a retired financial advisor (not high net worth clients, just medium range)…. it boils down to this. Ultra high net worth individuals are never satisfied. So they employ “sophisticated” hedge funds and immense leverage to increase their fortunes. But hedge funds charge high fees for success and do they do any better than other types of investments? What I have studied is the answer is “not consistently”. So basically Greedy Folks getting slaughtered would not concern me at all unless there is a broader market fallout.
Agree. Stocks, bonds, funds, commodities and, derivatives are all “a gamble”. Some with more risk than others so “buyer beware…”
Like Cramer says “Bulls make money, Bears make money and hogs get slaughtered.”….
If the ultra rich want their money in private equity funds, they are well aware of the risks and rewards
Flat tax rate for all upper class earners including securities..problem solved. White collar crime is a big problem in the modern World.
Even then, a broader market fallout is a buying opportunity for the younger generations. Being loaded up with student loans, mortgages where the house is 10x your salary, and inflated stocks is not a good recipe for retirement.
Steve Sosnick sound a lot like he just got done watching the same Patrick Boyle videos we just did…
I don’t blame him, Patrick Boyle is awesome
Cascading Failures Start Here. This is the end of the World Financial System. Amen.
Who knows yet. Maybe in 6 months we’ll look back at this as the beginning of the shitstorm we’ll be in, but maybe this really is nothing but a firesale opportunity for the sharks and a spectacle for everyone else. If more firms go down soon we’ll know something is up.
No way, Papa Fed will save all the rich.
Much though the thought would hearten many, just imagine what would potentially be rebuilt after the collapse?
The same system, only more concentrated in the hands of the biggest players who hold valuable resources and/or the means to process them.
If your hedge falls that used to be a good thing
They obviously aren’t smart!
Biden should come out and say the Feds will not be allowed to cover these private gambling bets. Also people need to start going to prison and have all their assets seized to pay the margin calls.
I agree with the latter statement but not with the first one. As sad as it is, the Fed stepping in to save the markets is necessary as long as your last points aren’t implemented. Those assholes need to go to jail and this stuff needs to be regulated first.
But if the Fed doesn’t step in in extreme situations (such as 2008) the outcome would be much, much worse.
@B20C0 This is way to low scale to warrant Fed involvement.
@B20C0 These are private bets held buy people who can afford to lose money otherwise they shouldn’t be betting, especially with the house. When the feds step in that does two things: #1. Stops the loses from being a true capitalistic market, #2. Insures the market that the American tax payer will shoulder the losses rather than allow them to become the new homeless people on American streets. Who’s going to grow up with these type of outcomes.
Out of his basement ? C’mon man
knowin biden tho, hes the epitome of the swamp and the elites
Hard to believe that a hedge fund, with its cash, front-running and market manipulation can fail… it’s almost like Trump bankrupting his casinos…. Seriously.. How does the house lose? Derp! 😉
A more detailed explanation of the dubious hedge fund activities would be appreciated.
It’s basically gambling away a loan that you have no hopes of repaying, isn’t it?
And using loopholes to avoid reporting to authorities that you’re actually making massive bets.
Yahoo finance has been stepping their game up
I read about Alex James when first started watching educational videos on bitcoin. I contac ted him in weeks he helped me grow my small portfolio of Bitcoin from 0.08 to 0.3 btc. Bitcoin heading for 70k got me smiling
In few years or so, people will definitely be kicking themselves in regrets for missing the opportunity to buy and invest in cryptocurency, it’s making ways
@Luke Satruk We’re invested buddy 😁
SCAM WARNING. SCAM ALERT.
SCAMMER!
SCAM ALERT!
When Hedge funds are YOLO trading what can possibly go wrong
Makes my option day trading seem responsible.
Mark my words ,Intrest rates must rise defaults will be massive .This house of cards will fall get ready.
You say it long enough it’ll eventually happen
FED: money printer goes brrrrrrrrrrrrrrr
Brokers: Shut up and take my money
Hedge funds: Yes.
😱..😭😭😭😭..🤡🤡🤡gamblers will alwaysl lose.✌😁
Big gamble, big loss. No bailouts, or no lesson learned.
‘Very strange Block trades’ lol It’s all such a mystery! lol How was this allowed to happen… lol
No way!… Swap agreements all across Wall Street… No Way! … lol It’s not like there is software that can track data and numbers… It’s all magic!
Gosh he didn’t listen to the rules and just made these deals. And we all know that software can’t track any of this because its so complicated to write such software…lol
A 12 year old could write software to track this…. lol We all know that none of this matters… fresh money gets minted and everyone involved is made whole… oh but WallstreeBets sub-Reddit humans acting on publicly available data need to be regulated for sure!
People will be kicking themselves in few weeks if they miss the opportunity to buy and invest in cryptocurrency
Investing in cryptocurrency is one of the best chance of making money 💸
Stocks are good crypto is better
I wanted to trade Crypto but got confused by the fluctuation in price
The quixotic myanmar unsurprisingly squeal because afghanistan repressingly deceive into a staking daniel. splendid, oval passbook
I still wonder how i would have been coping without the professional broker Mrs Stephanie i got introduced to by my employer some weeks ago while the pandemic was still new to the people of USA 🇺🇸 first i was scared but now am testifying for others.
I have heard a lot about Mrs Stephanie and how good she is, please how safe are the profits ?
@Shira Penelope I have also been trading with her, her profits are secured and over a 100 percent return on investments👌
Please how can I be able to reach out to your broker, my income streams is a mess.
Online trading is the future of greatness, so let’s try and win again
@Jerry Michael You can easily reach to Mrs Stephanie over her WhatsApp, I’ll leave the number below this comment.
This is just the tip of the iceberg of whale fund blowups.. these greedy guys have leveraged themselves to the Ultra Max…I only trade intra day because I don’t ever want to wake up in the morning to find my portfolio crushed because of Greedy over leveraged cowboys recklessly gambling. The unravel will be something and I’ll trade the price action.
Tip of he iceberg
OMG! Banks lost some currency they created out of thin air. Quick bail them out by creating some more.
His eyes 👀 he’s just reading a teleprompter, don’t belive anything he’s saying 🙄
Big banks blindsided once again. It’s AIG all over again.
When the market started to crash in 2008 and wall street set stopgap rules to allow the market to run its natural course it became corrupt as any lottery game today.v WHY anyone would involve with either of there is beyond me. It’s set, corrupt. And only the corps. can play they control it. Our world global market would best be if all could participate in a level playing field where rules apply for all. Makes Sense. Wall Street Stock Market Is Not That Old. +/-100yrs. Get rid of it!
Crypto Currency haha what a joke, it’s digital dear. Nothing tangible here. Don’t be stupid it can be hacked~
These excessive leverage and margin and $$$ pumping has to STOP!!! These hedge fund crooks are taking us all down the drain with them!!! You invest YOUR MONEY, if you don’t have any then go 🤬 yourself. All these swaps and 💩 they’re talking about has to be gone away.
These ideas are also permeating the crypto markets, where leverage and margin and day trading and crypto loans are manipulating the crypto market as hedge funds do with the stock market…..so much for decentralized…
That means buy into NAKD gonna be huge!!! 4:57
Way more intelligent than CNBC
sounds like 2008 all over again w/ these opaque swap bs, but with more complicated variables this time – govt spendin levels dwarfin 2008, inflation rate dynamic, retail investors surge, cryptocurrency, crazy politicians (this has always been there). biggo bag of mixed nuts
vPooch Perfect
I don’t fully understand what happened here, so bill wang bought Viacom stock from many brokers on margin then stock crash
Going to be a great American Greed show one day, good content!