Up until recently, the website of Archegos Capital Management, the firm behind a reported $30 billion financial firesale that is battering stocks worldwide, contained a giant image of Central Park. The vista displayed on Archegos’ webpage was a fitting homage to the views of its offices atop a Manhattan skyscraper on 57th street, until the site was taken down as the firm gets liquidated.
Archegos was a giant in U.S. financial markets, apparently holding tens of billions of dollars in securities, including massive exposures to companies like ViacomCBS, Discovery Communications and Baidu. It traded with Wall Street’s largest brokerages, and was headquartered at an expensive address housing many powerhouse investment firms. But when it came to routine financial disclosures, Archegos was virtually non-existent.
(Bloomberg) — Back in May 2016, Japanese mega-bank Nomura, announced that it had suffered its biggest-ever loss in history (of a rather tame by Western standards $40 million) from a single client, and which it then quickly blamed on an “incompetent” bond trader. Fast forward to today, when Nomura just suffered a far, far greater loss from a single client, this one is anything but boring.
Early on Monday local time, Nomura Holdings said it may have incurred a “significant loss” arising from transactions with a U.S. client.
Bei Hu, Gillian Tan and Drew Singer, 27 March 2021
(Bloomberg) — Goldman Sachs Group Inc. liquidated $10.5 billion worth of stocks in block trades on Friday, part of an extraordinary spree of selling that erased $35 billion from the values of bellwether stocks ranging from Chinese technology giants to U.S. media conglomerates.
The Wall Street bank sold $6.6 billion worth of shares of Baidu Inc., Tencent Music Entertainment Group and Vipshop Holdings Ltd. before the market opened in the U.S, according to an email to clients seen by Bloomberg News.
That move was followed by the sale of $3.9 billion of shares in ViacomCBS Inc., Discovery Inc., Farfetch Ltd., iQiyi Inc. and GSX Techedu Inc., the email said.
Without trust, markets break down. The U.S. dollar is a fiat currency, which means that its value is derived from the trust we ascribe to our government; as that trust wanes, Americans turn away from traditional financial institutions. During the 2008 financial crisis, many everyday Americans, unsure of who to trust, took their money out of banks en masse. Large commercial banks began to fail; by 2012, almost 450 banks had collapsed. Today, deep into a historic pandemic and recession marked by political division, Americans’ trust is waning again.
On Jan. 27, a group of amateur traders helped push the stock of struggling video game retailer Gamestop to a price of $347 per share. Alarmed, financial experts took to the air to warn against what Alan Greenspan, former chair of the Federal Reserve, calls “irrational exuberance” — an unreasonable, optimistic view that the market will keep rising. Jim J. Cramer ’77, host of CNBC’s finance show “Mad Money,” was of those exasperated experts — “People begin to think, ‘Are prices real?’” he exclaimed on the air. Continue reading “Article: In Cramer We Trust”
Gary Gensler (born October 18, 1957) is an American academic, former investment banker, and former government official. Gensler leads the Biden–Harris transition’s Federal Reserve, Banking and Securities Regulators agency review team. He is also a professor at the MIT Sloan School of Management.
Gensler previously served as the 11th chairman of the Commodity Futures Trading Commission, under President Barack Obama, from May 26, 2009 to January 3, 2014. He was the Under Secretary of the Treasury for Domestic Finance (1999–2001), and the Assistant Secretary of the Treasury for Financial Markets (1997–1999). Prior to his career in the federal government, Gensler worked at Goldman Sachs, where he was a partner and co-head of finance. Gensler also served as the CFO for the Hillary Clinton 2016 presidential campaign. Continue reading “Official: Gary Gensler”
Richard K. Crump Richard Crump joined the Federal Reserve Bank of New York in 2009. His research interests are in Econometric Theory and Financial Economics.
He holds a Ph.D. in Economics and an M.A. in Statistics from the University of California at Berkeley, along with a B.S. in Economics from MIT. Prior to graduate school he worked as an Associate in the US Economic Research Group and the Global Markets Research Group at Goldman Sachs.
In the last few days, Goldman Sachs has lost two very senior executives from the investment bank’s two biggest bets on the future – consumer finance (Marcus) and wealth-management – and now, the behemoth’s chief lawyer is abandoning ship.
Henry Merritt “Hank” Paulson Jr. (born March 28, 1946) is an American banker who served as the 74th United States Secretary of the Treasury from 2006 to 2009. Prior to his role in the Department of the Treasury, Paulson was the chairman and chief executive officer (CEO) of Goldman Sachs..
He served as Treasury Secretary under President George W. Bush. Paulson served through the end of the Bush administration, leaving office on January 20, 2009. He is now the chairman of the Paulson Institute, which he founded in 2011 to promote sustainable economic growth and a cleaner environment around the world, with an initial focus on the United States and China. Continue reading “Banker: Henry Paulson”
At the House Financial Services Committee hearing last week on the GameStop debacle, there was an elephant in the room: naked short selling.
Short selling, effectively betting that a stock will go down, involves a trader selling shares he does not own, hoping to buy them back at a lower price to make money on the spread. The trader is supposed to locate (or have a “reasonable belief” he can locate) or borrow the shares in brokerage accounts, and then transfer them to the buyer within two days. This accounts for as much as 50 percent of daily trading. Continue reading “Article: The GameStop Mess Exposes the Naked Short Selling Scam”
The problem with the modern economy, Byrne says, is that it rests on the whims of our government and our big banks, that each has the power to create money that’s backed by nothing but themselves. Thanks to what’s called fractional reserve banking, a bank can take in $10 in deposits, but then loan out $100. The government can make more dollars at any time, instantly reducing the currency’s value. Eventually, he says, laying down a classic libertarian metaphor, this “magic money tree” will come crashing down.