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finance
2 Hedge funds go bust. Archegos borrows from 6 banks on the same collateral. Game stop shorted 120% and gets squeezed.
submitted 3 years ago by ImHereForFinance from self.finance
This is reminiscent of the 2008 housing crisis where individuals who were not credit worthy were given mortgages. Further the ridiculous risk taking behaviour is vulnerable to a great deleveraging. How many more funds like Archegos are out there?
[–][deleted] 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 0 fun2 insightful - 1 fun - 3 years ago (0 children)
Pretty much all of them, plus the banks themselves. This situation makes 2008 look like nothing in comparison.
The problem with this stuff is that banks, when they lose money, tend to want to seize the property they offer loans against.
[–][deleted] 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 0 fun2 insightful - 1 fun - (0 children)