BREAKDOWN: Corruption, Leverage and Cheap Money – Archegos and the Fastest Loss of Wealth in History
CoinDesk Podcast Network
CoinDesk
4.8 • 689 Ratings
🗓️ 1 April 2021
⏱️ 18 minutes
🧾️ Download transcript
Summary
A TL;DR on how Archegos went from betting $50B or more to having nothing overnight.
This episode is sponsored by Nexo.io.
The financial world has been rocked by the Archegos scandal. A family office managing at least $10 billion and betting with $50 billion-$80 billion on leverage that was completely undone, literally overnight.
In this episode, NLW breaks down:
- Bill Hwang’s origins in Julian Robertson’s Tiger Management
- Hwang’s conviction for insider trading
- How Hwang leveraged his fund’s performance to get off prime broker blacklists
- Why Goldman Sachs, Morgan Stanley and others decided to margin call Archegos last week
- What the whole affair says about markets today
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Nexo.io lets you borrow against your crypto at 5.9% APR, earn up to 12% on your idle assets, and exchange instantly between 75+ market pairs with the tap of a button. Get started at nexo.io.
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Transcript
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| 0:43.9 | Wondery, UK. That's audible.com slash Wondery UK. These aren't some galaxy brain-evil |
| 0:51.7 | schemes. It's just a lot of people fudging the rules just enough. |
| 0:55.7 | Acting against their better judgment, just enough. |
| 0:58.2 | Leaning into greed, just enough. |
| 1:00.3 | It's Huang potentially not really letting all these prime brokers know how deep he was with |
| 1:04.0 | each of the others. |
| 1:05.2 | It's Archegos using instruments that aren't illegal, but which certainly skirt around |
| 1:09.0 | regulatory intent. |
| 1:10.6 | And it's about banks |
| 1:11.2 | reversing course to do business with convicted financial criminals because the volume of |
| 1:15.6 | their trading has just gotten too big to ignore. It's the banality of modern corruption. |
| 1:22.5 | Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. |
| 1:33.5 | The breakdown is sponsored by nexus.io and produced and distributed by CoinDesk. |
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