The full postmortem on Archegos Capital won’t be written for a while, but one thing is already clear: This little-known hedge fund run by a trader named Bill Hwang has become the latest lightning rod for Wall Street greed run amok.
Greed may indeed be one of the backstories to this seemingly harmless “family office” (sounds quaint, doesn’t it?) run by an obscure money manager who appeared to come out of nowhere to become one the biggest fish on Wall Street.
But as regulators unravel the Archegos “mystery,” and get a fuller understanding of Hwang’s implosion, they will determine the root causes are far less complex than those mysterious stock swaps Hwang relied on to make his bets.
In fact, Wall Street greed may be just a byproduct of something bigger and more sinister: A Federal Reserve led by Jerome Powell that has been subsidizing such avarice well before the pandemic made zero-percent interest rates a way of life.
— VIX Squared (@vixsquared) April 5, 2021
Extreme leverage in a hypervalued market is nothing to worry about, Ben.
See, there's an enormous amount of cash on the sidelines, and if people put that cash into stocks, the cash vanishes and, like, becomes stocks, and like, it's all in a big jar somewhere. So it's ok. t.co/anplQWBjLU pic.twitter.com/s3tqHiFhA8
— John P. Hussman, Ph.D. (@hussmanjp) April 5, 2021
Behold the record in IPOs and Secondary Offerings pic.twitter.com/FkJApRW4vv
— Not Jim Cramer (@Not_Jim_Cramer) April 1, 2021
A picture of the steady rise and spectacular collapse of Archegos Capital.
Maybe, they should have called the fund Icarus! t.co/7qCEFqG9Hx
— AnilVohra1962 (@AnilVohra1962) April 5, 2021
ARK’s Space ETF is now the #1 holder of its 3D Printing ETF. pic.twitter.com/xctHT8IrKR
— Keubiko (@Keubiko) April 5, 2021
Spreads on U.S. junk bonds have fallen to the lowest since 2007. pic.twitter.com/DWSujBeVZS
— Lisa Abramowicz (@lisaabramowicz1) April 5, 2021