Re:Bill Hwang of Archegos Capital lost $20B in two days
by paxys on Wednesday May 12, 2021 @01:35PM
(#27132951)
The justification is that going from $50B to $5B isn't as bad as going from $50K to $5K.
If people don't have money to eat or pay rent then it's a larger societal problem. Beyond that, you are on your own.
Re:Bill Hwang of Archegos Capital lost $20B in two days
by ALittleLight on Wednesday May 12, 2021 @01:44PM
(#27133065)
I don't get it. You can go bankrupt without any leverage and definitely with 2:1. I could just put 100% of money in options and lose it all.
Re:Bill Hwang of Archegos Capital lost $20B in two days
by dragonwriter on Wednesday May 12, 2021 @01:51PM
(#27133159)
> You can go bankrupt without any leverage
You have to borrow something to have a debt that cannot be repaid.
Agreed.
> There is nothing inherently wrong with being extremely leveraged, as long as you are prepared for the outcome. This is why the common joe does not have access to such investments, but accredited investors do.
The downside of an overleveraged investment will affect the "common joe" - given that, what justification is there to allow hedge funds to do it? They receive all the upside, but not all of the downside.