Archegos: Snowflake That Triggers the Avalanche?

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Archegos: Snowflake That Triggers the Avalanche?

Daily Reckoning2021-04-07

Archegos was not a household name until about two weeks ago when it made headlines all over the world. Archegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund ...

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LEEQF
·2021-04-07
Hahahahhaa
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1
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khonglim
·2021-04-07
Cool!
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2
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cyong
·2021-04-07
nice article
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1
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Henryee18
·2021-04-07
Gosh a mini Avalanche would sometimes good anyways.
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ArkInvest
·2021-04-07
killed my rlx
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rachelicing
·2021-04-07
Interesting
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2
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xiaochan
·2021-04-07
Nope!
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- xoxoll:
  Help me comment and like
  2021-04-07
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- Songy:
  Cery interesting
  2021-04-07
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tacocat
·2021-04-07
?
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- xoxoll:
  Help me Comment and like
  2021-04-07
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- rachelicing:
  ??
  2021-04-07
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Tony0623
·2021-04-07
cool
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3
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- Bentez:
  Comment, pls Reply my comment!
  2021-04-07
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- Bentez:
  ReplIed!
  2021-04-07
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- Tony0623:
  good
  2021-04-07
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投资不是一两天
·2021-04-07
Ridiculous article. I have been buying ipos on most brokerages for as long as i know and im not the rich folks at all
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capsulefong
·2021-04-07
Comment and like please
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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nArchegos: Snowflake That Triggers the Avalanche?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-07 12:05 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/>Daily Reckoning</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nArchegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund ...\n\n<a href=\"https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":null,"symbol_name":null,"start_time":0,"source_url":"https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/","article_id":"1144215470","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=1144215470","pubTimestamp":1617768314,"columns":[],"sourceInfo":{"source_id":"lsy1615905701595","name":"Daily Reckoning"},"weMediaInfo":null,"summary":"Archegos was not a household name until about two weeks ago when it made headlines all over the worl","collect":0,"end_time":0,"defaultTopTitle":"dailyreckoning.com","property":[],"viewcount":null,"language":"en","relate_stocks":{},"translate_title":"触发雪崩的雪花？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{},"content_text":"Archegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund trader. Family offices can be conservative in their investment approach, but they can also be as highly leveraged and as risky as any hedge fund, or even more so. It’s up to the person managing the family office.\nIn Hwang’s case, the money was mostly his own, so he ran his family office the way he used to run his hedge fund – with high leverage and almost no transparency. Hwang made huge bets in stocks, often buying as much as 10% of a company.\nHe avoided legal reporting requirements on positions of 5% or more because they were mostly held through complicated financial instruments called derivatives. Instead of actually owning the stock (which would require reporting), he bought equity swaps from big banks.\nThat gives you the same economic exposure as owning the stock but without actual stock ownership and the regulatory reporting requirements that come with ownership.\nThe Death Spiral\nMany of Hwang’s positions were in Chinese highfliers, including RLX Technologies and GSX Techedu. Chinese stocks started to decline due to a combination of the strong dollar and the internal efforts in China to reign in corporate oligarchs and reduce risk-taking by banks.\nThis led to margin calls at Archegos, which caused Hwang to skip a new offering of Viacom-CBS stock in which he was also a large holder. That caused dumping in Viacom-CBS, which led to more margin calls on Archegos: a classic Wall Street death spiral.\nThe big dealers such as Goldman, Morgan Stanley and Credit Suisse began closing out leveraged positions in Archegos at fire sales prices. The dealers lost billions of dollars, and Archegos lost even more as its cash and positions disappeared, and dealers made demands for balances due.\nAll of this was a walk down memory lane for me.\nA Near Disaster\nI was on the front lines of the Long-Term Capital Management (LTCM) bailout in 1998. I negotiated the $4 billion rescue by 14 Wall Street banks, prompted by the Federal Reserve Bank of New York.\nThe causes of the LTCM meltdown were the same as the Archegos meltdown – too much leverage and not enough transparency. Each bank knew what its individual exposures were, but none of the banks knew what the total risk in the fund was. The banks could see their slice of the risk, but not the big picture.\nNow that the financial meltdown is over, the regulatory crackdown begins. But don’t expect any changes soon. In 1998, there were immediate calls for regulation changes. Regulators wanted to limit leverage and require holders of equity derivative positions to provide transparency exactly as if they held the positions in outright stock form.\nThose regulatory changes never happened in 1998, and I don’t expect them to happen now. Wall Street makes enormous profits by selling derivatives, and hedge funds can make even bigger profits by trading them.\nDon’t Expect Changes\nThe occasional meltdown may appear, but Wall Street still comes out ahead even if an individual hedge fund or family office melts down. Despite the public hearings and calls for regulation, Wall Street controls Washington. And what Wall Street wants, Wall Street gets. That’s not some wild conspiracy theory; it’s just the way things work.\nThe problem for everyday investors is this: What happens when a future meltdown spirals out of control to the point that no rescue is possible, and the entire global system of exchanges and banks begins to collapse?\nThat did not happen in the Archegos case (yet), but it did almost happen in the case of LTCM.\nHow long will banks, investors and hedge funds keep rolling the dice? It appears they’re continuing to roll the dice in other ways since they’re pouring money into stocks when it looks like we’re near a market top…\nYou Don’t Want to Short a Bubble\nCalling a market top or bottom is difficult. Even when you see sure signs of a bubble (they are easy to spot on price charts), there’s no assurance that the bubble won’t continue.\nThe 1999 dot.com bubble was seen for what it was at the time, but investors couldn’t get enough of Pets.com (remember the sock puppet spokesperson?) or Space.com (it’s still around but only after a nasty stock price crash in 2000).\nThe same was true of the Nikkei Stock Index in Japan. As it pushed to 40,000 in late 1989, it was widely viewed as a bubble, but the momentum continued. Finally, it crashed and bottomed at 7,570 in 2009. It only recently made it back to 30,000 after a 30-year recovery.\nYou don’t want to short a bubble because if momentum continues, you can lose a lot of money being right. There’s usually plenty of money to be made on the way down once the bubble bursts. Still, there are certain indicators of a market nearing a top that are more reliable than others.\nOne such indicator is called “distribution” by Wall Street insiders. It refers to a process of insiders and banks dumping stock on unsuspecting retail investors. The retail investors often don’t have access to the best deals, such as IPOs, so they snap up any such Wall Street offerings readily.\nLambs to Slaughter\nLittle do they know that the insiders see the crash coming and are dumping high-priced stocks on the little guy so they can escape the collapse with profits in hand…\nYou’ve probably heard of Robinhood by now. Robinhood is an online trading platform available as a mobile phone app that is favored by many retail investors, especially first-time traders and millennials using government handout checks to place leveraged bets using options.\nRobinHood has announced that their platform will now be available for IPOs, which are among the most prized offerings and often soar in price on the first day of trading.\nBecause of that first-day dynamic, Wall Street generally keeps the IPO allocations for their most favored clients, especially large institutions. If IPOs are now being distributed to small retail accounts, it means that the Wall Street banks don’t expect them to perform particularly well.\nThey just want to get the IPOs done so entrepreneurs can get rich, and the banks can collect fees. If retail investors get burned, well that’s just too bad for them. Distribution is most common near market tops.\nAnd that may be just where we are right now. It’s a good time to reduce your exposure to equities and increase your cash holdings.\nThere will be plenty of opportunities to profit on the way down.\nAgain, I’m not definitively calling a market top right now. But it’s better to get out a little too early than a little too late.","kind":"news","is_publish_news":false,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":341921776,"gmtCreate":1617772830095,"gmtModify":1704702941412,"author":{"id":"3572235673675008","authorId":"3572235673675008","name":"LEEQF","avatar":"https://static.tigerbbs.com/ead66a2c538631d15658309f808c7d40","vip":1,"hat":"https://static.tigerbbs.com/b0a2963eb37c60c5d6d4a8dbcd266952","crmLevel":3,"crmLevelSwitch":0,"idStr":"3572235673675008","authorIdStr":"3572235673675008"},"htmlText":"Hahahahhaa&nbsp;","listText":"Hahahahhaa&nbsp;","text":"Hahahahhaa","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/341921776","repostId":1144215470,"repostType":4,"repost":{"id":"1144215470","kind":"news","pubTimestamp":1617768314,"share":"https://ttm.financial/m/news/1144215470?lang=&edition=fundamental","pubTime":"2021-04-07 12:05","market":"us","language":"en","title":"Archegos: Snowflake That Triggers the Avalanche?","url":"https://stock-news.laohu8.com/highlight/detail?id=1144215470","media":"Daily Reckoning","summary":"Archegos was not a household name until about two weeks ago when it made headlines all over the worl","content":"Archegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund trader. Family offices can be conservative in their investment approach, but they can also be as highly leveraged and as risky as any hedge fund, or even more so. It’s up to the person managing the family office.\nIn Hwang’s case, the money was mostly his own, so he ran his family office the way he used to run his hedge fund – with high leverage and almost no transparency. Hwang made huge bets in stocks, often buying as much as 10% of a company.\nHe avoided legal reporting requirements on positions of 5% or more because they were mostly held through complicated financial instruments called derivatives. Instead of actually owning the stock (which would require reporting), he bought equity swaps from big banks.\nThat gives you the same economic exposure as owning the stock but without actual stock ownership and the regulatory reporting requirements that come with ownership.\nThe Death Spiral\nMany of Hwang’s positions were in Chinese highfliers, including RLX Technologies and GSX Techedu. Chinese stocks started to decline due to a combination of the strong dollar and the internal efforts in China to reign in corporate oligarchs and reduce risk-taking by banks.\nThis led to margin calls at Archegos, which caused Hwang to skip a new offering of Viacom-CBS stock in which he was also a large holder. That caused dumping in Viacom-CBS, which led to more margin calls on Archegos: a classic Wall Street death spiral.\nThe big dealers such as Goldman, Morgan Stanley and Credit Suisse began closing out leveraged positions in Archegos at fire sales prices. The dealers lost billions of dollars, and Archegos lost even more as its cash and positions disappeared, and dealers made demands for balances due.\nAll of this was a walk down memory lane for me.\nA Near Disaster\nI was on the front lines of the Long-Term Capital Management (LTCM) bailout in 1998. I negotiated the $4 billion rescue by 14 Wall Street banks, prompted by the Federal Reserve Bank of New York.\nThe causes of the LTCM meltdown were the same as the Archegos meltdown – too much leverage and not enough transparency. Each bank knew what its individual exposures were, but none of the banks knew what the total risk in the fund was. The banks could see their slice of the risk, but not the big picture.\nNow that the financial meltdown is over, the regulatory crackdown begins. But don’t expect any changes soon. In 1998, there were immediate calls for regulation changes. Regulators wanted to limit leverage and require holders of equity derivative positions to provide transparency exactly as if they held the positions in outright stock form.\nThose regulatory changes never happened in 1998, and I don’t expect them to happen now. Wall Street makes enormous profits by selling derivatives, and hedge funds can make even bigger profits by trading them.\nDon’t Expect Changes\nThe occasional meltdown may appear, but Wall Street still comes out ahead even if an individual hedge fund or family office melts down. Despite the public hearings and calls for regulation, Wall Street controls Washington. And what Wall Street wants, Wall Street gets. That’s not some wild conspiracy theory; it’s just the way things work.\nThe problem for everyday investors is this: What happens when a future meltdown spirals out of control to the point that no rescue is possible, and the entire global system of exchanges and banks begins to collapse?\nThat did not happen in the Archegos case (yet), but it did almost happen in the case of LTCM.\nHow long will banks, investors and hedge funds keep rolling the dice? It appears they’re continuing to roll the dice in other ways since they’re pouring money into stocks when it looks like we’re near a market top…\nYou Don’t Want to Short a Bubble\nCalling a market top or bottom is difficult. Even when you see sure signs of a bubble (they are easy to spot on price charts), there’s no assurance that the bubble won’t continue.\nThe 1999 dot.com bubble was seen for what it was at the time, but investors couldn’t get enough of Pets.com (remember the sock puppet spokesperson?) or Space.com (it’s still around but only after a nasty stock price crash in 2000).\nThe same was true of the Nikkei Stock Index in Japan. As it pushed to 40,000 in late 1989, it was widely viewed as a bubble, but the momentum continued. Finally, it crashed and bottomed at 7,570 in 2009. It only recently made it back to 30,000 after a 30-year recovery.\nYou don’t want to short a bubble because if momentum continues, you can lose a lot of money being right. There’s usually plenty of money to be made on the way down once the bubble bursts. Still, there are certain indicators of a market nearing a top that are more reliable than others.\nOne such indicator is called “distribution” by Wall Street insiders. It refers to a process of insiders and banks dumping stock on unsuspecting retail investors. The retail investors often don’t have access to the best deals, such as IPOs, so they snap up any such Wall Street offerings readily.\nLambs to Slaughter\nLittle do they know that the insiders see the crash coming and are dumping high-priced stocks on the little guy so they can escape the collapse with profits in hand…\nYou’ve probably heard of Robinhood by now. Robinhood is an online trading platform available as a mobile phone app that is favored by many retail investors, especially first-time traders and millennials using government handout checks to place leveraged bets using options.\nRobinHood has announced that their platform will now be available for IPOs, which are among the most prized offerings and often soar in price on the first day of trading.\nBecause of that first-day dynamic, Wall Street generally keeps the IPO allocations for their most favored clients, especially large institutions. If IPOs are now being distributed to small retail accounts, it means that the Wall Street banks don’t expect them to perform particularly well.\nThey just want to get the IPOs done so entrepreneurs can get rich, and the banks can collect fees. If retail investors get burned, well that’s just too bad for them. Distribution is most common near market tops.\nAnd that may be just where we are right now. It’s a good time to reduce your exposure to equities and increase your cash holdings.\nThere will be plenty of opportunities to profit on the way down.\nAgain, I’m not definitively calling a market top right now. But it’s better to get out a little too early than a little too late.","source":"lsy1615905701595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Archegos: Snowflake That Triggers the Avalanche?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nArchegos: Snowflake That Triggers the Avalanche?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-07 12:05 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/>Daily Reckoning</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nArchegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund ...\n\n<a href=\"https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1144215470","content_text":"Archegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund trader. Family offices can be conservative in their investment approach, but they can also be as highly leveraged and as risky as any hedge fund, or even more so. It’s up to the person managing the family office.\nIn Hwang’s case, the money was mostly his own, so he ran his family office the way he used to run his hedge fund – with high leverage and almost no transparency. Hwang made huge bets in stocks, often buying as much as 10% of a company.\nHe avoided legal reporting requirements on positions of 5% or more because they were mostly held through complicated financial instruments called derivatives. Instead of actually owning the stock (which would require reporting), he bought equity swaps from big banks.\nThat gives you the same economic exposure as owning the stock but without actual stock ownership and the regulatory reporting requirements that come with ownership.\nThe Death Spiral\nMany of Hwang’s positions were in Chinese highfliers, including RLX Technologies and GSX Techedu. Chinese stocks started to decline due to a combination of the strong dollar and the internal efforts in China to reign in corporate oligarchs and reduce risk-taking by banks.\nThis led to margin calls at Archegos, which caused Hwang to skip a new offering of Viacom-CBS stock in which he was also a large holder. That caused dumping in Viacom-CBS, which led to more margin calls on Archegos: a classic Wall Street death spiral.\nThe big dealers such as Goldman, Morgan Stanley and Credit Suisse began closing out leveraged positions in Archegos at fire sales prices. The dealers lost billions of dollars, and Archegos lost even more as its cash and positions disappeared, and dealers made demands for balances due.\nAll of this was a walk down memory lane for me.\nA Near Disaster\nI was on the front lines of the Long-Term Capital Management (LTCM) bailout in 1998. I negotiated the $4 billion rescue by 14 Wall Street banks, prompted by the Federal Reserve Bank of New York.\nThe causes of the LTCM meltdown were the same as the Archegos meltdown – too much leverage and not enough transparency. Each bank knew what its individual exposures were, but none of the banks knew what the total risk in the fund was. The banks could see their slice of the risk, but not the big picture.\nNow that the financial meltdown is over, the regulatory crackdown begins. But don’t expect any changes soon. In 1998, there were immediate calls for regulation changes. Regulators wanted to limit leverage and require holders of equity derivative positions to provide transparency exactly as if they held the positions in outright stock form.\nThose regulatory changes never happened in 1998, and I don’t expect them to happen now. Wall Street makes enormous profits by selling derivatives, and hedge funds can make even bigger profits by trading them.\nDon’t Expect Changes\nThe occasional meltdown may appear, but Wall Street still comes out ahead even if an individual hedge fund or family office melts down. Despite the public hearings and calls for regulation, Wall Street controls Washington. And what Wall Street wants, Wall Street gets. That’s not some wild conspiracy theory; it’s just the way things work.\nThe problem for everyday investors is this: What happens when a future meltdown spirals out of control to the point that no rescue is possible, and the entire global system of exchanges and banks begins to collapse?\nThat did not happen in the Archegos case (yet), but it did almost happen in the case of LTCM.\nHow long will banks, investors and hedge funds keep rolling the dice? It appears they’re continuing to roll the dice in other ways since they’re pouring money into stocks when it looks like we’re near a market top…\nYou Don’t Want to Short a Bubble\nCalling a market top or bottom is difficult. Even when you see sure signs of a bubble (they are easy to spot on price charts), there’s no assurance that the bubble won’t continue.\nThe 1999 dot.com bubble was seen for what it was at the time, but investors couldn’t get enough of Pets.com (remember the sock puppet spokesperson?) or Space.com (it’s still around but only after a nasty stock price crash in 2000).\nThe same was true of the Nikkei Stock Index in Japan. As it pushed to 40,000 in late 1989, it was widely viewed as a bubble, but the momentum continued. Finally, it crashed and bottomed at 7,570 in 2009. It only recently made it back to 30,000 after a 30-year recovery.\nYou don’t want to short a bubble because if momentum continues, you can lose a lot of money being right. There’s usually plenty of money to be made on the way down once the bubble bursts. Still, there are certain indicators of a market nearing a top that are more reliable than others.\nOne such indicator is called “distribution” by Wall Street insiders. It refers to a process of insiders and banks dumping stock on unsuspecting retail investors. The retail investors often don’t have access to the best deals, such as IPOs, so they snap up any such Wall Street offerings readily.\nLambs to Slaughter\nLittle do they know that the insiders see the crash coming and are dumping high-priced stocks on the little guy so they can escape the collapse with profits in hand…\nYou’ve probably heard of Robinhood by now. Robinhood is an online trading platform available as a mobile phone app that is favored by many retail investors, especially first-time traders and millennials using government handout checks to place leveraged bets using options.\nRobinHood has announced that their platform will now be available for IPOs, which are among the most prized offerings and often soar in price on the first day of trading.\nBecause of that first-day dynamic, Wall Street generally keeps the IPO allocations for their most favored clients, especially large institutions. If IPOs are now being distributed to small retail accounts, it means that the Wall Street banks don’t expect them to perform particularly well.\nThey just want to get the IPOs done so entrepreneurs can get rich, and the banks can collect fees. If retail investors get burned, well that’s just too bad for them. Distribution is most common near market tops.\nAnd that may be just where we are right now. It’s a good time to reduce your exposure to equities and increase your cash holdings.\nThere will be plenty of opportunities to profit on the way down.\nAgain, I’m not definitively calling a market top right now. But it’s better to get out a little too early than a little too late.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":341968458,"gmtCreate":1617771906974,"gmtModify":1704702929002,"author":{"id":"3559040477576070","authorId":"3559040477576070","name":"khonglim","avatar":"https://static.tigerbbs.com/56d64d0d3ea6ecf4bdafaeed7007f8fb","vip":1,"crmLevel":5,"crmLevelSwitch":0,"idStr":"3559040477576070","authorIdStr":"3559040477576070"},"htmlText":"Cool!","listText":"Cool!","text":"Cool!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/341968458","repostId":1144215470,"repostType":4,"repost":{"id":"1144215470","kind":"news","pubTimestamp":1617768314,"share":"https://ttm.financial/m/news/1144215470?lang=&edition=fundamental","pubTime":"2021-04-07 12:05","market":"us","language":"en","title":"Archegos: Snowflake That Triggers the Avalanche?","url":"https://stock-news.laohu8.com/highlight/detail?id=1144215470","media":"Daily Reckoning","summary":"Archegos was not a household name until about two weeks ago when it made headlines all over the worl","content":"Archegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund trader. Family offices can be conservative in their investment approach, but they can also be as highly leveraged and as risky as any hedge fund, or even more so. It’s up to the person managing the family office.\nIn Hwang’s case, the money was mostly his own, so he ran his family office the way he used to run his hedge fund – with high leverage and almost no transparency. Hwang made huge bets in stocks, often buying as much as 10% of a company.\nHe avoided legal reporting requirements on positions of 5% or more because they were mostly held through complicated financial instruments called derivatives. Instead of actually owning the stock (which would require reporting), he bought equity swaps from big banks.\nThat gives you the same economic exposure as owning the stock but without actual stock ownership and the regulatory reporting requirements that come with ownership.\nThe Death Spiral\nMany of Hwang’s positions were in Chinese highfliers, including RLX Technologies and GSX Techedu. Chinese stocks started to decline due to a combination of the strong dollar and the internal efforts in China to reign in corporate oligarchs and reduce risk-taking by banks.\nThis led to margin calls at Archegos, which caused Hwang to skip a new offering of Viacom-CBS stock in which he was also a large holder. That caused dumping in Viacom-CBS, which led to more margin calls on Archegos: a classic Wall Street death spiral.\nThe big dealers such as Goldman, Morgan Stanley and Credit Suisse began closing out leveraged positions in Archegos at fire sales prices. The dealers lost billions of dollars, and Archegos lost even more as its cash and positions disappeared, and dealers made demands for balances due.\nAll of this was a walk down memory lane for me.\nA Near Disaster\nI was on the front lines of the Long-Term Capital Management (LTCM) bailout in 1998. I negotiated the $4 billion rescue by 14 Wall Street banks, prompted by the Federal Reserve Bank of New York.\nThe causes of the LTCM meltdown were the same as the Archegos meltdown – too much leverage and not enough transparency. Each bank knew what its individual exposures were, but none of the banks knew what the total risk in the fund was. The banks could see their slice of the risk, but not the big picture.\nNow that the financial meltdown is over, the regulatory crackdown begins. But don’t expect any changes soon. In 1998, there were immediate calls for regulation changes. Regulators wanted to limit leverage and require holders of equity derivative positions to provide transparency exactly as if they held the positions in outright stock form.\nThose regulatory changes never happened in 1998, and I don’t expect them to happen now. Wall Street makes enormous profits by selling derivatives, and hedge funds can make even bigger profits by trading them.\nDon’t Expect Changes\nThe occasional meltdown may appear, but Wall Street still comes out ahead even if an individual hedge fund or family office melts down. Despite the public hearings and calls for regulation, Wall Street controls Washington. And what Wall Street wants, Wall Street gets. That’s not some wild conspiracy theory; it’s just the way things work.\nThe problem for everyday investors is this: What happens when a future meltdown spirals out of control to the point that no rescue is possible, and the entire global system of exchanges and banks begins to collapse?\nThat did not happen in the Archegos case (yet), but it did almost happen in the case of LTCM.\nHow long will banks, investors and hedge funds keep rolling the dice? It appears they’re continuing to roll the dice in other ways since they’re pouring money into stocks when it looks like we’re near a market top…\nYou Don’t Want to Short a Bubble\nCalling a market top or bottom is difficult. Even when you see sure signs of a bubble (they are easy to spot on price charts), there’s no assurance that the bubble won’t continue.\nThe 1999 dot.com bubble was seen for what it was at the time, but investors couldn’t get enough of Pets.com (remember the sock puppet spokesperson?) or Space.com (it’s still around but only after a nasty stock price crash in 2000).\nThe same was true of the Nikkei Stock Index in Japan. As it pushed to 40,000 in late 1989, it was widely viewed as a bubble, but the momentum continued. Finally, it crashed and bottomed at 7,570 in 2009. It only recently made it back to 30,000 after a 30-year recovery.\nYou don’t want to short a bubble because if momentum continues, you can lose a lot of money being right. There’s usually plenty of money to be made on the way down once the bubble bursts. Still, there are certain indicators of a market nearing a top that are more reliable than others.\nOne such indicator is called “distribution” by Wall Street insiders. It refers to a process of insiders and banks dumping stock on unsuspecting retail investors. The retail investors often don’t have access to the best deals, such as IPOs, so they snap up any such Wall Street offerings readily.\nLambs to Slaughter\nLittle do they know that the insiders see the crash coming and are dumping high-priced stocks on the little guy so they can escape the collapse with profits in hand…\nYou’ve probably heard of Robinhood by now. Robinhood is an online trading platform available as a mobile phone app that is favored by many retail investors, especially first-time traders and millennials using government handout checks to place leveraged bets using options.\nRobinHood has announced that their platform will now be available for IPOs, which are among the most prized offerings and often soar in price on the first day of trading.\nBecause of that first-day dynamic, Wall Street generally keeps the IPO allocations for their most favored clients, especially large institutions. If IPOs are now being distributed to small retail accounts, it means that the Wall Street banks don’t expect them to perform particularly well.\nThey just want to get the IPOs done so entrepreneurs can get rich, and the banks can collect fees. If retail investors get burned, well that’s just too bad for them. Distribution is most common near market tops.\nAnd that may be just where we are right now. It’s a good time to reduce your exposure to equities and increase your cash holdings.\nThere will be plenty of opportunities to profit on the way down.\nAgain, I’m not definitively calling a market top right now. But it’s better to get out a little too early than a little too late.","source":"lsy1615905701595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Archegos: Snowflake That Triggers the Avalanche?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nArchegos: Snowflake That Triggers the Avalanche?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-07 12:05 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/>Daily Reckoning</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nArchegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund ...\n\n<a href=\"https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1144215470","content_text":"Archegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund trader. Family offices can be conservative in their investment approach, but they can also be as highly leveraged and as risky as any hedge fund, or even more so. It’s up to the person managing the family office.\nIn Hwang’s case, the money was mostly his own, so he ran his family office the way he used to run his hedge fund – with high leverage and almost no transparency. Hwang made huge bets in stocks, often buying as much as 10% of a company.\nHe avoided legal reporting requirements on positions of 5% or more because they were mostly held through complicated financial instruments called derivatives. Instead of actually owning the stock (which would require reporting), he bought equity swaps from big banks.\nThat gives you the same economic exposure as owning the stock but without actual stock ownership and the regulatory reporting requirements that come with ownership.\nThe Death Spiral\nMany of Hwang’s positions were in Chinese highfliers, including RLX Technologies and GSX Techedu. Chinese stocks started to decline due to a combination of the strong dollar and the internal efforts in China to reign in corporate oligarchs and reduce risk-taking by banks.\nThis led to margin calls at Archegos, which caused Hwang to skip a new offering of Viacom-CBS stock in which he was also a large holder. That caused dumping in Viacom-CBS, which led to more margin calls on Archegos: a classic Wall Street death spiral.\nThe big dealers such as Goldman, Morgan Stanley and Credit Suisse began closing out leveraged positions in Archegos at fire sales prices. The dealers lost billions of dollars, and Archegos lost even more as its cash and positions disappeared, and dealers made demands for balances due.\nAll of this was a walk down memory lane for me.\nA Near Disaster\nI was on the front lines of the Long-Term Capital Management (LTCM) bailout in 1998. I negotiated the $4 billion rescue by 14 Wall Street banks, prompted by the Federal Reserve Bank of New York.\nThe causes of the LTCM meltdown were the same as the Archegos meltdown – too much leverage and not enough transparency. Each bank knew what its individual exposures were, but none of the banks knew what the total risk in the fund was. The banks could see their slice of the risk, but not the big picture.\nNow that the financial meltdown is over, the regulatory crackdown begins. But don’t expect any changes soon. In 1998, there were immediate calls for regulation changes. Regulators wanted to limit leverage and require holders of equity derivative positions to provide transparency exactly as if they held the positions in outright stock form.\nThose regulatory changes never happened in 1998, and I don’t expect them to happen now. Wall Street makes enormous profits by selling derivatives, and hedge funds can make even bigger profits by trading them.\nDon’t Expect Changes\nThe occasional meltdown may appear, but Wall Street still comes out ahead even if an individual hedge fund or family office melts down. Despite the public hearings and calls for regulation, Wall Street controls Washington. And what Wall Street wants, Wall Street gets. That’s not some wild conspiracy theory; it’s just the way things work.\nThe problem for everyday investors is this: What happens when a future meltdown spirals out of control to the point that no rescue is possible, and the entire global system of exchanges and banks begins to collapse?\nThat did not happen in the Archegos case (yet), but it did almost happen in the case of LTCM.\nHow long will banks, investors and hedge funds keep rolling the dice? It appears they’re continuing to roll the dice in other ways since they’re pouring money into stocks when it looks like we’re near a market top…\nYou Don’t Want to Short a Bubble\nCalling a market top or bottom is difficult. Even when you see sure signs of a bubble (they are easy to spot on price charts), there’s no assurance that the bubble won’t continue.\nThe 1999 dot.com bubble was seen for what it was at the time, but investors couldn’t get enough of Pets.com (remember the sock puppet spokesperson?) or Space.com (it’s still around but only after a nasty stock price crash in 2000).\nThe same was true of the Nikkei Stock Index in Japan. As it pushed to 40,000 in late 1989, it was widely viewed as a bubble, but the momentum continued. Finally, it crashed and bottomed at 7,570 in 2009. It only recently made it back to 30,000 after a 30-year recovery.\nYou don’t want to short a bubble because if momentum continues, you can lose a lot of money being right. There’s usually plenty of money to be made on the way down once the bubble bursts. Still, there are certain indicators of a market nearing a top that are more reliable than others.\nOne such indicator is called “distribution” by Wall Street insiders. It refers to a process of insiders and banks dumping stock on unsuspecting retail investors. The retail investors often don’t have access to the best deals, such as IPOs, so they snap up any such Wall Street offerings readily.\nLambs to Slaughter\nLittle do they know that the insiders see the crash coming and are dumping high-priced stocks on the little guy so they can escape the collapse with profits in hand…\nYou’ve probably heard of Robinhood by now. Robinhood is an online trading platform available as a mobile phone app that is favored by many retail investors, especially first-time traders and millennials using government handout checks to place leveraged bets using options.\nRobinHood has announced that their platform will now be available for IPOs, which are among the most prized offerings and often soar in price on the first day of trading.\nBecause of that first-day dynamic, Wall Street generally keeps the IPO allocations for their most favored clients, especially large institutions. If IPOs are now being distributed to small retail accounts, it means that the Wall Street banks don’t expect them to perform particularly well.\nThey just want to get the IPOs done so entrepreneurs can get rich, and the banks can collect fees. If retail investors get burned, well that’s just too bad for them. Distribution is most common near market tops.\nAnd that may be just where we are right now. It’s a good time to reduce your exposure to equities and increase your cash holdings.\nThere will be plenty of opportunities to profit on the way down.\nAgain, I’m not definitively calling a market top right now. But it’s better to get out a little too early than a little too late.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":341961017,"gmtCreate":1617771726139,"gmtModify":1704702926552,"author":{"id":"3568946367701965","authorId":"3568946367701965","name":"cyong","avatar":"https://static.tigerbbs.com/8575f448e784d75d9b7341464aa54fd8","vip":1,"crmLevel":1,"crmLevelSwitch":1,"idStr":"3568946367701965","authorIdStr":"3568946367701965"},"htmlText":"nice article","listText":"nice article","text":"nice article","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/341961017","repostId":1144215470,"repostType":4,"repost":{"id":"1144215470","kind":"news","pubTimestamp":1617768314,"share":"https://ttm.financial/m/news/1144215470?lang=&edition=fundamental","pubTime":"2021-04-07 12:05","market":"us","language":"en","title":"Archegos: Snowflake That Triggers the Avalanche?","url":"https://stock-news.laohu8.com/highlight/detail?id=1144215470","media":"Daily Reckoning","summary":"Archegos was not a household name until about two weeks ago when it made headlines all over the worl","content":"Archegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund trader. Family offices can be conservative in their investment approach, but they can also be as highly leveraged and as risky as any hedge fund, or even more so. It’s up to the person managing the family office.\nIn Hwang’s case, the money was mostly his own, so he ran his family office the way he used to run his hedge fund – with high leverage and almost no transparency. Hwang made huge bets in stocks, often buying as much as 10% of a company.\nHe avoided legal reporting requirements on positions of 5% or more because they were mostly held through complicated financial instruments called derivatives. Instead of actually owning the stock (which would require reporting), he bought equity swaps from big banks.\nThat gives you the same economic exposure as owning the stock but without actual stock ownership and the regulatory reporting requirements that come with ownership.\nThe Death Spiral\nMany of Hwang’s positions were in Chinese highfliers, including RLX Technologies and GSX Techedu. Chinese stocks started to decline due to a combination of the strong dollar and the internal efforts in China to reign in corporate oligarchs and reduce risk-taking by banks.\nThis led to margin calls at Archegos, which caused Hwang to skip a new offering of Viacom-CBS stock in which he was also a large holder. That caused dumping in Viacom-CBS, which led to more margin calls on Archegos: a classic Wall Street death spiral.\nThe big dealers such as Goldman, Morgan Stanley and Credit Suisse began closing out leveraged positions in Archegos at fire sales prices. The dealers lost billions of dollars, and Archegos lost even more as its cash and positions disappeared, and dealers made demands for balances due.\nAll of this was a walk down memory lane for me.\nA Near Disaster\nI was on the front lines of the Long-Term Capital Management (LTCM) bailout in 1998. I negotiated the $4 billion rescue by 14 Wall Street banks, prompted by the Federal Reserve Bank of New York.\nThe causes of the LTCM meltdown were the same as the Archegos meltdown – too much leverage and not enough transparency. Each bank knew what its individual exposures were, but none of the banks knew what the total risk in the fund was. The banks could see their slice of the risk, but not the big picture.\nNow that the financial meltdown is over, the regulatory crackdown begins. But don’t expect any changes soon. In 1998, there were immediate calls for regulation changes. Regulators wanted to limit leverage and require holders of equity derivative positions to provide transparency exactly as if they held the positions in outright stock form.\nThose regulatory changes never happened in 1998, and I don’t expect them to happen now. Wall Street makes enormous profits by selling derivatives, and hedge funds can make even bigger profits by trading them.\nDon’t Expect Changes\nThe occasional meltdown may appear, but Wall Street still comes out ahead even if an individual hedge fund or family office melts down. Despite the public hearings and calls for regulation, Wall Street controls Washington. And what Wall Street wants, Wall Street gets. That’s not some wild conspiracy theory; it’s just the way things work.\nThe problem for everyday investors is this: What happens when a future meltdown spirals out of control to the point that no rescue is possible, and the entire global system of exchanges and banks begins to collapse?\nThat did not happen in the Archegos case (yet), but it did almost happen in the case of LTCM.\nHow long will banks, investors and hedge funds keep rolling the dice? It appears they’re continuing to roll the dice in other ways since they’re pouring money into stocks when it looks like we’re near a market top…\nYou Don’t Want to Short a Bubble\nCalling a market top or bottom is difficult. Even when you see sure signs of a bubble (they are easy to spot on price charts), there’s no assurance that the bubble won’t continue.\nThe 1999 dot.com bubble was seen for what it was at the time, but investors couldn’t get enough of Pets.com (remember the sock puppet spokesperson?) or Space.com (it’s still around but only after a nasty stock price crash in 2000).\nThe same was true of the Nikkei Stock Index in Japan. As it pushed to 40,000 in late 1989, it was widely viewed as a bubble, but the momentum continued. Finally, it crashed and bottomed at 7,570 in 2009. It only recently made it back to 30,000 after a 30-year recovery.\nYou don’t want to short a bubble because if momentum continues, you can lose a lot of money being right. There’s usually plenty of money to be made on the way down once the bubble bursts. Still, there are certain indicators of a market nearing a top that are more reliable than others.\nOne such indicator is called “distribution” by Wall Street insiders. It refers to a process of insiders and banks dumping stock on unsuspecting retail investors. The retail investors often don’t have access to the best deals, such as IPOs, so they snap up any such Wall Street offerings readily.\nLambs to Slaughter\nLittle do they know that the insiders see the crash coming and are dumping high-priced stocks on the little guy so they can escape the collapse with profits in hand…\nYou’ve probably heard of Robinhood by now. Robinhood is an online trading platform available as a mobile phone app that is favored by many retail investors, especially first-time traders and millennials using government handout checks to place leveraged bets using options.\nRobinHood has announced that their platform will now be available for IPOs, which are among the most prized offerings and often soar in price on the first day of trading.\nBecause of that first-day dynamic, Wall Street generally keeps the IPO allocations for their most favored clients, especially large institutions. If IPOs are now being distributed to small retail accounts, it means that the Wall Street banks don’t expect them to perform particularly well.\nThey just want to get the IPOs done so entrepreneurs can get rich, and the banks can collect fees. If retail investors get burned, well that’s just too bad for them. Distribution is most common near market tops.\nAnd that may be just where we are right now. It’s a good time to reduce your exposure to equities and increase your cash holdings.\nThere will be plenty of opportunities to profit on the way down.\nAgain, I’m not definitively calling a market top right now. But it’s better to get out a little too early than a little too late.","source":"lsy1615905701595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Archegos: Snowflake That Triggers the Avalanche?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nArchegos: Snowflake That Triggers the Avalanche?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-07 12:05 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/>Daily Reckoning</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nArchegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund ...\n\n<a href=\"https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1144215470","content_text":"Archegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund trader. Family offices can be conservative in their investment approach, but they can also be as highly leveraged and as risky as any hedge fund, or even more so. It’s up to the person managing the family office.\nIn Hwang’s case, the money was mostly his own, so he ran his family office the way he used to run his hedge fund – with high leverage and almost no transparency. Hwang made huge bets in stocks, often buying as much as 10% of a company.\nHe avoided legal reporting requirements on positions of 5% or more because they were mostly held through complicated financial instruments called derivatives. Instead of actually owning the stock (which would require reporting), he bought equity swaps from big banks.\nThat gives you the same economic exposure as owning the stock but without actual stock ownership and the regulatory reporting requirements that come with ownership.\nThe Death Spiral\nMany of Hwang’s positions were in Chinese highfliers, including RLX Technologies and GSX Techedu. Chinese stocks started to decline due to a combination of the strong dollar and the internal efforts in China to reign in corporate oligarchs and reduce risk-taking by banks.\nThis led to margin calls at Archegos, which caused Hwang to skip a new offering of Viacom-CBS stock in which he was also a large holder. That caused dumping in Viacom-CBS, which led to more margin calls on Archegos: a classic Wall Street death spiral.\nThe big dealers such as Goldman, Morgan Stanley and Credit Suisse began closing out leveraged positions in Archegos at fire sales prices. The dealers lost billions of dollars, and Archegos lost even more as its cash and positions disappeared, and dealers made demands for balances due.\nAll of this was a walk down memory lane for me.\nA Near Disaster\nI was on the front lines of the Long-Term Capital Management (LTCM) bailout in 1998. I negotiated the $4 billion rescue by 14 Wall Street banks, prompted by the Federal Reserve Bank of New York.\nThe causes of the LTCM meltdown were the same as the Archegos meltdown – too much leverage and not enough transparency. Each bank knew what its individual exposures were, but none of the banks knew what the total risk in the fund was. The banks could see their slice of the risk, but not the big picture.\nNow that the financial meltdown is over, the regulatory crackdown begins. But don’t expect any changes soon. In 1998, there were immediate calls for regulation changes. Regulators wanted to limit leverage and require holders of equity derivative positions to provide transparency exactly as if they held the positions in outright stock form.\nThose regulatory changes never happened in 1998, and I don’t expect them to happen now. Wall Street makes enormous profits by selling derivatives, and hedge funds can make even bigger profits by trading them.\nDon’t Expect Changes\nThe occasional meltdown may appear, but Wall Street still comes out ahead even if an individual hedge fund or family office melts down. Despite the public hearings and calls for regulation, Wall Street controls Washington. And what Wall Street wants, Wall Street gets. That’s not some wild conspiracy theory; it’s just the way things work.\nThe problem for everyday investors is this: What happens when a future meltdown spirals out of control to the point that no rescue is possible, and the entire global system of exchanges and banks begins to collapse?\nThat did not happen in the Archegos case (yet), but it did almost happen in the case of LTCM.\nHow long will banks, investors and hedge funds keep rolling the dice? It appears they’re continuing to roll the dice in other ways since they’re pouring money into stocks when it looks like we’re near a market top…\nYou Don’t Want to Short a Bubble\nCalling a market top or bottom is difficult. Even when you see sure signs of a bubble (they are easy to spot on price charts), there’s no assurance that the bubble won’t continue.\nThe 1999 dot.com bubble was seen for what it was at the time, but investors couldn’t get enough of Pets.com (remember the sock puppet spokesperson?) or Space.com (it’s still around but only after a nasty stock price crash in 2000).\nThe same was true of the Nikkei Stock Index in Japan. As it pushed to 40,000 in late 1989, it was widely viewed as a bubble, but the momentum continued. Finally, it crashed and bottomed at 7,570 in 2009. It only recently made it back to 30,000 after a 30-year recovery.\nYou don’t want to short a bubble because if momentum continues, you can lose a lot of money being right. There’s usually plenty of money to be made on the way down once the bubble bursts. Still, there are certain indicators of a market nearing a top that are more reliable than others.\nOne such indicator is called “distribution” by Wall Street insiders. It refers to a process of insiders and banks dumping stock on unsuspecting retail investors. The retail investors often don’t have access to the best deals, such as IPOs, so they snap up any such Wall Street offerings readily.\nLambs to Slaughter\nLittle do they know that the insiders see the crash coming and are dumping high-priced stocks on the little guy so they can escape the collapse with profits in hand…\nYou’ve probably heard of Robinhood by now. Robinhood is an online trading platform available as a mobile phone app that is favored by many retail investors, especially first-time traders and millennials using government handout checks to place leveraged bets using options.\nRobinHood has announced that their platform will now be available for IPOs, which are among the most prized offerings and often soar in price on the first day of trading.\nBecause of that first-day dynamic, Wall Street generally keeps the IPO allocations for their most favored clients, especially large institutions. If IPOs are now being distributed to small retail accounts, it means that the Wall Street banks don’t expect them to perform particularly well.\nThey just want to get the IPOs done so entrepreneurs can get rich, and the banks can collect fees. If retail investors get burned, well that’s just too bad for them. Distribution is most common near market tops.\nAnd that may be just where we are right now. It’s a good time to reduce your exposure to equities and increase your cash holdings.\nThere will be plenty of opportunities to profit on the way down.\nAgain, I’m not definitively calling a market top right now. But it’s better to get out a little too early than a little too late.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":341969815,"gmtCreate":1617771578637,"gmtModify":1704702924261,"author":{"id":"3561088065415396","authorId":"3561088065415396","name":"Henryee18","avatar":"https://static.tigerbbs.com/68e1124a4989ce380d6aa143a07b2620","vip":1,"hat":"https://static.tigerbbs.com/3b7820dfed76481d8dc4de6ac5a7a136","crmLevel":9,"crmLevelSwitch":1,"idStr":"3561088065415396","authorIdStr":"3561088065415396"},"htmlText":"Gosh a mini&nbsp;Avalanche would sometimes good anyways.","listText":"Gosh a mini&nbsp;Avalanche would sometimes good anyways.","text":"Gosh a mini Avalanche would sometimes good anyways.","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/341969815","repostId":1144215470,"repostType":4,"repost":{"id":"1144215470","kind":"news","pubTimestamp":1617768314,"share":"https://ttm.financial/m/news/1144215470?lang=&edition=fundamental","pubTime":"2021-04-07 12:05","market":"us","language":"en","title":"Archegos: Snowflake That Triggers the Avalanche?","url":"https://stock-news.laohu8.com/highlight/detail?id=1144215470","media":"Daily Reckoning","summary":"Archegos was not a household name until about two weeks ago when it made headlines all over the worl","content":"Archegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund trader. Family offices can be conservative in their investment approach, but they can also be as highly leveraged and as risky as any hedge fund, or even more so. It’s up to the person managing the family office.\nIn Hwang’s case, the money was mostly his own, so he ran his family office the way he used to run his hedge fund – with high leverage and almost no transparency. Hwang made huge bets in stocks, often buying as much as 10% of a company.\nHe avoided legal reporting requirements on positions of 5% or more because they were mostly held through complicated financial instruments called derivatives. Instead of actually owning the stock (which would require reporting), he bought equity swaps from big banks.\nThat gives you the same economic exposure as owning the stock but without actual stock ownership and the regulatory reporting requirements that come with ownership.\nThe Death Spiral\nMany of Hwang’s positions were in Chinese highfliers, including RLX Technologies and GSX Techedu. Chinese stocks started to decline due to a combination of the strong dollar and the internal efforts in China to reign in corporate oligarchs and reduce risk-taking by banks.\nThis led to margin calls at Archegos, which caused Hwang to skip a new offering of Viacom-CBS stock in which he was also a large holder. That caused dumping in Viacom-CBS, which led to more margin calls on Archegos: a classic Wall Street death spiral.\nThe big dealers such as Goldman, Morgan Stanley and Credit Suisse began closing out leveraged positions in Archegos at fire sales prices. The dealers lost billions of dollars, and Archegos lost even more as its cash and positions disappeared, and dealers made demands for balances due.\nAll of this was a walk down memory lane for me.\nA Near Disaster\nI was on the front lines of the Long-Term Capital Management (LTCM) bailout in 1998. I negotiated the $4 billion rescue by 14 Wall Street banks, prompted by the Federal Reserve Bank of New York.\nThe causes of the LTCM meltdown were the same as the Archegos meltdown – too much leverage and not enough transparency. Each bank knew what its individual exposures were, but none of the banks knew what the total risk in the fund was. The banks could see their slice of the risk, but not the big picture.\nNow that the financial meltdown is over, the regulatory crackdown begins. But don’t expect any changes soon. In 1998, there were immediate calls for regulation changes. Regulators wanted to limit leverage and require holders of equity derivative positions to provide transparency exactly as if they held the positions in outright stock form.\nThose regulatory changes never happened in 1998, and I don’t expect them to happen now. Wall Street makes enormous profits by selling derivatives, and hedge funds can make even bigger profits by trading them.\nDon’t Expect Changes\nThe occasional meltdown may appear, but Wall Street still comes out ahead even if an individual hedge fund or family office melts down. Despite the public hearings and calls for regulation, Wall Street controls Washington. And what Wall Street wants, Wall Street gets. That’s not some wild conspiracy theory; it’s just the way things work.\nThe problem for everyday investors is this: What happens when a future meltdown spirals out of control to the point that no rescue is possible, and the entire global system of exchanges and banks begins to collapse?\nThat did not happen in the Archegos case (yet), but it did almost happen in the case of LTCM.\nHow long will banks, investors and hedge funds keep rolling the dice? It appears they’re continuing to roll the dice in other ways since they’re pouring money into stocks when it looks like we’re near a market top…\nYou Don’t Want to Short a Bubble\nCalling a market top or bottom is difficult. Even when you see sure signs of a bubble (they are easy to spot on price charts), there’s no assurance that the bubble won’t continue.\nThe 1999 dot.com bubble was seen for what it was at the time, but investors couldn’t get enough of Pets.com (remember the sock puppet spokesperson?) or Space.com (it’s still around but only after a nasty stock price crash in 2000).\nThe same was true of the Nikkei Stock Index in Japan. As it pushed to 40,000 in late 1989, it was widely viewed as a bubble, but the momentum continued. Finally, it crashed and bottomed at 7,570 in 2009. It only recently made it back to 30,000 after a 30-year recovery.\nYou don’t want to short a bubble because if momentum continues, you can lose a lot of money being right. There’s usually plenty of money to be made on the way down once the bubble bursts. Still, there are certain indicators of a market nearing a top that are more reliable than others.\nOne such indicator is called “distribution” by Wall Street insiders. It refers to a process of insiders and banks dumping stock on unsuspecting retail investors. The retail investors often don’t have access to the best deals, such as IPOs, so they snap up any such Wall Street offerings readily.\nLambs to Slaughter\nLittle do they know that the insiders see the crash coming and are dumping high-priced stocks on the little guy so they can escape the collapse with profits in hand…\nYou’ve probably heard of Robinhood by now. Robinhood is an online trading platform available as a mobile phone app that is favored by many retail investors, especially first-time traders and millennials using government handout checks to place leveraged bets using options.\nRobinHood has announced that their platform will now be available for IPOs, which are among the most prized offerings and often soar in price on the first day of trading.\nBecause of that first-day dynamic, Wall Street generally keeps the IPO allocations for their most favored clients, especially large institutions. If IPOs are now being distributed to small retail accounts, it means that the Wall Street banks don’t expect them to perform particularly well.\nThey just want to get the IPOs done so entrepreneurs can get rich, and the banks can collect fees. If retail investors get burned, well that’s just too bad for them. Distribution is most common near market tops.\nAnd that may be just where we are right now. It’s a good time to reduce your exposure to equities and increase your cash holdings.\nThere will be plenty of opportunities to profit on the way down.\nAgain, I’m not definitively calling a market top right now. But it’s better to get out a little too early than a little too late.","source":"lsy1615905701595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Archegos: Snowflake That Triggers the Avalanche?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nArchegos: Snowflake That Triggers the Avalanche?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-07 12:05 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/>Daily Reckoning</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nArchegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund ...\n\n<a href=\"https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1144215470","content_text":"Archegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund trader. Family offices can be conservative in their investment approach, but they can also be as highly leveraged and as risky as any hedge fund, or even more so. It’s up to the person managing the family office.\nIn Hwang’s case, the money was mostly his own, so he ran his family office the way he used to run his hedge fund – with high leverage and almost no transparency. Hwang made huge bets in stocks, often buying as much as 10% of a company.\nHe avoided legal reporting requirements on positions of 5% or more because they were mostly held through complicated financial instruments called derivatives. Instead of actually owning the stock (which would require reporting), he bought equity swaps from big banks.\nThat gives you the same economic exposure as owning the stock but without actual stock ownership and the regulatory reporting requirements that come with ownership.\nThe Death Spiral\nMany of Hwang’s positions were in Chinese highfliers, including RLX Technologies and GSX Techedu. Chinese stocks started to decline due to a combination of the strong dollar and the internal efforts in China to reign in corporate oligarchs and reduce risk-taking by banks.\nThis led to margin calls at Archegos, which caused Hwang to skip a new offering of Viacom-CBS stock in which he was also a large holder. That caused dumping in Viacom-CBS, which led to more margin calls on Archegos: a classic Wall Street death spiral.\nThe big dealers such as Goldman, Morgan Stanley and Credit Suisse began closing out leveraged positions in Archegos at fire sales prices. The dealers lost billions of dollars, and Archegos lost even more as its cash and positions disappeared, and dealers made demands for balances due.\nAll of this was a walk down memory lane for me.\nA Near Disaster\nI was on the front lines of the Long-Term Capital Management (LTCM) bailout in 1998. I negotiated the $4 billion rescue by 14 Wall Street banks, prompted by the Federal Reserve Bank of New York.\nThe causes of the LTCM meltdown were the same as the Archegos meltdown – too much leverage and not enough transparency. Each bank knew what its individual exposures were, but none of the banks knew what the total risk in the fund was. The banks could see their slice of the risk, but not the big picture.\nNow that the financial meltdown is over, the regulatory crackdown begins. But don’t expect any changes soon. In 1998, there were immediate calls for regulation changes. Regulators wanted to limit leverage and require holders of equity derivative positions to provide transparency exactly as if they held the positions in outright stock form.\nThose regulatory changes never happened in 1998, and I don’t expect them to happen now. Wall Street makes enormous profits by selling derivatives, and hedge funds can make even bigger profits by trading them.\nDon’t Expect Changes\nThe occasional meltdown may appear, but Wall Street still comes out ahead even if an individual hedge fund or family office melts down. Despite the public hearings and calls for regulation, Wall Street controls Washington. And what Wall Street wants, Wall Street gets. That’s not some wild conspiracy theory; it’s just the way things work.\nThe problem for everyday investors is this: What happens when a future meltdown spirals out of control to the point that no rescue is possible, and the entire global system of exchanges and banks begins to collapse?\nThat did not happen in the Archegos case (yet), but it did almost happen in the case of LTCM.\nHow long will banks, investors and hedge funds keep rolling the dice? It appears they’re continuing to roll the dice in other ways since they’re pouring money into stocks when it looks like we’re near a market top…\nYou Don’t Want to Short a Bubble\nCalling a market top or bottom is difficult. Even when you see sure signs of a bubble (they are easy to spot on price charts), there’s no assurance that the bubble won’t continue.\nThe 1999 dot.com bubble was seen for what it was at the time, but investors couldn’t get enough of Pets.com (remember the sock puppet spokesperson?) or Space.com (it’s still around but only after a nasty stock price crash in 2000).\nThe same was true of the Nikkei Stock Index in Japan. As it pushed to 40,000 in late 1989, it was widely viewed as a bubble, but the momentum continued. Finally, it crashed and bottomed at 7,570 in 2009. It only recently made it back to 30,000 after a 30-year recovery.\nYou don’t want to short a bubble because if momentum continues, you can lose a lot of money being right. There’s usually plenty of money to be made on the way down once the bubble bursts. Still, there are certain indicators of a market nearing a top that are more reliable than others.\nOne such indicator is called “distribution” by Wall Street insiders. It refers to a process of insiders and banks dumping stock on unsuspecting retail investors. The retail investors often don’t have access to the best deals, such as IPOs, so they snap up any such Wall Street offerings readily.\nLambs to Slaughter\nLittle do they know that the insiders see the crash coming and are dumping high-priced stocks on the little guy so they can escape the collapse with profits in hand…\nYou’ve probably heard of Robinhood by now. Robinhood is an online trading platform available as a mobile phone app that is favored by many retail investors, especially first-time traders and millennials using government handout checks to place leveraged bets using options.\nRobinHood has announced that their platform will now be available for IPOs, which are among the most prized offerings and often soar in price on the first day of trading.\nBecause of that first-day dynamic, Wall Street generally keeps the IPO allocations for their most favored clients, especially large institutions. If IPOs are now being distributed to small retail accounts, it means that the Wall Street banks don’t expect them to perform particularly well.\nThey just want to get the IPOs done so entrepreneurs can get rich, and the banks can collect fees. If retail investors get burned, well that’s just too bad for them. Distribution is most common near market tops.\nAnd that may be just where we are right now. It’s a good time to reduce your exposure to equities and increase your cash holdings.\nThere will be plenty of opportunities to profit on the way down.\nAgain, I’m not definitively calling a market top right now. But it’s better to get out a little too early than a little too late.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":341916796,"gmtCreate":1617770182415,"gmtModify":1704702904383,"author":{"id":"3559463359065359","authorId":"3559463359065359","name":"ArkInvest","avatar":"https://static.tigerbbs.com/6dfcf7df27430673110d69ba1374e540","vip":1,"crmLevel":2,"crmLevelSwitch":0,"idStr":"3559463359065359","authorIdStr":"3559463359065359"},"htmlText":"killed my rlx","listText":"killed my rlx","text":"killed my rlx","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/341916796","repostId":1144215470,"repostType":4,"repost":{"id":"1144215470","kind":"news","pubTimestamp":1617768314,"share":"https://ttm.financial/m/news/1144215470?lang=&edition=fundamental","pubTime":"2021-04-07 12:05","market":"us","language":"en","title":"Archegos: Snowflake That Triggers the Avalanche?","url":"https://stock-news.laohu8.com/highlight/detail?id=1144215470","media":"Daily Reckoning","summary":"Archegos was not a household name until about two weeks ago when it made headlines all over the worl","content":"Archegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund trader. Family offices can be conservative in their investment approach, but they can also be as highly leveraged and as risky as any hedge fund, or even more so. It’s up to the person managing the family office.\nIn Hwang’s case, the money was mostly his own, so he ran his family office the way he used to run his hedge fund – with high leverage and almost no transparency. Hwang made huge bets in stocks, often buying as much as 10% of a company.\nHe avoided legal reporting requirements on positions of 5% or more because they were mostly held through complicated financial instruments called derivatives. Instead of actually owning the stock (which would require reporting), he bought equity swaps from big banks.\nThat gives you the same economic exposure as owning the stock but without actual stock ownership and the regulatory reporting requirements that come with ownership.\nThe Death Spiral\nMany of Hwang’s positions were in Chinese highfliers, including RLX Technologies and GSX Techedu. Chinese stocks started to decline due to a combination of the strong dollar and the internal efforts in China to reign in corporate oligarchs and reduce risk-taking by banks.\nThis led to margin calls at Archegos, which caused Hwang to skip a new offering of Viacom-CBS stock in which he was also a large holder. That caused dumping in Viacom-CBS, which led to more margin calls on Archegos: a classic Wall Street death spiral.\nThe big dealers such as Goldman, Morgan Stanley and Credit Suisse began closing out leveraged positions in Archegos at fire sales prices. The dealers lost billions of dollars, and Archegos lost even more as its cash and positions disappeared, and dealers made demands for balances due.\nAll of this was a walk down memory lane for me.\nA Near Disaster\nI was on the front lines of the Long-Term Capital Management (LTCM) bailout in 1998. I negotiated the $4 billion rescue by 14 Wall Street banks, prompted by the Federal Reserve Bank of New York.\nThe causes of the LTCM meltdown were the same as the Archegos meltdown – too much leverage and not enough transparency. Each bank knew what its individual exposures were, but none of the banks knew what the total risk in the fund was. The banks could see their slice of the risk, but not the big picture.\nNow that the financial meltdown is over, the regulatory crackdown begins. But don’t expect any changes soon. In 1998, there were immediate calls for regulation changes. Regulators wanted to limit leverage and require holders of equity derivative positions to provide transparency exactly as if they held the positions in outright stock form.\nThose regulatory changes never happened in 1998, and I don’t expect them to happen now. Wall Street makes enormous profits by selling derivatives, and hedge funds can make even bigger profits by trading them.\nDon’t Expect Changes\nThe occasional meltdown may appear, but Wall Street still comes out ahead even if an individual hedge fund or family office melts down. Despite the public hearings and calls for regulation, Wall Street controls Washington. And what Wall Street wants, Wall Street gets. That’s not some wild conspiracy theory; it’s just the way things work.\nThe problem for everyday investors is this: What happens when a future meltdown spirals out of control to the point that no rescue is possible, and the entire global system of exchanges and banks begins to collapse?\nThat did not happen in the Archegos case (yet), but it did almost happen in the case of LTCM.\nHow long will banks, investors and hedge funds keep rolling the dice? It appears they’re continuing to roll the dice in other ways since they’re pouring money into stocks when it looks like we’re near a market top…\nYou Don’t Want to Short a Bubble\nCalling a market top or bottom is difficult. Even when you see sure signs of a bubble (they are easy to spot on price charts), there’s no assurance that the bubble won’t continue.\nThe 1999 dot.com bubble was seen for what it was at the time, but investors couldn’t get enough of Pets.com (remember the sock puppet spokesperson?) or Space.com (it’s still around but only after a nasty stock price crash in 2000).\nThe same was true of the Nikkei Stock Index in Japan. As it pushed to 40,000 in late 1989, it was widely viewed as a bubble, but the momentum continued. Finally, it crashed and bottomed at 7,570 in 2009. It only recently made it back to 30,000 after a 30-year recovery.\nYou don’t want to short a bubble because if momentum continues, you can lose a lot of money being right. There’s usually plenty of money to be made on the way down once the bubble bursts. Still, there are certain indicators of a market nearing a top that are more reliable than others.\nOne such indicator is called “distribution” by Wall Street insiders. It refers to a process of insiders and banks dumping stock on unsuspecting retail investors. The retail investors often don’t have access to the best deals, such as IPOs, so they snap up any such Wall Street offerings readily.\nLambs to Slaughter\nLittle do they know that the insiders see the crash coming and are dumping high-priced stocks on the little guy so they can escape the collapse with profits in hand…\nYou’ve probably heard of Robinhood by now. Robinhood is an online trading platform available as a mobile phone app that is favored by many retail investors, especially first-time traders and millennials using government handout checks to place leveraged bets using options.\nRobinHood has announced that their platform will now be available for IPOs, which are among the most prized offerings and often soar in price on the first day of trading.\nBecause of that first-day dynamic, Wall Street generally keeps the IPO allocations for their most favored clients, especially large institutions. If IPOs are now being distributed to small retail accounts, it means that the Wall Street banks don’t expect them to perform particularly well.\nThey just want to get the IPOs done so entrepreneurs can get rich, and the banks can collect fees. If retail investors get burned, well that’s just too bad for them. Distribution is most common near market tops.\nAnd that may be just where we are right now. It’s a good time to reduce your exposure to equities and increase your cash holdings.\nThere will be plenty of opportunities to profit on the way down.\nAgain, I’m not definitively calling a market top right now. But it’s better to get out a little too early than a little too late.","source":"lsy1615905701595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Archegos: Snowflake That Triggers the Avalanche?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nArchegos: Snowflake That Triggers the Avalanche?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-07 12:05 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/>Daily Reckoning</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nArchegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund ...\n\n<a href=\"https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1144215470","content_text":"Archegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund trader. Family offices can be conservative in their investment approach, but they can also be as highly leveraged and as risky as any hedge fund, or even more so. It’s up to the person managing the family office.\nIn Hwang’s case, the money was mostly his own, so he ran his family office the way he used to run his hedge fund – with high leverage and almost no transparency. Hwang made huge bets in stocks, often buying as much as 10% of a company.\nHe avoided legal reporting requirements on positions of 5% or more because they were mostly held through complicated financial instruments called derivatives. Instead of actually owning the stock (which would require reporting), he bought equity swaps from big banks.\nThat gives you the same economic exposure as owning the stock but without actual stock ownership and the regulatory reporting requirements that come with ownership.\nThe Death Spiral\nMany of Hwang’s positions were in Chinese highfliers, including RLX Technologies and GSX Techedu. Chinese stocks started to decline due to a combination of the strong dollar and the internal efforts in China to reign in corporate oligarchs and reduce risk-taking by banks.\nThis led to margin calls at Archegos, which caused Hwang to skip a new offering of Viacom-CBS stock in which he was also a large holder. That caused dumping in Viacom-CBS, which led to more margin calls on Archegos: a classic Wall Street death spiral.\nThe big dealers such as Goldman, Morgan Stanley and Credit Suisse began closing out leveraged positions in Archegos at fire sales prices. The dealers lost billions of dollars, and Archegos lost even more as its cash and positions disappeared, and dealers made demands for balances due.\nAll of this was a walk down memory lane for me.\nA Near Disaster\nI was on the front lines of the Long-Term Capital Management (LTCM) bailout in 1998. I negotiated the $4 billion rescue by 14 Wall Street banks, prompted by the Federal Reserve Bank of New York.\nThe causes of the LTCM meltdown were the same as the Archegos meltdown – too much leverage and not enough transparency. Each bank knew what its individual exposures were, but none of the banks knew what the total risk in the fund was. The banks could see their slice of the risk, but not the big picture.\nNow that the financial meltdown is over, the regulatory crackdown begins. But don’t expect any changes soon. In 1998, there were immediate calls for regulation changes. Regulators wanted to limit leverage and require holders of equity derivative positions to provide transparency exactly as if they held the positions in outright stock form.\nThose regulatory changes never happened in 1998, and I don’t expect them to happen now. Wall Street makes enormous profits by selling derivatives, and hedge funds can make even bigger profits by trading them.\nDon’t Expect Changes\nThe occasional meltdown may appear, but Wall Street still comes out ahead even if an individual hedge fund or family office melts down. Despite the public hearings and calls for regulation, Wall Street controls Washington. And what Wall Street wants, Wall Street gets. That’s not some wild conspiracy theory; it’s just the way things work.\nThe problem for everyday investors is this: What happens when a future meltdown spirals out of control to the point that no rescue is possible, and the entire global system of exchanges and banks begins to collapse?\nThat did not happen in the Archegos case (yet), but it did almost happen in the case of LTCM.\nHow long will banks, investors and hedge funds keep rolling the dice? It appears they’re continuing to roll the dice in other ways since they’re pouring money into stocks when it looks like we’re near a market top…\nYou Don’t Want to Short a Bubble\nCalling a market top or bottom is difficult. Even when you see sure signs of a bubble (they are easy to spot on price charts), there’s no assurance that the bubble won’t continue.\nThe 1999 dot.com bubble was seen for what it was at the time, but investors couldn’t get enough of Pets.com (remember the sock puppet spokesperson?) or Space.com (it’s still around but only after a nasty stock price crash in 2000).\nThe same was true of the Nikkei Stock Index in Japan. As it pushed to 40,000 in late 1989, it was widely viewed as a bubble, but the momentum continued. Finally, it crashed and bottomed at 7,570 in 2009. It only recently made it back to 30,000 after a 30-year recovery.\nYou don’t want to short a bubble because if momentum continues, you can lose a lot of money being right. There’s usually plenty of money to be made on the way down once the bubble bursts. Still, there are certain indicators of a market nearing a top that are more reliable than others.\nOne such indicator is called “distribution” by Wall Street insiders. It refers to a process of insiders and banks dumping stock on unsuspecting retail investors. The retail investors often don’t have access to the best deals, such as IPOs, so they snap up any such Wall Street offerings readily.\nLambs to Slaughter\nLittle do they know that the insiders see the crash coming and are dumping high-priced stocks on the little guy so they can escape the collapse with profits in hand…\nYou’ve probably heard of Robinhood by now. Robinhood is an online trading platform available as a mobile phone app that is favored by many retail investors, especially first-time traders and millennials using government handout checks to place leveraged bets using options.\nRobinHood has announced that their platform will now be available for IPOs, which are among the most prized offerings and often soar in price on the first day of trading.\nBecause of that first-day dynamic, Wall Street generally keeps the IPO allocations for their most favored clients, especially large institutions. If IPOs are now being distributed to small retail accounts, it means that the Wall Street banks don’t expect them to perform particularly well.\nThey just want to get the IPOs done so entrepreneurs can get rich, and the banks can collect fees. If retail investors get burned, well that’s just too bad for them. Distribution is most common near market tops.\nAnd that may be just where we are right now. It’s a good time to reduce your exposure to equities and increase your cash holdings.\nThere will be plenty of opportunities to profit on the way down.\nAgain, I’m not definitively calling a market top right now. But it’s better to get out a little too early than a little too late.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":341911249,"gmtCreate":1617770001981,"gmtModify":1704702901296,"author":{"id":"3574937002842984","authorId":"3574937002842984","name":"rachelicing","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":4,"crmLevelSwitch":0,"idStr":"3574937002842984","authorIdStr":"3574937002842984"},"htmlText":"Interesting&nbsp;","listText":"Interesting&nbsp;","text":"Interesting","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/341911249","repostId":1144215470,"repostType":4,"repost":{"id":"1144215470","kind":"news","pubTimestamp":1617768314,"share":"https://ttm.financial/m/news/1144215470?lang=&edition=fundamental","pubTime":"2021-04-07 12:05","market":"us","language":"en","title":"Archegos: Snowflake That Triggers the Avalanche?","url":"https://stock-news.laohu8.com/highlight/detail?id=1144215470","media":"Daily Reckoning","summary":"Archegos was not a household name until about two weeks ago when it made headlines all over the worl","content":"Archegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund trader. Family offices can be conservative in their investment approach, but they can also be as highly leveraged and as risky as any hedge fund, or even more so. It’s up to the person managing the family office.\nIn Hwang’s case, the money was mostly his own, so he ran his family office the way he used to run his hedge fund – with high leverage and almost no transparency. Hwang made huge bets in stocks, often buying as much as 10% of a company.\nHe avoided legal reporting requirements on positions of 5% or more because they were mostly held through complicated financial instruments called derivatives. Instead of actually owning the stock (which would require reporting), he bought equity swaps from big banks.\nThat gives you the same economic exposure as owning the stock but without actual stock ownership and the regulatory reporting requirements that come with ownership.\nThe Death Spiral\nMany of Hwang’s positions were in Chinese highfliers, including RLX Technologies and GSX Techedu. Chinese stocks started to decline due to a combination of the strong dollar and the internal efforts in China to reign in corporate oligarchs and reduce risk-taking by banks.\nThis led to margin calls at Archegos, which caused Hwang to skip a new offering of Viacom-CBS stock in which he was also a large holder. That caused dumping in Viacom-CBS, which led to more margin calls on Archegos: a classic Wall Street death spiral.\nThe big dealers such as Goldman, Morgan Stanley and Credit Suisse began closing out leveraged positions in Archegos at fire sales prices. The dealers lost billions of dollars, and Archegos lost even more as its cash and positions disappeared, and dealers made demands for balances due.\nAll of this was a walk down memory lane for me.\nA Near Disaster\nI was on the front lines of the Long-Term Capital Management (LTCM) bailout in 1998. I negotiated the $4 billion rescue by 14 Wall Street banks, prompted by the Federal Reserve Bank of New York.\nThe causes of the LTCM meltdown were the same as the Archegos meltdown – too much leverage and not enough transparency. Each bank knew what its individual exposures were, but none of the banks knew what the total risk in the fund was. The banks could see their slice of the risk, but not the big picture.\nNow that the financial meltdown is over, the regulatory crackdown begins. But don’t expect any changes soon. In 1998, there were immediate calls for regulation changes. Regulators wanted to limit leverage and require holders of equity derivative positions to provide transparency exactly as if they held the positions in outright stock form.\nThose regulatory changes never happened in 1998, and I don’t expect them to happen now. Wall Street makes enormous profits by selling derivatives, and hedge funds can make even bigger profits by trading them.\nDon’t Expect Changes\nThe occasional meltdown may appear, but Wall Street still comes out ahead even if an individual hedge fund or family office melts down. Despite the public hearings and calls for regulation, Wall Street controls Washington. And what Wall Street wants, Wall Street gets. That’s not some wild conspiracy theory; it’s just the way things work.\nThe problem for everyday investors is this: What happens when a future meltdown spirals out of control to the point that no rescue is possible, and the entire global system of exchanges and banks begins to collapse?\nThat did not happen in the Archegos case (yet), but it did almost happen in the case of LTCM.\nHow long will banks, investors and hedge funds keep rolling the dice? It appears they’re continuing to roll the dice in other ways since they’re pouring money into stocks when it looks like we’re near a market top…\nYou Don’t Want to Short a Bubble\nCalling a market top or bottom is difficult. Even when you see sure signs of a bubble (they are easy to spot on price charts), there’s no assurance that the bubble won’t continue.\nThe 1999 dot.com bubble was seen for what it was at the time, but investors couldn’t get enough of Pets.com (remember the sock puppet spokesperson?) or Space.com (it’s still around but only after a nasty stock price crash in 2000).\nThe same was true of the Nikkei Stock Index in Japan. As it pushed to 40,000 in late 1989, it was widely viewed as a bubble, but the momentum continued. Finally, it crashed and bottomed at 7,570 in 2009. It only recently made it back to 30,000 after a 30-year recovery.\nYou don’t want to short a bubble because if momentum continues, you can lose a lot of money being right. There’s usually plenty of money to be made on the way down once the bubble bursts. Still, there are certain indicators of a market nearing a top that are more reliable than others.\nOne such indicator is called “distribution” by Wall Street insiders. It refers to a process of insiders and banks dumping stock on unsuspecting retail investors. The retail investors often don’t have access to the best deals, such as IPOs, so they snap up any such Wall Street offerings readily.\nLambs to Slaughter\nLittle do they know that the insiders see the crash coming and are dumping high-priced stocks on the little guy so they can escape the collapse with profits in hand…\nYou’ve probably heard of Robinhood by now. Robinhood is an online trading platform available as a mobile phone app that is favored by many retail investors, especially first-time traders and millennials using government handout checks to place leveraged bets using options.\nRobinHood has announced that their platform will now be available for IPOs, which are among the most prized offerings and often soar in price on the first day of trading.\nBecause of that first-day dynamic, Wall Street generally keeps the IPO allocations for their most favored clients, especially large institutions. If IPOs are now being distributed to small retail accounts, it means that the Wall Street banks don’t expect them to perform particularly well.\nThey just want to get the IPOs done so entrepreneurs can get rich, and the banks can collect fees. If retail investors get burned, well that’s just too bad for them. Distribution is most common near market tops.\nAnd that may be just where we are right now. It’s a good time to reduce your exposure to equities and increase your cash holdings.\nThere will be plenty of opportunities to profit on the way down.\nAgain, I’m not definitively calling a market top right now. But it’s better to get out a little too early than a little too late.","source":"lsy1615905701595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Archegos: Snowflake That Triggers the Avalanche?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nArchegos: Snowflake That Triggers the Avalanche?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-07 12:05 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/>Daily Reckoning</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nArchegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund ...\n\n<a href=\"https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1144215470","content_text":"Archegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund trader. Family offices can be conservative in their investment approach, but they can also be as highly leveraged and as risky as any hedge fund, or even more so. It’s up to the person managing the family office.\nIn Hwang’s case, the money was mostly his own, so he ran his family office the way he used to run his hedge fund – with high leverage and almost no transparency. Hwang made huge bets in stocks, often buying as much as 10% of a company.\nHe avoided legal reporting requirements on positions of 5% or more because they were mostly held through complicated financial instruments called derivatives. Instead of actually owning the stock (which would require reporting), he bought equity swaps from big banks.\nThat gives you the same economic exposure as owning the stock but without actual stock ownership and the regulatory reporting requirements that come with ownership.\nThe Death Spiral\nMany of Hwang’s positions were in Chinese highfliers, including RLX Technologies and GSX Techedu. Chinese stocks started to decline due to a combination of the strong dollar and the internal efforts in China to reign in corporate oligarchs and reduce risk-taking by banks.\nThis led to margin calls at Archegos, which caused Hwang to skip a new offering of Viacom-CBS stock in which he was also a large holder. That caused dumping in Viacom-CBS, which led to more margin calls on Archegos: a classic Wall Street death spiral.\nThe big dealers such as Goldman, Morgan Stanley and Credit Suisse began closing out leveraged positions in Archegos at fire sales prices. The dealers lost billions of dollars, and Archegos lost even more as its cash and positions disappeared, and dealers made demands for balances due.\nAll of this was a walk down memory lane for me.\nA Near Disaster\nI was on the front lines of the Long-Term Capital Management (LTCM) bailout in 1998. I negotiated the $4 billion rescue by 14 Wall Street banks, prompted by the Federal Reserve Bank of New York.\nThe causes of the LTCM meltdown were the same as the Archegos meltdown – too much leverage and not enough transparency. Each bank knew what its individual exposures were, but none of the banks knew what the total risk in the fund was. The banks could see their slice of the risk, but not the big picture.\nNow that the financial meltdown is over, the regulatory crackdown begins. But don’t expect any changes soon. In 1998, there were immediate calls for regulation changes. Regulators wanted to limit leverage and require holders of equity derivative positions to provide transparency exactly as if they held the positions in outright stock form.\nThose regulatory changes never happened in 1998, and I don’t expect them to happen now. Wall Street makes enormous profits by selling derivatives, and hedge funds can make even bigger profits by trading them.\nDon’t Expect Changes\nThe occasional meltdown may appear, but Wall Street still comes out ahead even if an individual hedge fund or family office melts down. Despite the public hearings and calls for regulation, Wall Street controls Washington. And what Wall Street wants, Wall Street gets. That’s not some wild conspiracy theory; it’s just the way things work.\nThe problem for everyday investors is this: What happens when a future meltdown spirals out of control to the point that no rescue is possible, and the entire global system of exchanges and banks begins to collapse?\nThat did not happen in the Archegos case (yet), but it did almost happen in the case of LTCM.\nHow long will banks, investors and hedge funds keep rolling the dice? It appears they’re continuing to roll the dice in other ways since they’re pouring money into stocks when it looks like we’re near a market top…\nYou Don’t Want to Short a Bubble\nCalling a market top or bottom is difficult. Even when you see sure signs of a bubble (they are easy to spot on price charts), there’s no assurance that the bubble won’t continue.\nThe 1999 dot.com bubble was seen for what it was at the time, but investors couldn’t get enough of Pets.com (remember the sock puppet spokesperson?) or Space.com (it’s still around but only after a nasty stock price crash in 2000).\nThe same was true of the Nikkei Stock Index in Japan. As it pushed to 40,000 in late 1989, it was widely viewed as a bubble, but the momentum continued. Finally, it crashed and bottomed at 7,570 in 2009. It only recently made it back to 30,000 after a 30-year recovery.\nYou don’t want to short a bubble because if momentum continues, you can lose a lot of money being right. There’s usually plenty of money to be made on the way down once the bubble bursts. Still, there are certain indicators of a market nearing a top that are more reliable than others.\nOne such indicator is called “distribution” by Wall Street insiders. It refers to a process of insiders and banks dumping stock on unsuspecting retail investors. The retail investors often don’t have access to the best deals, such as IPOs, so they snap up any such Wall Street offerings readily.\nLambs to Slaughter\nLittle do they know that the insiders see the crash coming and are dumping high-priced stocks on the little guy so they can escape the collapse with profits in hand…\nYou’ve probably heard of Robinhood by now. Robinhood is an online trading platform available as a mobile phone app that is favored by many retail investors, especially first-time traders and millennials using government handout checks to place leveraged bets using options.\nRobinHood has announced that their platform will now be available for IPOs, which are among the most prized offerings and often soar in price on the first day of trading.\nBecause of that first-day dynamic, Wall Street generally keeps the IPO allocations for their most favored clients, especially large institutions. If IPOs are now being distributed to small retail accounts, it means that the Wall Street banks don’t expect them to perform particularly well.\nThey just want to get the IPOs done so entrepreneurs can get rich, and the banks can collect fees. If retail investors get burned, well that’s just too bad for them. Distribution is most common near market tops.\nAnd that may be just where we are right now. It’s a good time to reduce your exposure to equities and increase your cash holdings.\nThere will be plenty of opportunities to profit on the way down.\nAgain, I’m not definitively calling a market top right now. But it’s better to get out a little too early than a little too late.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":341931744,"gmtCreate":1617769106388,"gmtModify":1704702887446,"author":{"id":"3570343633899015","authorId":"3570343633899015","name":"xiaochan","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":3,"crmLevelSwitch":0,"idStr":"3570343633899015","authorIdStr":"3570343633899015"},"htmlText":"Nope!","listText":"Nope!","text":"Nope!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":2,"repostSize":0,"link":"https://ttm.financial/post/341931744","repostId":1144215470,"repostType":4,"repost":{"id":"1144215470","kind":"news","pubTimestamp":1617768314,"share":"https://ttm.financial/m/news/1144215470?lang=&edition=fundamental","pubTime":"2021-04-07 12:05","market":"us","language":"en","title":"Archegos: Snowflake That Triggers the Avalanche?","url":"https://stock-news.laohu8.com/highlight/detail?id=1144215470","media":"Daily Reckoning","summary":"Archegos was not a household name until about two weeks ago when it made headlines all over the worl","content":"Archegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund trader. Family offices can be conservative in their investment approach, but they can also be as highly leveraged and as risky as any hedge fund, or even more so. It’s up to the person managing the family office.\nIn Hwang’s case, the money was mostly his own, so he ran his family office the way he used to run his hedge fund – with high leverage and almost no transparency. Hwang made huge bets in stocks, often buying as much as 10% of a company.\nHe avoided legal reporting requirements on positions of 5% or more because they were mostly held through complicated financial instruments called derivatives. Instead of actually owning the stock (which would require reporting), he bought equity swaps from big banks.\nThat gives you the same economic exposure as owning the stock but without actual stock ownership and the regulatory reporting requirements that come with ownership.\nThe Death Spiral\nMany of Hwang’s positions were in Chinese highfliers, including RLX Technologies and GSX Techedu. Chinese stocks started to decline due to a combination of the strong dollar and the internal efforts in China to reign in corporate oligarchs and reduce risk-taking by banks.\nThis led to margin calls at Archegos, which caused Hwang to skip a new offering of Viacom-CBS stock in which he was also a large holder. That caused dumping in Viacom-CBS, which led to more margin calls on Archegos: a classic Wall Street death spiral.\nThe big dealers such as Goldman, Morgan Stanley and Credit Suisse began closing out leveraged positions in Archegos at fire sales prices. The dealers lost billions of dollars, and Archegos lost even more as its cash and positions disappeared, and dealers made demands for balances due.\nAll of this was a walk down memory lane for me.\nA Near Disaster\nI was on the front lines of the Long-Term Capital Management (LTCM) bailout in 1998. I negotiated the $4 billion rescue by 14 Wall Street banks, prompted by the Federal Reserve Bank of New York.\nThe causes of the LTCM meltdown were the same as the Archegos meltdown – too much leverage and not enough transparency. Each bank knew what its individual exposures were, but none of the banks knew what the total risk in the fund was. The banks could see their slice of the risk, but not the big picture.\nNow that the financial meltdown is over, the regulatory crackdown begins. But don’t expect any changes soon. In 1998, there were immediate calls for regulation changes. Regulators wanted to limit leverage and require holders of equity derivative positions to provide transparency exactly as if they held the positions in outright stock form.\nThose regulatory changes never happened in 1998, and I don’t expect them to happen now. Wall Street makes enormous profits by selling derivatives, and hedge funds can make even bigger profits by trading them.\nDon’t Expect Changes\nThe occasional meltdown may appear, but Wall Street still comes out ahead even if an individual hedge fund or family office melts down. Despite the public hearings and calls for regulation, Wall Street controls Washington. And what Wall Street wants, Wall Street gets. That’s not some wild conspiracy theory; it’s just the way things work.\nThe problem for everyday investors is this: What happens when a future meltdown spirals out of control to the point that no rescue is possible, and the entire global system of exchanges and banks begins to collapse?\nThat did not happen in the Archegos case (yet), but it did almost happen in the case of LTCM.\nHow long will banks, investors and hedge funds keep rolling the dice? It appears they’re continuing to roll the dice in other ways since they’re pouring money into stocks when it looks like we’re near a market top…\nYou Don’t Want to Short a Bubble\nCalling a market top or bottom is difficult. Even when you see sure signs of a bubble (they are easy to spot on price charts), there’s no assurance that the bubble won’t continue.\nThe 1999 dot.com bubble was seen for what it was at the time, but investors couldn’t get enough of Pets.com (remember the sock puppet spokesperson?) or Space.com (it’s still around but only after a nasty stock price crash in 2000).\nThe same was true of the Nikkei Stock Index in Japan. As it pushed to 40,000 in late 1989, it was widely viewed as a bubble, but the momentum continued. Finally, it crashed and bottomed at 7,570 in 2009. It only recently made it back to 30,000 after a 30-year recovery.\nYou don’t want to short a bubble because if momentum continues, you can lose a lot of money being right. There’s usually plenty of money to be made on the way down once the bubble bursts. Still, there are certain indicators of a market nearing a top that are more reliable than others.\nOne such indicator is called “distribution” by Wall Street insiders. It refers to a process of insiders and banks dumping stock on unsuspecting retail investors. The retail investors often don’t have access to the best deals, such as IPOs, so they snap up any such Wall Street offerings readily.\nLambs to Slaughter\nLittle do they know that the insiders see the crash coming and are dumping high-priced stocks on the little guy so they can escape the collapse with profits in hand…\nYou’ve probably heard of Robinhood by now. Robinhood is an online trading platform available as a mobile phone app that is favored by many retail investors, especially first-time traders and millennials using government handout checks to place leveraged bets using options.\nRobinHood has announced that their platform will now be available for IPOs, which are among the most prized offerings and often soar in price on the first day of trading.\nBecause of that first-day dynamic, Wall Street generally keeps the IPO allocations for their most favored clients, especially large institutions. If IPOs are now being distributed to small retail accounts, it means that the Wall Street banks don’t expect them to perform particularly well.\nThey just want to get the IPOs done so entrepreneurs can get rich, and the banks can collect fees. If retail investors get burned, well that’s just too bad for them. Distribution is most common near market tops.\nAnd that may be just where we are right now. It’s a good time to reduce your exposure to equities and increase your cash holdings.\nThere will be plenty of opportunities to profit on the way down.\nAgain, I’m not definitively calling a market top right now. But it’s better to get out a little too early than a little too late.","source":"lsy1615905701595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Archegos: Snowflake That Triggers the Avalanche?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nArchegos: Snowflake That Triggers the Avalanche?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-07 12:05 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/>Daily Reckoning</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nArchegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund ...\n\n<a href=\"https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1144215470","content_text":"Archegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund trader. Family offices can be conservative in their investment approach, but they can also be as highly leveraged and as risky as any hedge fund, or even more so. It’s up to the person managing the family office.\nIn Hwang’s case, the money was mostly his own, so he ran his family office the way he used to run his hedge fund – with high leverage and almost no transparency. Hwang made huge bets in stocks, often buying as much as 10% of a company.\nHe avoided legal reporting requirements on positions of 5% or more because they were mostly held through complicated financial instruments called derivatives. Instead of actually owning the stock (which would require reporting), he bought equity swaps from big banks.\nThat gives you the same economic exposure as owning the stock but without actual stock ownership and the regulatory reporting requirements that come with ownership.\nThe Death Spiral\nMany of Hwang’s positions were in Chinese highfliers, including RLX Technologies and GSX Techedu. Chinese stocks started to decline due to a combination of the strong dollar and the internal efforts in China to reign in corporate oligarchs and reduce risk-taking by banks.\nThis led to margin calls at Archegos, which caused Hwang to skip a new offering of Viacom-CBS stock in which he was also a large holder. That caused dumping in Viacom-CBS, which led to more margin calls on Archegos: a classic Wall Street death spiral.\nThe big dealers such as Goldman, Morgan Stanley and Credit Suisse began closing out leveraged positions in Archegos at fire sales prices. The dealers lost billions of dollars, and Archegos lost even more as its cash and positions disappeared, and dealers made demands for balances due.\nAll of this was a walk down memory lane for me.\nA Near Disaster\nI was on the front lines of the Long-Term Capital Management (LTCM) bailout in 1998. I negotiated the $4 billion rescue by 14 Wall Street banks, prompted by the Federal Reserve Bank of New York.\nThe causes of the LTCM meltdown were the same as the Archegos meltdown – too much leverage and not enough transparency. Each bank knew what its individual exposures were, but none of the banks knew what the total risk in the fund was. The banks could see their slice of the risk, but not the big picture.\nNow that the financial meltdown is over, the regulatory crackdown begins. But don’t expect any changes soon. In 1998, there were immediate calls for regulation changes. Regulators wanted to limit leverage and require holders of equity derivative positions to provide transparency exactly as if they held the positions in outright stock form.\nThose regulatory changes never happened in 1998, and I don’t expect them to happen now. Wall Street makes enormous profits by selling derivatives, and hedge funds can make even bigger profits by trading them.\nDon’t Expect Changes\nThe occasional meltdown may appear, but Wall Street still comes out ahead even if an individual hedge fund or family office melts down. Despite the public hearings and calls for regulation, Wall Street controls Washington. And what Wall Street wants, Wall Street gets. That’s not some wild conspiracy theory; it’s just the way things work.\nThe problem for everyday investors is this: What happens when a future meltdown spirals out of control to the point that no rescue is possible, and the entire global system of exchanges and banks begins to collapse?\nThat did not happen in the Archegos case (yet), but it did almost happen in the case of LTCM.\nHow long will banks, investors and hedge funds keep rolling the dice? It appears they’re continuing to roll the dice in other ways since they’re pouring money into stocks when it looks like we’re near a market top…\nYou Don’t Want to Short a Bubble\nCalling a market top or bottom is difficult. Even when you see sure signs of a bubble (they are easy to spot on price charts), there’s no assurance that the bubble won’t continue.\nThe 1999 dot.com bubble was seen for what it was at the time, but investors couldn’t get enough of Pets.com (remember the sock puppet spokesperson?) or Space.com (it’s still around but only after a nasty stock price crash in 2000).\nThe same was true of the Nikkei Stock Index in Japan. As it pushed to 40,000 in late 1989, it was widely viewed as a bubble, but the momentum continued. Finally, it crashed and bottomed at 7,570 in 2009. It only recently made it back to 30,000 after a 30-year recovery.\nYou don’t want to short a bubble because if momentum continues, you can lose a lot of money being right. There’s usually plenty of money to be made on the way down once the bubble bursts. Still, there are certain indicators of a market nearing a top that are more reliable than others.\nOne such indicator is called “distribution” by Wall Street insiders. It refers to a process of insiders and banks dumping stock on unsuspecting retail investors. The retail investors often don’t have access to the best deals, such as IPOs, so they snap up any such Wall Street offerings readily.\nLambs to Slaughter\nLittle do they know that the insiders see the crash coming and are dumping high-priced stocks on the little guy so they can escape the collapse with profits in hand…\nYou’ve probably heard of Robinhood by now. Robinhood is an online trading platform available as a mobile phone app that is favored by many retail investors, especially first-time traders and millennials using government handout checks to place leveraged bets using options.\nRobinHood has announced that their platform will now be available for IPOs, which are among the most prized offerings and often soar in price on the first day of trading.\nBecause of that first-day dynamic, Wall Street generally keeps the IPO allocations for their most favored clients, especially large institutions. If IPOs are now being distributed to small retail accounts, it means that the Wall Street banks don’t expect them to perform particularly well.\nThey just want to get the IPOs done so entrepreneurs can get rich, and the banks can collect fees. If retail investors get burned, well that’s just too bad for them. Distribution is most common near market tops.\nAnd that may be just where we are right now. It’s a good time to reduce your exposure to equities and increase your cash holdings.\nThere will be plenty of opportunities to profit on the way down.\nAgain, I’m not definitively calling a market top right now. But it’s better to get out a little too early than a little too late.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":3976414,"gmtCreate":1617769458366,"gmtModify":1680783146025,"authorId":3572249185724220,"author":{"id":3572249185724220,"idStr":"3572249185724220","authorId":3572249185724220,"name":"xoxoll","avatar":"https://static.tigerbbs.com/8ed65c2962af2a6fbd414f4d6fe9e378","vip":1,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":341931744,"type":1,"supId":0,"prevId":0,"content":"Help me comment and like ","text":"Help me comment and like ","html":"Help me comment and like "},{"id":3976535,"gmtCreate":1617770196813,"gmtModify":1680783144549,"authorId":3570676891706485,"author":{"id":3570676891706485,"idStr":"3570676891706485","authorId":3570676891706485,"name":"Songy","avatar":"https://community-static.tradeup.com/news/9f6175f06caf65b3067b901953f098bd","vip":1,"currentWearingBadge":{"badgeId":"1026c425416b44e0aac28c11a0848493-2","templateUuid":"1026c425416b44e0aac28c11a0848493","name":"Senior Tiger","description":"Join the tiger community for 1000 days","bigImgUrl":"https://static.tigerbbs.com/0063fb68ea29c9ae6858c58630e182d5","smallImgUrl":"https://static.tigerbbs.com/96c699a93be4214d4b49aea6a5a5d1a4","grayImgUrl":"https://static.tigerbbs.com/35b0e542a9ff77046ed69ef602bc105d","redirectLinkEnabled":0,"hasAllocated":1,"isWearing":1,"stampPosition":0,"hasStamp":0,"allocationCount":1,"allocatedDate":"2023.09.07","individualDisplayEnabled":0,"individualDisplaySort":0,"categoryType":1001},"crmLevel":6,"crmLevelSwitch":1,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":341931744,"type":1,"supId":0,"prevId":0,"content":"Cery interesting","text":"Cery interesting","html":"Cery interesting"}],"langContent":"EN"},{"id":341931502,"gmtCreate":1617769094206,"gmtModify":1704702886790,"author":{"id":"3565081370855755","authorId":"3565081370855755","name":"tacocat","avatar":"https://static.tigerbbs.com/bb4906006ea3ff0f14beccc9440653e5","vip":1,"hat":"https://static.tigerbbs.com/b0a2963eb37c60c5d6d4a8dbcd266952","crmLevel":3,"crmLevelSwitch":1,"idStr":"3565081370855755","authorIdStr":"3565081370855755"},"htmlText":"?","listText":"?","text":"?","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":2,"repostSize":0,"link":"https://ttm.financial/post/341931502","repostId":1144215470,"repostType":4,"repost":{"id":"1144215470","kind":"news","pubTimestamp":1617768314,"share":"https://ttm.financial/m/news/1144215470?lang=&edition=fundamental","pubTime":"2021-04-07 12:05","market":"us","language":"en","title":"Archegos: Snowflake That Triggers the Avalanche?","url":"https://stock-news.laohu8.com/highlight/detail?id=1144215470","media":"Daily Reckoning","summary":"Archegos was not a household name until about two weeks ago when it made headlines all over the worl","content":"Archegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund trader. Family offices can be conservative in their investment approach, but they can also be as highly leveraged and as risky as any hedge fund, or even more so. It’s up to the person managing the family office.\nIn Hwang’s case, the money was mostly his own, so he ran his family office the way he used to run his hedge fund – with high leverage and almost no transparency. Hwang made huge bets in stocks, often buying as much as 10% of a company.\nHe avoided legal reporting requirements on positions of 5% or more because they were mostly held through complicated financial instruments called derivatives. Instead of actually owning the stock (which would require reporting), he bought equity swaps from big banks.\nThat gives you the same economic exposure as owning the stock but without actual stock ownership and the regulatory reporting requirements that come with ownership.\nThe Death Spiral\nMany of Hwang’s positions were in Chinese highfliers, including RLX Technologies and GSX Techedu. Chinese stocks started to decline due to a combination of the strong dollar and the internal efforts in China to reign in corporate oligarchs and reduce risk-taking by banks.\nThis led to margin calls at Archegos, which caused Hwang to skip a new offering of Viacom-CBS stock in which he was also a large holder. That caused dumping in Viacom-CBS, which led to more margin calls on Archegos: a classic Wall Street death spiral.\nThe big dealers such as Goldman, Morgan Stanley and Credit Suisse began closing out leveraged positions in Archegos at fire sales prices. The dealers lost billions of dollars, and Archegos lost even more as its cash and positions disappeared, and dealers made demands for balances due.\nAll of this was a walk down memory lane for me.\nA Near Disaster\nI was on the front lines of the Long-Term Capital Management (LTCM) bailout in 1998. I negotiated the $4 billion rescue by 14 Wall Street banks, prompted by the Federal Reserve Bank of New York.\nThe causes of the LTCM meltdown were the same as the Archegos meltdown – too much leverage and not enough transparency. Each bank knew what its individual exposures were, but none of the banks knew what the total risk in the fund was. The banks could see their slice of the risk, but not the big picture.\nNow that the financial meltdown is over, the regulatory crackdown begins. But don’t expect any changes soon. In 1998, there were immediate calls for regulation changes. Regulators wanted to limit leverage and require holders of equity derivative positions to provide transparency exactly as if they held the positions in outright stock form.\nThose regulatory changes never happened in 1998, and I don’t expect them to happen now. Wall Street makes enormous profits by selling derivatives, and hedge funds can make even bigger profits by trading them.\nDon’t Expect Changes\nThe occasional meltdown may appear, but Wall Street still comes out ahead even if an individual hedge fund or family office melts down. Despite the public hearings and calls for regulation, Wall Street controls Washington. And what Wall Street wants, Wall Street gets. That’s not some wild conspiracy theory; it’s just the way things work.\nThe problem for everyday investors is this: What happens when a future meltdown spirals out of control to the point that no rescue is possible, and the entire global system of exchanges and banks begins to collapse?\nThat did not happen in the Archegos case (yet), but it did almost happen in the case of LTCM.\nHow long will banks, investors and hedge funds keep rolling the dice? It appears they’re continuing to roll the dice in other ways since they’re pouring money into stocks when it looks like we’re near a market top…\nYou Don’t Want to Short a Bubble\nCalling a market top or bottom is difficult. Even when you see sure signs of a bubble (they are easy to spot on price charts), there’s no assurance that the bubble won’t continue.\nThe 1999 dot.com bubble was seen for what it was at the time, but investors couldn’t get enough of Pets.com (remember the sock puppet spokesperson?) or Space.com (it’s still around but only after a nasty stock price crash in 2000).\nThe same was true of the Nikkei Stock Index in Japan. As it pushed to 40,000 in late 1989, it was widely viewed as a bubble, but the momentum continued. Finally, it crashed and bottomed at 7,570 in 2009. It only recently made it back to 30,000 after a 30-year recovery.\nYou don’t want to short a bubble because if momentum continues, you can lose a lot of money being right. There’s usually plenty of money to be made on the way down once the bubble bursts. Still, there are certain indicators of a market nearing a top that are more reliable than others.\nOne such indicator is called “distribution” by Wall Street insiders. It refers to a process of insiders and banks dumping stock on unsuspecting retail investors. The retail investors often don’t have access to the best deals, such as IPOs, so they snap up any such Wall Street offerings readily.\nLambs to Slaughter\nLittle do they know that the insiders see the crash coming and are dumping high-priced stocks on the little guy so they can escape the collapse with profits in hand…\nYou’ve probably heard of Robinhood by now. Robinhood is an online trading platform available as a mobile phone app that is favored by many retail investors, especially first-time traders and millennials using government handout checks to place leveraged bets using options.\nRobinHood has announced that their platform will now be available for IPOs, which are among the most prized offerings and often soar in price on the first day of trading.\nBecause of that first-day dynamic, Wall Street generally keeps the IPO allocations for their most favored clients, especially large institutions. If IPOs are now being distributed to small retail accounts, it means that the Wall Street banks don’t expect them to perform particularly well.\nThey just want to get the IPOs done so entrepreneurs can get rich, and the banks can collect fees. If retail investors get burned, well that’s just too bad for them. Distribution is most common near market tops.\nAnd that may be just where we are right now. It’s a good time to reduce your exposure to equities and increase your cash holdings.\nThere will be plenty of opportunities to profit on the way down.\nAgain, I’m not definitively calling a market top right now. But it’s better to get out a little too early than a little too late.","source":"lsy1615905701595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Archegos: Snowflake That Triggers the Avalanche?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nArchegos: Snowflake That Triggers the Avalanche?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-07 12:05 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/>Daily Reckoning</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nArchegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund ...\n\n<a href=\"https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1144215470","content_text":"Archegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund trader. Family offices can be conservative in their investment approach, but they can also be as highly leveraged and as risky as any hedge fund, or even more so. It’s up to the person managing the family office.\nIn Hwang’s case, the money was mostly his own, so he ran his family office the way he used to run his hedge fund – with high leverage and almost no transparency. Hwang made huge bets in stocks, often buying as much as 10% of a company.\nHe avoided legal reporting requirements on positions of 5% or more because they were mostly held through complicated financial instruments called derivatives. Instead of actually owning the stock (which would require reporting), he bought equity swaps from big banks.\nThat gives you the same economic exposure as owning the stock but without actual stock ownership and the regulatory reporting requirements that come with ownership.\nThe Death Spiral\nMany of Hwang’s positions were in Chinese highfliers, including RLX Technologies and GSX Techedu. Chinese stocks started to decline due to a combination of the strong dollar and the internal efforts in China to reign in corporate oligarchs and reduce risk-taking by banks.\nThis led to margin calls at Archegos, which caused Hwang to skip a new offering of Viacom-CBS stock in which he was also a large holder. That caused dumping in Viacom-CBS, which led to more margin calls on Archegos: a classic Wall Street death spiral.\nThe big dealers such as Goldman, Morgan Stanley and Credit Suisse began closing out leveraged positions in Archegos at fire sales prices. The dealers lost billions of dollars, and Archegos lost even more as its cash and positions disappeared, and dealers made demands for balances due.\nAll of this was a walk down memory lane for me.\nA Near Disaster\nI was on the front lines of the Long-Term Capital Management (LTCM) bailout in 1998. I negotiated the $4 billion rescue by 14 Wall Street banks, prompted by the Federal Reserve Bank of New York.\nThe causes of the LTCM meltdown were the same as the Archegos meltdown – too much leverage and not enough transparency. Each bank knew what its individual exposures were, but none of the banks knew what the total risk in the fund was. The banks could see their slice of the risk, but not the big picture.\nNow that the financial meltdown is over, the regulatory crackdown begins. But don’t expect any changes soon. In 1998, there were immediate calls for regulation changes. Regulators wanted to limit leverage and require holders of equity derivative positions to provide transparency exactly as if they held the positions in outright stock form.\nThose regulatory changes never happened in 1998, and I don’t expect them to happen now. Wall Street makes enormous profits by selling derivatives, and hedge funds can make even bigger profits by trading them.\nDon’t Expect Changes\nThe occasional meltdown may appear, but Wall Street still comes out ahead even if an individual hedge fund or family office melts down. Despite the public hearings and calls for regulation, Wall Street controls Washington. And what Wall Street wants, Wall Street gets. That’s not some wild conspiracy theory; it’s just the way things work.\nThe problem for everyday investors is this: What happens when a future meltdown spirals out of control to the point that no rescue is possible, and the entire global system of exchanges and banks begins to collapse?\nThat did not happen in the Archegos case (yet), but it did almost happen in the case of LTCM.\nHow long will banks, investors and hedge funds keep rolling the dice? It appears they’re continuing to roll the dice in other ways since they’re pouring money into stocks when it looks like we’re near a market top…\nYou Don’t Want to Short a Bubble\nCalling a market top or bottom is difficult. Even when you see sure signs of a bubble (they are easy to spot on price charts), there’s no assurance that the bubble won’t continue.\nThe 1999 dot.com bubble was seen for what it was at the time, but investors couldn’t get enough of Pets.com (remember the sock puppet spokesperson?) or Space.com (it’s still around but only after a nasty stock price crash in 2000).\nThe same was true of the Nikkei Stock Index in Japan. As it pushed to 40,000 in late 1989, it was widely viewed as a bubble, but the momentum continued. Finally, it crashed and bottomed at 7,570 in 2009. It only recently made it back to 30,000 after a 30-year recovery.\nYou don’t want to short a bubble because if momentum continues, you can lose a lot of money being right. There’s usually plenty of money to be made on the way down once the bubble bursts. Still, there are certain indicators of a market nearing a top that are more reliable than others.\nOne such indicator is called “distribution” by Wall Street insiders. It refers to a process of insiders and banks dumping stock on unsuspecting retail investors. The retail investors often don’t have access to the best deals, such as IPOs, so they snap up any such Wall Street offerings readily.\nLambs to Slaughter\nLittle do they know that the insiders see the crash coming and are dumping high-priced stocks on the little guy so they can escape the collapse with profits in hand…\nYou’ve probably heard of Robinhood by now. Robinhood is an online trading platform available as a mobile phone app that is favored by many retail investors, especially first-time traders and millennials using government handout checks to place leveraged bets using options.\nRobinHood has announced that their platform will now be available for IPOs, which are among the most prized offerings and often soar in price on the first day of trading.\nBecause of that first-day dynamic, Wall Street generally keeps the IPO allocations for their most favored clients, especially large institutions. If IPOs are now being distributed to small retail accounts, it means that the Wall Street banks don’t expect them to perform particularly well.\nThey just want to get the IPOs done so entrepreneurs can get rich, and the banks can collect fees. If retail investors get burned, well that’s just too bad for them. Distribution is most common near market tops.\nAnd that may be just where we are right now. It’s a good time to reduce your exposure to equities and increase your cash holdings.\nThere will be plenty of opportunities to profit on the way down.\nAgain, I’m not definitively calling a market top right now. But it’s better to get out a little too early than a little too late.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":3976416,"gmtCreate":1617769468613,"gmtModify":1680783146247,"authorId":3572249185724220,"author":{"id":3572249185724220,"idStr":"3572249185724220","authorId":3572249185724220,"name":"xoxoll","avatar":"https://static.tigerbbs.com/8ed65c2962af2a6fbd414f4d6fe9e378","vip":1,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":341931502,"type":1,"supId":0,"prevId":0,"content":"Help me Comment and like ","text":"Help me Comment and like ","html":"Help me Comment and like "},{"id":3976519,"gmtCreate":1617770017217,"gmtModify":1680783142106,"authorId":3574937002842984,"author":{"id":3574937002842984,"idStr":"3574937002842984","authorId":3574937002842984,"name":"rachelicing","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"crmLevel":4,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":341931502,"type":1,"supId":0,"prevId":0,"content":"??","text":"??","html":"??"}],"langContent":"EN"},{"id":341939129,"gmtCreate":1617769007161,"gmtModify":1704702883836,"author":{"id":"3579165302374821","authorId":"3579165302374821","name":"Tony0623","avatar":"https://static.tigerbbs.com/84dac78108a5811a8c221da360733dfd","vip":1,"crmLevel":8,"crmLevelSwitch":1,"idStr":"3579165302374821","authorIdStr":"3579165302374821"},"htmlText":"cool","listText":"cool","text":"cool","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":4,"repostSize":0,"link":"https://ttm.financial/post/341939129","repostId":1144215470,"repostType":4,"repost":{"id":"1144215470","kind":"news","pubTimestamp":1617768314,"share":"https://ttm.financial/m/news/1144215470?lang=&edition=fundamental","pubTime":"2021-04-07 12:05","market":"us","language":"en","title":"Archegos: Snowflake That Triggers the Avalanche?","url":"https://stock-news.laohu8.com/highlight/detail?id=1144215470","media":"Daily Reckoning","summary":"Archegos was not a household name until about two weeks ago when it made headlines all over the worl","content":"Archegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund trader. Family offices can be conservative in their investment approach, but they can also be as highly leveraged and as risky as any hedge fund, or even more so. It’s up to the person managing the family office.\nIn Hwang’s case, the money was mostly his own, so he ran his family office the way he used to run his hedge fund – with high leverage and almost no transparency. Hwang made huge bets in stocks, often buying as much as 10% of a company.\nHe avoided legal reporting requirements on positions of 5% or more because they were mostly held through complicated financial instruments called derivatives. Instead of actually owning the stock (which would require reporting), he bought equity swaps from big banks.\nThat gives you the same economic exposure as owning the stock but without actual stock ownership and the regulatory reporting requirements that come with ownership.\nThe Death Spiral\nMany of Hwang’s positions were in Chinese highfliers, including RLX Technologies and GSX Techedu. Chinese stocks started to decline due to a combination of the strong dollar and the internal efforts in China to reign in corporate oligarchs and reduce risk-taking by banks.\nThis led to margin calls at Archegos, which caused Hwang to skip a new offering of Viacom-CBS stock in which he was also a large holder. That caused dumping in Viacom-CBS, which led to more margin calls on Archegos: a classic Wall Street death spiral.\nThe big dealers such as Goldman, Morgan Stanley and Credit Suisse began closing out leveraged positions in Archegos at fire sales prices. The dealers lost billions of dollars, and Archegos lost even more as its cash and positions disappeared, and dealers made demands for balances due.\nAll of this was a walk down memory lane for me.\nA Near Disaster\nI was on the front lines of the Long-Term Capital Management (LTCM) bailout in 1998. I negotiated the $4 billion rescue by 14 Wall Street banks, prompted by the Federal Reserve Bank of New York.\nThe causes of the LTCM meltdown were the same as the Archegos meltdown – too much leverage and not enough transparency. Each bank knew what its individual exposures were, but none of the banks knew what the total risk in the fund was. The banks could see their slice of the risk, but not the big picture.\nNow that the financial meltdown is over, the regulatory crackdown begins. But don’t expect any changes soon. In 1998, there were immediate calls for regulation changes. Regulators wanted to limit leverage and require holders of equity derivative positions to provide transparency exactly as if they held the positions in outright stock form.\nThose regulatory changes never happened in 1998, and I don’t expect them to happen now. Wall Street makes enormous profits by selling derivatives, and hedge funds can make even bigger profits by trading them.\nDon’t Expect Changes\nThe occasional meltdown may appear, but Wall Street still comes out ahead even if an individual hedge fund or family office melts down. Despite the public hearings and calls for regulation, Wall Street controls Washington. And what Wall Street wants, Wall Street gets. That’s not some wild conspiracy theory; it’s just the way things work.\nThe problem for everyday investors is this: What happens when a future meltdown spirals out of control to the point that no rescue is possible, and the entire global system of exchanges and banks begins to collapse?\nThat did not happen in the Archegos case (yet), but it did almost happen in the case of LTCM.\nHow long will banks, investors and hedge funds keep rolling the dice? It appears they’re continuing to roll the dice in other ways since they’re pouring money into stocks when it looks like we’re near a market top…\nYou Don’t Want to Short a Bubble\nCalling a market top or bottom is difficult. Even when you see sure signs of a bubble (they are easy to spot on price charts), there’s no assurance that the bubble won’t continue.\nThe 1999 dot.com bubble was seen for what it was at the time, but investors couldn’t get enough of Pets.com (remember the sock puppet spokesperson?) or Space.com (it’s still around but only after a nasty stock price crash in 2000).\nThe same was true of the Nikkei Stock Index in Japan. As it pushed to 40,000 in late 1989, it was widely viewed as a bubble, but the momentum continued. Finally, it crashed and bottomed at 7,570 in 2009. It only recently made it back to 30,000 after a 30-year recovery.\nYou don’t want to short a bubble because if momentum continues, you can lose a lot of money being right. There’s usually plenty of money to be made on the way down once the bubble bursts. Still, there are certain indicators of a market nearing a top that are more reliable than others.\nOne such indicator is called “distribution” by Wall Street insiders. It refers to a process of insiders and banks dumping stock on unsuspecting retail investors. The retail investors often don’t have access to the best deals, such as IPOs, so they snap up any such Wall Street offerings readily.\nLambs to Slaughter\nLittle do they know that the insiders see the crash coming and are dumping high-priced stocks on the little guy so they can escape the collapse with profits in hand…\nYou’ve probably heard of Robinhood by now. Robinhood is an online trading platform available as a mobile phone app that is favored by many retail investors, especially first-time traders and millennials using government handout checks to place leveraged bets using options.\nRobinHood has announced that their platform will now be available for IPOs, which are among the most prized offerings and often soar in price on the first day of trading.\nBecause of that first-day dynamic, Wall Street generally keeps the IPO allocations for their most favored clients, especially large institutions. If IPOs are now being distributed to small retail accounts, it means that the Wall Street banks don’t expect them to perform particularly well.\nThey just want to get the IPOs done so entrepreneurs can get rich, and the banks can collect fees. If retail investors get burned, well that’s just too bad for them. Distribution is most common near market tops.\nAnd that may be just where we are right now. It’s a good time to reduce your exposure to equities and increase your cash holdings.\nThere will be plenty of opportunities to profit on the way down.\nAgain, I’m not definitively calling a market top right now. But it’s better to get out a little too early than a little too late.","source":"lsy1615905701595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Archegos: Snowflake That Triggers the Avalanche?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nArchegos: Snowflake That Triggers the Avalanche?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-07 12:05 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/>Daily Reckoning</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nArchegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund ...\n\n<a href=\"https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1144215470","content_text":"Archegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund trader. Family offices can be conservative in their investment approach, but they can also be as highly leveraged and as risky as any hedge fund, or even more so. It’s up to the person managing the family office.\nIn Hwang’s case, the money was mostly his own, so he ran his family office the way he used to run his hedge fund – with high leverage and almost no transparency. Hwang made huge bets in stocks, often buying as much as 10% of a company.\nHe avoided legal reporting requirements on positions of 5% or more because they were mostly held through complicated financial instruments called derivatives. Instead of actually owning the stock (which would require reporting), he bought equity swaps from big banks.\nThat gives you the same economic exposure as owning the stock but without actual stock ownership and the regulatory reporting requirements that come with ownership.\nThe Death Spiral\nMany of Hwang’s positions were in Chinese highfliers, including RLX Technologies and GSX Techedu. Chinese stocks started to decline due to a combination of the strong dollar and the internal efforts in China to reign in corporate oligarchs and reduce risk-taking by banks.\nThis led to margin calls at Archegos, which caused Hwang to skip a new offering of Viacom-CBS stock in which he was also a large holder. That caused dumping in Viacom-CBS, which led to more margin calls on Archegos: a classic Wall Street death spiral.\nThe big dealers such as Goldman, Morgan Stanley and Credit Suisse began closing out leveraged positions in Archegos at fire sales prices. The dealers lost billions of dollars, and Archegos lost even more as its cash and positions disappeared, and dealers made demands for balances due.\nAll of this was a walk down memory lane for me.\nA Near Disaster\nI was on the front lines of the Long-Term Capital Management (LTCM) bailout in 1998. I negotiated the $4 billion rescue by 14 Wall Street banks, prompted by the Federal Reserve Bank of New York.\nThe causes of the LTCM meltdown were the same as the Archegos meltdown – too much leverage and not enough transparency. Each bank knew what its individual exposures were, but none of the banks knew what the total risk in the fund was. The banks could see their slice of the risk, but not the big picture.\nNow that the financial meltdown is over, the regulatory crackdown begins. But don’t expect any changes soon. In 1998, there were immediate calls for regulation changes. Regulators wanted to limit leverage and require holders of equity derivative positions to provide transparency exactly as if they held the positions in outright stock form.\nThose regulatory changes never happened in 1998, and I don’t expect them to happen now. Wall Street makes enormous profits by selling derivatives, and hedge funds can make even bigger profits by trading them.\nDon’t Expect Changes\nThe occasional meltdown may appear, but Wall Street still comes out ahead even if an individual hedge fund or family office melts down. Despite the public hearings and calls for regulation, Wall Street controls Washington. And what Wall Street wants, Wall Street gets. That’s not some wild conspiracy theory; it’s just the way things work.\nThe problem for everyday investors is this: What happens when a future meltdown spirals out of control to the point that no rescue is possible, and the entire global system of exchanges and banks begins to collapse?\nThat did not happen in the Archegos case (yet), but it did almost happen in the case of LTCM.\nHow long will banks, investors and hedge funds keep rolling the dice? It appears they’re continuing to roll the dice in other ways since they’re pouring money into stocks when it looks like we’re near a market top…\nYou Don’t Want to Short a Bubble\nCalling a market top or bottom is difficult. Even when you see sure signs of a bubble (they are easy to spot on price charts), there’s no assurance that the bubble won’t continue.\nThe 1999 dot.com bubble was seen for what it was at the time, but investors couldn’t get enough of Pets.com (remember the sock puppet spokesperson?) or Space.com (it’s still around but only after a nasty stock price crash in 2000).\nThe same was true of the Nikkei Stock Index in Japan. As it pushed to 40,000 in late 1989, it was widely viewed as a bubble, but the momentum continued. Finally, it crashed and bottomed at 7,570 in 2009. It only recently made it back to 30,000 after a 30-year recovery.\nYou don’t want to short a bubble because if momentum continues, you can lose a lot of money being right. There’s usually plenty of money to be made on the way down once the bubble bursts. Still, there are certain indicators of a market nearing a top that are more reliable than others.\nOne such indicator is called “distribution” by Wall Street insiders. It refers to a process of insiders and banks dumping stock on unsuspecting retail investors. The retail investors often don’t have access to the best deals, such as IPOs, so they snap up any such Wall Street offerings readily.\nLambs to Slaughter\nLittle do they know that the insiders see the crash coming and are dumping high-priced stocks on the little guy so they can escape the collapse with profits in hand…\nYou’ve probably heard of Robinhood by now. Robinhood is an online trading platform available as a mobile phone app that is favored by many retail investors, especially first-time traders and millennials using government handout checks to place leveraged bets using options.\nRobinHood has announced that their platform will now be available for IPOs, which are among the most prized offerings and often soar in price on the first day of trading.\nBecause of that first-day dynamic, Wall Street generally keeps the IPO allocations for their most favored clients, especially large institutions. If IPOs are now being distributed to small retail accounts, it means that the Wall Street banks don’t expect them to perform particularly well.\nThey just want to get the IPOs done so entrepreneurs can get rich, and the banks can collect fees. If retail investors get burned, well that’s just too bad for them. Distribution is most common near market tops.\nAnd that may be just where we are right now. It’s a good time to reduce your exposure to equities and increase your cash holdings.\nThere will be plenty of opportunities to profit on the way down.\nAgain, I’m not definitively calling a market top right now. But it’s better to get out a little too early than a little too late.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":3976669,"gmtCreate":1617771407059,"gmtModify":1680783156726,"authorId":3578566071266225,"author":{"id":3578566071266225,"idStr":"3578566071266225","authorId":3578566071266225,"name":"Bentez","avatar":"https://static.tigerbbs.com/c93ad51cf717a4ebcbd8a750e1bb06d7","vip":1,"currentWearingBadge":{"badgeId":"972123088c9646f7b6091ae0662215be-1","templateUuid":"972123088c9646f7b6091ae0662215be","name":"Elite Trader","description":"Total number of securities or futures transactions reached 30","bigImgUrl":"https://static.tigerbbs.com/ab0f87127c854ce3191a752d57b46edc","smallImgUrl":"https://static.tigerbbs.com/c9835ce48b8c8743566d344ac7a7ba8c","grayImgUrl":"https://static.tigerbbs.com/76754b53ce7a90019f132c1d2fbc698f","redirectLinkEnabled":0,"hasAllocated":1,"isWearing":1,"stampPosition":0,"hasStamp":0,"allocationCount":1,"allocatedDate":"2021.12.21","exceedPercentage":"60.76%","individualDisplayEnabled":0,"individualDisplaySort":0,"categoryType":1100},"crmLevel":3,"crmLevelSwitch":1,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":341939129,"type":1,"supId":0,"prevId":0,"content":"Comment, pls Reply my comment!","text":"Comment, pls Reply my comment!","html":"Comment, pls Reply my comment!"},{"id":3976670,"gmtCreate":1617771415565,"gmtModify":1680783154129,"authorId":3578566071266225,"author":{"id":3578566071266225,"idStr":"3578566071266225","authorId":3578566071266225,"name":"Bentez","avatar":"https://static.tigerbbs.com/c93ad51cf717a4ebcbd8a750e1bb06d7","vip":1,"currentWearingBadge":{"badgeId":"972123088c9646f7b6091ae0662215be-1","templateUuid":"972123088c9646f7b6091ae0662215be","name":"Elite Trader","description":"Total number of securities or futures transactions reached 30","bigImgUrl":"https://static.tigerbbs.com/ab0f87127c854ce3191a752d57b46edc","smallImgUrl":"https://static.tigerbbs.com/c9835ce48b8c8743566d344ac7a7ba8c","grayImgUrl":"https://static.tigerbbs.com/76754b53ce7a90019f132c1d2fbc698f","redirectLinkEnabled":0,"hasAllocated":1,"isWearing":1,"stampPosition":0,"hasStamp":0,"allocationCount":1,"allocatedDate":"2021.12.21","exceedPercentage":"60.76%","individualDisplayEnabled":0,"individualDisplaySort":0,"categoryType":1100},"crmLevel":3,"crmLevelSwitch":1,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":341939129,"type":1,"supId":3976417,"prevId":0,"content":"ReplIed! ","text":"ReplIed! ","html":"ReplIed! "},{"id":3976741,"gmtCreate":1617772282557,"gmtModify":1680783153883,"authorId":3579165302374821,"author":{"id":3579165302374821,"idStr":"3579165302374821","authorId":3579165302374821,"name":"Tony0623","avatar":"https://static.tigerbbs.com/84dac78108a5811a8c221da360733dfd","vip":1,"crmLevel":8,"crmLevelSwitch":1,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":341939129,"type":1,"supId":3976669,"prevId":0,"content":"good","text":"good","html":"good"},{"id":3976417,"gmtCreate":1617769480801,"gmtModify":1680783147830,"authorId":3572249185724220,"author":{"id":3572249185724220,"idStr":"3572249185724220","authorId":3572249185724220,"name":"xoxoll","avatar":"https://static.tigerbbs.com/8ed65c2962af2a6fbd414f4d6fe9e378","vip":1,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":341939129,"type":1,"supId":0,"prevId":0,"content":"Help me comment and like","text":"Help me comment and like","html":"Help me comment and like"}],"langContent":"EN"},{"id":341997945,"gmtCreate":1617768812787,"gmtModify":1704702880198,"author":{"id":"3576138559006730","authorId":"3576138559006730","name":"投资不是一两天","avatar":"https://static.tigerbbs.com/36e77b5b6d744959b49fda03e290c69b","vip":1,"crmLevel":4,"crmLevelSwitch":0,"idStr":"3576138559006730","authorIdStr":"3576138559006730"},"htmlText":"Ridiculous article. I have been buying ipos on most brokerages for as long as i know and im not the rich folks at all","listText":"Ridiculous article. I have been buying ipos on most brokerages for as long as i know and im not the rich folks at all","text":"Ridiculous article. I have been buying ipos on most brokerages for as long as i know and im not the rich folks at all","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/341997945","repostId":1144215470,"repostType":4,"repost":{"id":"1144215470","kind":"news","pubTimestamp":1617768314,"share":"https://ttm.financial/m/news/1144215470?lang=&edition=fundamental","pubTime":"2021-04-07 12:05","market":"us","language":"en","title":"Archegos: Snowflake That Triggers the Avalanche?","url":"https://stock-news.laohu8.com/highlight/detail?id=1144215470","media":"Daily Reckoning","summary":"Archegos was not a household name until about two weeks ago when it made headlines all over the worl","content":"Archegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund trader. Family offices can be conservative in their investment approach, but they can also be as highly leveraged and as risky as any hedge fund, or even more so. It’s up to the person managing the family office.\nIn Hwang’s case, the money was mostly his own, so he ran his family office the way he used to run his hedge fund – with high leverage and almost no transparency. Hwang made huge bets in stocks, often buying as much as 10% of a company.\nHe avoided legal reporting requirements on positions of 5% or more because they were mostly held through complicated financial instruments called derivatives. Instead of actually owning the stock (which would require reporting), he bought equity swaps from big banks.\nThat gives you the same economic exposure as owning the stock but without actual stock ownership and the regulatory reporting requirements that come with ownership.\nThe Death Spiral\nMany of Hwang’s positions were in Chinese highfliers, including RLX Technologies and GSX Techedu. Chinese stocks started to decline due to a combination of the strong dollar and the internal efforts in China to reign in corporate oligarchs and reduce risk-taking by banks.\nThis led to margin calls at Archegos, which caused Hwang to skip a new offering of Viacom-CBS stock in which he was also a large holder. That caused dumping in Viacom-CBS, which led to more margin calls on Archegos: a classic Wall Street death spiral.\nThe big dealers such as Goldman, Morgan Stanley and Credit Suisse began closing out leveraged positions in Archegos at fire sales prices. The dealers lost billions of dollars, and Archegos lost even more as its cash and positions disappeared, and dealers made demands for balances due.\nAll of this was a walk down memory lane for me.\nA Near Disaster\nI was on the front lines of the Long-Term Capital Management (LTCM) bailout in 1998. I negotiated the $4 billion rescue by 14 Wall Street banks, prompted by the Federal Reserve Bank of New York.\nThe causes of the LTCM meltdown were the same as the Archegos meltdown – too much leverage and not enough transparency. Each bank knew what its individual exposures were, but none of the banks knew what the total risk in the fund was. The banks could see their slice of the risk, but not the big picture.\nNow that the financial meltdown is over, the regulatory crackdown begins. But don’t expect any changes soon. In 1998, there were immediate calls for regulation changes. Regulators wanted to limit leverage and require holders of equity derivative positions to provide transparency exactly as if they held the positions in outright stock form.\nThose regulatory changes never happened in 1998, and I don’t expect them to happen now. Wall Street makes enormous profits by selling derivatives, and hedge funds can make even bigger profits by trading them.\nDon’t Expect Changes\nThe occasional meltdown may appear, but Wall Street still comes out ahead even if an individual hedge fund or family office melts down. Despite the public hearings and calls for regulation, Wall Street controls Washington. And what Wall Street wants, Wall Street gets. That’s not some wild conspiracy theory; it’s just the way things work.\nThe problem for everyday investors is this: What happens when a future meltdown spirals out of control to the point that no rescue is possible, and the entire global system of exchanges and banks begins to collapse?\nThat did not happen in the Archegos case (yet), but it did almost happen in the case of LTCM.\nHow long will banks, investors and hedge funds keep rolling the dice? It appears they’re continuing to roll the dice in other ways since they’re pouring money into stocks when it looks like we’re near a market top…\nYou Don’t Want to Short a Bubble\nCalling a market top or bottom is difficult. Even when you see sure signs of a bubble (they are easy to spot on price charts), there’s no assurance that the bubble won’t continue.\nThe 1999 dot.com bubble was seen for what it was at the time, but investors couldn’t get enough of Pets.com (remember the sock puppet spokesperson?) or Space.com (it’s still around but only after a nasty stock price crash in 2000).\nThe same was true of the Nikkei Stock Index in Japan. As it pushed to 40,000 in late 1989, it was widely viewed as a bubble, but the momentum continued. Finally, it crashed and bottomed at 7,570 in 2009. It only recently made it back to 30,000 after a 30-year recovery.\nYou don’t want to short a bubble because if momentum continues, you can lose a lot of money being right. There’s usually plenty of money to be made on the way down once the bubble bursts. Still, there are certain indicators of a market nearing a top that are more reliable than others.\nOne such indicator is called “distribution” by Wall Street insiders. It refers to a process of insiders and banks dumping stock on unsuspecting retail investors. The retail investors often don’t have access to the best deals, such as IPOs, so they snap up any such Wall Street offerings readily.\nLambs to Slaughter\nLittle do they know that the insiders see the crash coming and are dumping high-priced stocks on the little guy so they can escape the collapse with profits in hand…\nYou’ve probably heard of Robinhood by now. Robinhood is an online trading platform available as a mobile phone app that is favored by many retail investors, especially first-time traders and millennials using government handout checks to place leveraged bets using options.\nRobinHood has announced that their platform will now be available for IPOs, which are among the most prized offerings and often soar in price on the first day of trading.\nBecause of that first-day dynamic, Wall Street generally keeps the IPO allocations for their most favored clients, especially large institutions. If IPOs are now being distributed to small retail accounts, it means that the Wall Street banks don’t expect them to perform particularly well.\nThey just want to get the IPOs done so entrepreneurs can get rich, and the banks can collect fees. If retail investors get burned, well that’s just too bad for them. Distribution is most common near market tops.\nAnd that may be just where we are right now. It’s a good time to reduce your exposure to equities and increase your cash holdings.\nThere will be plenty of opportunities to profit on the way down.\nAgain, I’m not definitively calling a market top right now. But it’s better to get out a little too early than a little too late.","source":"lsy1615905701595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Archegos: Snowflake That Triggers the Avalanche?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nArchegos: Snowflake That Triggers the Avalanche?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-07 12:05 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/>Daily Reckoning</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nArchegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund ...\n\n<a href=\"https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1144215470","content_text":"Archegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund trader. Family offices can be conservative in their investment approach, but they can also be as highly leveraged and as risky as any hedge fund, or even more so. It’s up to the person managing the family office.\nIn Hwang’s case, the money was mostly his own, so he ran his family office the way he used to run his hedge fund – with high leverage and almost no transparency. Hwang made huge bets in stocks, often buying as much as 10% of a company.\nHe avoided legal reporting requirements on positions of 5% or more because they were mostly held through complicated financial instruments called derivatives. Instead of actually owning the stock (which would require reporting), he bought equity swaps from big banks.\nThat gives you the same economic exposure as owning the stock but without actual stock ownership and the regulatory reporting requirements that come with ownership.\nThe Death Spiral\nMany of Hwang’s positions were in Chinese highfliers, including RLX Technologies and GSX Techedu. Chinese stocks started to decline due to a combination of the strong dollar and the internal efforts in China to reign in corporate oligarchs and reduce risk-taking by banks.\nThis led to margin calls at Archegos, which caused Hwang to skip a new offering of Viacom-CBS stock in which he was also a large holder. That caused dumping in Viacom-CBS, which led to more margin calls on Archegos: a classic Wall Street death spiral.\nThe big dealers such as Goldman, Morgan Stanley and Credit Suisse began closing out leveraged positions in Archegos at fire sales prices. The dealers lost billions of dollars, and Archegos lost even more as its cash and positions disappeared, and dealers made demands for balances due.\nAll of this was a walk down memory lane for me.\nA Near Disaster\nI was on the front lines of the Long-Term Capital Management (LTCM) bailout in 1998. I negotiated the $4 billion rescue by 14 Wall Street banks, prompted by the Federal Reserve Bank of New York.\nThe causes of the LTCM meltdown were the same as the Archegos meltdown – too much leverage and not enough transparency. Each bank knew what its individual exposures were, but none of the banks knew what the total risk in the fund was. The banks could see their slice of the risk, but not the big picture.\nNow that the financial meltdown is over, the regulatory crackdown begins. But don’t expect any changes soon. In 1998, there were immediate calls for regulation changes. Regulators wanted to limit leverage and require holders of equity derivative positions to provide transparency exactly as if they held the positions in outright stock form.\nThose regulatory changes never happened in 1998, and I don’t expect them to happen now. Wall Street makes enormous profits by selling derivatives, and hedge funds can make even bigger profits by trading them.\nDon’t Expect Changes\nThe occasional meltdown may appear, but Wall Street still comes out ahead even if an individual hedge fund or family office melts down. Despite the public hearings and calls for regulation, Wall Street controls Washington. And what Wall Street wants, Wall Street gets. That’s not some wild conspiracy theory; it’s just the way things work.\nThe problem for everyday investors is this: What happens when a future meltdown spirals out of control to the point that no rescue is possible, and the entire global system of exchanges and banks begins to collapse?\nThat did not happen in the Archegos case (yet), but it did almost happen in the case of LTCM.\nHow long will banks, investors and hedge funds keep rolling the dice? It appears they’re continuing to roll the dice in other ways since they’re pouring money into stocks when it looks like we’re near a market top…\nYou Don’t Want to Short a Bubble\nCalling a market top or bottom is difficult. Even when you see sure signs of a bubble (they are easy to spot on price charts), there’s no assurance that the bubble won’t continue.\nThe 1999 dot.com bubble was seen for what it was at the time, but investors couldn’t get enough of Pets.com (remember the sock puppet spokesperson?) or Space.com (it’s still around but only after a nasty stock price crash in 2000).\nThe same was true of the Nikkei Stock Index in Japan. As it pushed to 40,000 in late 1989, it was widely viewed as a bubble, but the momentum continued. Finally, it crashed and bottomed at 7,570 in 2009. It only recently made it back to 30,000 after a 30-year recovery.\nYou don’t want to short a bubble because if momentum continues, you can lose a lot of money being right. There’s usually plenty of money to be made on the way down once the bubble bursts. Still, there are certain indicators of a market nearing a top that are more reliable than others.\nOne such indicator is called “distribution” by Wall Street insiders. It refers to a process of insiders and banks dumping stock on unsuspecting retail investors. The retail investors often don’t have access to the best deals, such as IPOs, so they snap up any such Wall Street offerings readily.\nLambs to Slaughter\nLittle do they know that the insiders see the crash coming and are dumping high-priced stocks on the little guy so they can escape the collapse with profits in hand…\nYou’ve probably heard of Robinhood by now. Robinhood is an online trading platform available as a mobile phone app that is favored by many retail investors, especially first-time traders and millennials using government handout checks to place leveraged bets using options.\nRobinHood has announced that their platform will now be available for IPOs, which are among the most prized offerings and often soar in price on the first day of trading.\nBecause of that first-day dynamic, Wall Street generally keeps the IPO allocations for their most favored clients, especially large institutions. If IPOs are now being distributed to small retail accounts, it means that the Wall Street banks don’t expect them to perform particularly well.\nThey just want to get the IPOs done so entrepreneurs can get rich, and the banks can collect fees. If retail investors get burned, well that’s just too bad for them. Distribution is most common near market tops.\nAnd that may be just where we are right now. It’s a good time to reduce your exposure to equities and increase your cash holdings.\nThere will be plenty of opportunities to profit on the way down.\nAgain, I’m not definitively calling a market top right now. But it’s better to get out a little too early than a little too late.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":3976420,"gmtCreate":1617769490808,"gmtModify":1680783145881,"authorId":3572249185724220,"author":{"id":3572249185724220,"idStr":"3572249185724220","authorId":3572249185724220,"name":"xoxoll","avatar":"https://static.tigerbbs.com/8ed65c2962af2a6fbd414f4d6fe9e378","vip":1,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":341997945,"type":1,"supId":0,"prevId":0,"content":"Help me like And comment ","text":"Help me like And comment ","html":"Help me like And comment "}],"langContent":"EN"},{"id":341998987,"gmtCreate":1617768394949,"gmtModify":1704702873277,"author":{"id":"3576880831453882","authorId":"3576880831453882","name":"capsulefong","avatar":"https://static.tigerbbs.com/25f18e70d07b538bd6b81cf112a09cde","vip":1,"crmLevel":4,"crmLevelSwitch":0,"idStr":"3576880831453882","authorIdStr":"3576880831453882"},"htmlText":"Comment and like please&nbsp;","listText":"Comment and like please&nbsp;","text":"Comment and like please","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":1,"repostSize":0,"link":"https://ttm.financial/post/341998987","repostId":1144215470,"repostType":4,"repost":{"id":"1144215470","kind":"news","pubTimestamp":1617768314,"share":"https://ttm.financial/m/news/1144215470?lang=&edition=fundamental","pubTime":"2021-04-07 12:05","market":"us","language":"en","title":"Archegos: Snowflake That Triggers the Avalanche?","url":"https://stock-news.laohu8.com/highlight/detail?id=1144215470","media":"Daily Reckoning","summary":"Archegos was not a household name until about two weeks ago when it made headlines all over the worl","content":"Archegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund trader. Family offices can be conservative in their investment approach, but they can also be as highly leveraged and as risky as any hedge fund, or even more so. It’s up to the person managing the family office.\nIn Hwang’s case, the money was mostly his own, so he ran his family office the way he used to run his hedge fund – with high leverage and almost no transparency. Hwang made huge bets in stocks, often buying as much as 10% of a company.\nHe avoided legal reporting requirements on positions of 5% or more because they were mostly held through complicated financial instruments called derivatives. Instead of actually owning the stock (which would require reporting), he bought equity swaps from big banks.\nThat gives you the same economic exposure as owning the stock but without actual stock ownership and the regulatory reporting requirements that come with ownership.\nThe Death Spiral\nMany of Hwang’s positions were in Chinese highfliers, including RLX Technologies and GSX Techedu. Chinese stocks started to decline due to a combination of the strong dollar and the internal efforts in China to reign in corporate oligarchs and reduce risk-taking by banks.\nThis led to margin calls at Archegos, which caused Hwang to skip a new offering of Viacom-CBS stock in which he was also a large holder. That caused dumping in Viacom-CBS, which led to more margin calls on Archegos: a classic Wall Street death spiral.\nThe big dealers such as Goldman, Morgan Stanley and Credit Suisse began closing out leveraged positions in Archegos at fire sales prices. The dealers lost billions of dollars, and Archegos lost even more as its cash and positions disappeared, and dealers made demands for balances due.\nAll of this was a walk down memory lane for me.\nA Near Disaster\nI was on the front lines of the Long-Term Capital Management (LTCM) bailout in 1998. I negotiated the $4 billion rescue by 14 Wall Street banks, prompted by the Federal Reserve Bank of New York.\nThe causes of the LTCM meltdown were the same as the Archegos meltdown – too much leverage and not enough transparency. Each bank knew what its individual exposures were, but none of the banks knew what the total risk in the fund was. The banks could see their slice of the risk, but not the big picture.\nNow that the financial meltdown is over, the regulatory crackdown begins. But don’t expect any changes soon. In 1998, there were immediate calls for regulation changes. Regulators wanted to limit leverage and require holders of equity derivative positions to provide transparency exactly as if they held the positions in outright stock form.\nThose regulatory changes never happened in 1998, and I don’t expect them to happen now. Wall Street makes enormous profits by selling derivatives, and hedge funds can make even bigger profits by trading them.\nDon’t Expect Changes\nThe occasional meltdown may appear, but Wall Street still comes out ahead even if an individual hedge fund or family office melts down. Despite the public hearings and calls for regulation, Wall Street controls Washington. And what Wall Street wants, Wall Street gets. That’s not some wild conspiracy theory; it’s just the way things work.\nThe problem for everyday investors is this: What happens when a future meltdown spirals out of control to the point that no rescue is possible, and the entire global system of exchanges and banks begins to collapse?\nThat did not happen in the Archegos case (yet), but it did almost happen in the case of LTCM.\nHow long will banks, investors and hedge funds keep rolling the dice? It appears they’re continuing to roll the dice in other ways since they’re pouring money into stocks when it looks like we’re near a market top…\nYou Don’t Want to Short a Bubble\nCalling a market top or bottom is difficult. Even when you see sure signs of a bubble (they are easy to spot on price charts), there’s no assurance that the bubble won’t continue.\nThe 1999 dot.com bubble was seen for what it was at the time, but investors couldn’t get enough of Pets.com (remember the sock puppet spokesperson?) or Space.com (it’s still around but only after a nasty stock price crash in 2000).\nThe same was true of the Nikkei Stock Index in Japan. As it pushed to 40,000 in late 1989, it was widely viewed as a bubble, but the momentum continued. Finally, it crashed and bottomed at 7,570 in 2009. It only recently made it back to 30,000 after a 30-year recovery.\nYou don’t want to short a bubble because if momentum continues, you can lose a lot of money being right. There’s usually plenty of money to be made on the way down once the bubble bursts. Still, there are certain indicators of a market nearing a top that are more reliable than others.\nOne such indicator is called “distribution” by Wall Street insiders. It refers to a process of insiders and banks dumping stock on unsuspecting retail investors. The retail investors often don’t have access to the best deals, such as IPOs, so they snap up any such Wall Street offerings readily.\nLambs to Slaughter\nLittle do they know that the insiders see the crash coming and are dumping high-priced stocks on the little guy so they can escape the collapse with profits in hand…\nYou’ve probably heard of Robinhood by now. Robinhood is an online trading platform available as a mobile phone app that is favored by many retail investors, especially first-time traders and millennials using government handout checks to place leveraged bets using options.\nRobinHood has announced that their platform will now be available for IPOs, which are among the most prized offerings and often soar in price on the first day of trading.\nBecause of that first-day dynamic, Wall Street generally keeps the IPO allocations for their most favored clients, especially large institutions. If IPOs are now being distributed to small retail accounts, it means that the Wall Street banks don’t expect them to perform particularly well.\nThey just want to get the IPOs done so entrepreneurs can get rich, and the banks can collect fees. If retail investors get burned, well that’s just too bad for them. Distribution is most common near market tops.\nAnd that may be just where we are right now. It’s a good time to reduce your exposure to equities and increase your cash holdings.\nThere will be plenty of opportunities to profit on the way down.\nAgain, I’m not definitively calling a market top right now. But it’s better to get out a little too early than a little too late.","source":"lsy1615905701595","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Archegos: Snowflake That Triggers the Avalanche?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nArchegos: Snowflake That Triggers the Avalanche?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-04-07 12:05 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/>Daily Reckoning</a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\nArchegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund ...\n\n<a href=\"https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://dailyreckoning.com/archegos-snowflake-that-triggers-the-avalanche/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1144215470","content_text":"Archegos was not a household name until about two weeks ago when it made headlines all over the world.\nArchegos Capital Management is a family office controlled by Bill Hwang, a former hedge fund trader. Family offices can be conservative in their investment approach, but they can also be as highly leveraged and as risky as any hedge fund, or even more so. It’s up to the person managing the family office.\nIn Hwang’s case, the money was mostly his own, so he ran his family office the way he used to run his hedge fund – with high leverage and almost no transparency. Hwang made huge bets in stocks, often buying as much as 10% of a company.\nHe avoided legal reporting requirements on positions of 5% or more because they were mostly held through complicated financial instruments called derivatives. Instead of actually owning the stock (which would require reporting), he bought equity swaps from big banks.\nThat gives you the same economic exposure as owning the stock but without actual stock ownership and the regulatory reporting requirements that come with ownership.\nThe Death Spiral\nMany of Hwang’s positions were in Chinese highfliers, including RLX Technologies and GSX Techedu. Chinese stocks started to decline due to a combination of the strong dollar and the internal efforts in China to reign in corporate oligarchs and reduce risk-taking by banks.\nThis led to margin calls at Archegos, which caused Hwang to skip a new offering of Viacom-CBS stock in which he was also a large holder. That caused dumping in Viacom-CBS, which led to more margin calls on Archegos: a classic Wall Street death spiral.\nThe big dealers such as Goldman, Morgan Stanley and Credit Suisse began closing out leveraged positions in Archegos at fire sales prices. The dealers lost billions of dollars, and Archegos lost even more as its cash and positions disappeared, and dealers made demands for balances due.\nAll of this was a walk down memory lane for me.\nA Near Disaster\nI was on the front lines of the Long-Term Capital Management (LTCM) bailout in 1998. I negotiated the $4 billion rescue by 14 Wall Street banks, prompted by the Federal Reserve Bank of New York.\nThe causes of the LTCM meltdown were the same as the Archegos meltdown – too much leverage and not enough transparency. Each bank knew what its individual exposures were, but none of the banks knew what the total risk in the fund was. The banks could see their slice of the risk, but not the big picture.\nNow that the financial meltdown is over, the regulatory crackdown begins. But don’t expect any changes soon. In 1998, there were immediate calls for regulation changes. Regulators wanted to limit leverage and require holders of equity derivative positions to provide transparency exactly as if they held the positions in outright stock form.\nThose regulatory changes never happened in 1998, and I don’t expect them to happen now. Wall Street makes enormous profits by selling derivatives, and hedge funds can make even bigger profits by trading them.\nDon’t Expect Changes\nThe occasional meltdown may appear, but Wall Street still comes out ahead even if an individual hedge fund or family office melts down. Despite the public hearings and calls for regulation, Wall Street controls Washington. And what Wall Street wants, Wall Street gets. That’s not some wild conspiracy theory; it’s just the way things work.\nThe problem for everyday investors is this: What happens when a future meltdown spirals out of control to the point that no rescue is possible, and the entire global system of exchanges and banks begins to collapse?\nThat did not happen in the Archegos case (yet), but it did almost happen in the case of LTCM.\nHow long will banks, investors and hedge funds keep rolling the dice? It appears they’re continuing to roll the dice in other ways since they’re pouring money into stocks when it looks like we’re near a market top…\nYou Don’t Want to Short a Bubble\nCalling a market top or bottom is difficult. Even when you see sure signs of a bubble (they are easy to spot on price charts), there’s no assurance that the bubble won’t continue.\nThe 1999 dot.com bubble was seen for what it was at the time, but investors couldn’t get enough of Pets.com (remember the sock puppet spokesperson?) or Space.com (it’s still around but only after a nasty stock price crash in 2000).\nThe same was true of the Nikkei Stock Index in Japan. As it pushed to 40,000 in late 1989, it was widely viewed as a bubble, but the momentum continued. Finally, it crashed and bottomed at 7,570 in 2009. It only recently made it back to 30,000 after a 30-year recovery.\nYou don’t want to short a bubble because if momentum continues, you can lose a lot of money being right. There’s usually plenty of money to be made on the way down once the bubble bursts. Still, there are certain indicators of a market nearing a top that are more reliable than others.\nOne such indicator is called “distribution” by Wall Street insiders. It refers to a process of insiders and banks dumping stock on unsuspecting retail investors. The retail investors often don’t have access to the best deals, such as IPOs, so they snap up any such Wall Street offerings readily.\nLambs to Slaughter\nLittle do they know that the insiders see the crash coming and are dumping high-priced stocks on the little guy so they can escape the collapse with profits in hand…\nYou’ve probably heard of Robinhood by now. Robinhood is an online trading platform available as a mobile phone app that is favored by many retail investors, especially first-time traders and millennials using government handout checks to place leveraged bets using options.\nRobinHood has announced that their platform will now be available for IPOs, which are among the most prized offerings and often soar in price on the first day of trading.\nBecause of that first-day dynamic, Wall Street generally keeps the IPO allocations for their most favored clients, especially large institutions. If IPOs are now being distributed to small retail accounts, it means that the Wall Street banks don’t expect them to perform particularly well.\nThey just want to get the IPOs done so entrepreneurs can get rich, and the banks can collect fees. If retail investors get burned, well that’s just too bad for them. Distribution is most common near market tops.\nAnd that may be just where we are right now. It’s a good time to reduce your exposure to equities and increase your cash holdings.\nThere will be plenty of opportunities to profit on the way down.\nAgain, I’m not definitively calling a market top right now. But it’s better to get out a little too early than a little too late.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"comments":[{"id":3976425,"gmtCreate":1617769505706,"gmtModify":1680783148370,"authorId":3572249185724220,"author":{"id":3572249185724220,"idStr":"3572249185724220","authorId":3572249185724220,"name":"xoxoll","avatar":"https://static.tigerbbs.com/8ed65c2962af2a6fbd414f4d6fe9e378","vip":1,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[]},"repliedAuthorId":0,"objectId":341998987,"type":1,"supId":0,"prevId":0,"content":"Help Me like and comment ","text":"Help Me like and comment ","html":"Help Me like and comment "}],"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":42,"commentSize":11,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false}}