The Lemon Fool

Bill Hwang is apparently the cause of a lot of weakness in Chinese and other stocks last week. Rumour is he has margin calls and is a forced seller of $15-$80 billion worth of stock:

https://twitter.com/DoveyWan/status/137 ... 03394?s=20

If this is the case then once his positions are taken out we may see an end of quarter rally.

Regards,

This explains a lot of the weird price movements in ViacomCBS in the last few weeks. They were $37 at the start of the year, two weeks ago they had risen 170% to $100, closing at $48 on Friday (down 27%), having been below $40.

There has been a bit of a short squeeze in ViacomCBS and, judging from the turnover, quite a bit of hot money in ViacomCBS. On some of the more excitable forums the activity at times has reminded me of the GameSpot short squeeze which was driven by the Reddit forum Wall Street Bets.

I bought some last year at $14 as a cheap play on consolidation in streaming, only to see it turn into a rocket fuelled traders plaything. Not that I'm complaining, having sold 90% of mine at $90

Things are getting a bit lively. Credit Suisse and Nomura both seem to have lent Archegos Capital quite a bit; their shares are down over 10% today.

There are reports that Morgan Stanley is trying to sell a block of 45 million ViacomCBS shares for Archegos. I gather that Archegos may have owned something like 90 million ViacomCBS (14% of the company) but had disguised its ownership using swaps. Murky

"Banks that worked with Archegos and lent it money to buy shares were scrambling to offload Archegos' investments after a handful of risky bets made by the hedge fund went bad. The rush to exit these positions hit public shares prices, leaving banks with huge losses."

https://uk.finance.yahoo.com/news/archegos-capital-credit-suisse-nomura-goldman-sachs-morgan-stanley-092127768.html

SalvorHardin wrote:Things are getting a bit lively. Credit Suisse and Nomura both seem to have lent Archegos Capital quite a bit; their shares are down over 10% today.

There are reports that Morgan Stanley is trying to sell a block of 45 million ViacomCBS shares for Archegos. I gather that Archegos may have owned something like 90 million ViacomCBS (14% of the company) but had disguised its ownership using swaps. Murky

Yes, this is all very interesting. 30% of Viacom shares were owned by broker/dealer banks to Hwang's family office firm. As a family office Hwang didn't need to file 13F disclosures. Each of the banks servicing him didn't know what credit and liquidity the other banks were providing, so his total exposure was a mystery.

Looks like the US banks were at least somewhat circumspect about the liabilities. The Swiss/German and Japanese banks, less so.

By all accounts Hwang may have lost tens of billions of dollars. The IBs took a hit. The underlying shares are well down. But the overall market appears to be taking it in its stride. But maybe family offices will now be more regulated, which in one sense is a shame as they are handy vehicles if you have the net worth.

Not sure if this is legit:

https://twitter.com/CGasparino/status/1 ... 64934?s=20

But if Credit Suisse and Nomura are still trapped in the trade and CS need to raise cash this could get interesting.

Bit of background here:

https://www.bbc.co.uk/news/business-56564717

There is plenty of re-assurance that things are well, that the losses are easily manageable, but until things are resolved it hard to know what is going on.

That there has been no end of quarter rally makes me a little nervous that bad news might be coming.

Regards,

The fall of Bill Hwang, $20 billion to all gone in 2 days:

https://www.bloomberg.com/news/features ... n-two-days

Regards,