Three Arrows Capital has defaulted on a loan worth more than $670M

Re:Three Arrows Capital has defaulted on a loan worth more t... by mirntyfirty on Monday June 27, 2022 @12:17PM (#31896716)

I think it’s a strange part of human psychology to ignore objective reality and double down to complete ruin. It seems remarkably common and with corporate power being so concentrated at the top it seems rather easy for these situations to happen.

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Re:Three Arrows Capital has defaulted on a loan worth more t... by wjko21 on Monday June 27, 2022 @01:25PM (#31897762)

I think the reason is that safety nets our system provides to big businesses (especially "too big to fail" ones) incentivizes them to take risks. If you have a 50/50 chance to strike gold or loose tons of someone else's money, why not take it. If it pans out, you get a lot of bonus $$$, if it doesn't - it's no skin off your back.

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Re:Three Arrows Capital has defaulted on a loan worth more t... by gopher_space on Monday June 27, 2022 @04:00PM (#31899976)

I see this in my industry. Above a certain level there isn’t really a failure state that matters to an individual.

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Re:Three Arrows Capital has defaulted on a loan worth more t... by chasd00 on Monday June 27, 2022 @02:03PM (#31898283)

Yes, it’s the throwing good money after bad problem. I think there’s a real name for it, “sunk cost” fallacy maybe?

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Re:Three Arrows Capital has defaulted on a loan worth more t... by rchaud on Monday June 27, 2022 @04:52PM (#31900629)

I'm thinking "lender of last resort"

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Re:Three Arrows Capital has defaulted on a loan worth more t... by dropnerd on Tuesday June 28, 2022 @04:07AM (#31905340)

most crypto trading firms have been rewarded for this behavior over the last few years, so the lesson is hard to unlearn

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