Well, If my smooth brain is on to something, I speculate that someone took out Archegos Capital. Now hear me out first, there’s some dots, and second I’ve connected them, and third; they make shapes. I think astrology was on to something about connecting dots.
And boy, Have I connected a lot of them.
First and fore most,
And as always, this is pure speculation.
And I live in a world of it;
Anyways, time for the rant;
Archegos Capital a past look
Lets talk about a thing in the past, going forward.
Archegos Capital is a bullish Hedge Fund that has been accused of Short Squeezing speculators on GSX, after the entire market, AND China, tried to short GSX due to allegation of it being a fraud. Or so says Carson Block of Zeroes TV.
Hell this article here even says the company was a LITERAL fraud;
So allegedly, Archegos squeeze the balls on the bears on this, including Citron and others. A lot of bears too. But Archegos doesn’t have it in their 13-F.
(a 13F is a filing for hedge funds and banks and stuff that own a good chunk of shit/shares in the public markets. Basically the SEC is a public shit post forum where Hedge funds and banks have to make shit posts on what they own. Among other things).
Think of it like when you take out a mortgage loan to buy a house. Sure you ‘own’ your house and can sell it for a higher value, but the mortgage company gets your house as collateral should you fail to pony up.
Basically, in this case, The Banks owned the shares on behalf of Archegos through these financial derivatives. So guess who reported the shares in the 13F?
The banks got to see a return, they felt like Archegos knew what they were doing. So they would feel more inclined to keep lending to a good customer. I mean, money matters and the bottom line profits don’t lie if the realized gains are in your balance sheets. So of course the banks liked this.
However, this short squeeze would undoubtably build animosity against Archegos, for making the better value judgment play.
By play, I mean the play on playing speculators on a sham of a company. Because speculating speculators and winning makes speculators look like idiots and losers.
Why bet on the game when you can gamble on the betters and be better. lmao.
Now keep this in mind moving forward;
Bill Hwang and allegations 2012
This is just some background fluff to help paint a picture that this guy is ‘probably’ not as innocent as you think.
Bill Hwang who was founder and in charge of Archegos Capital had some lawsuits filed by the SEC in 2012.
He was charged for Insider Trading, Front running trades, and some other stuff.
He denies it, and we all know how the SEC gets its way because they literally use their own court system, judges too. So Bill was barred from trading until 2020.
Yet, that didn’t stop him from managing assets indirectly. Lmao, wut.
Yea, so this dude gets ordered to stop and finds a work around to allow him to keep trading.
Philanthropy with Grace and Mercy Foundation 2006
I haven’t written my hit article on why I think donations and charity are scams for tax laundering purposes, but that’s what I personally believe.
That something fishy is going on.
So Bill here, was according to Wikipedia, a Co-founder of this 503(c) non profit organization;
Yet what strikes me as odd is that the foundation had $500 million USD in assets. If one thing pops up to make me question things, it’s that a non-profit has a lot of assets.
So I did a little digging in their filings;
So they are a non-profit 503(c)(3) with tax exemptions as long as they follow some stipulations for being such an entity;
So in theory, you could have a public shareholder or the organization itself could have a payroll that benefits people or persons. I’m not a lawyer and I got cereal box tops for certifications, but that would be a loop hole that someone might use to work around tax evasion.
I also dug a bit deeper into their actual financial reports and for some reason, they don’t have their 2019 or 2020 filings. Maybe because they don’t have to publicize it or something. Idk. But it’s not there.
anyways, as of their 2018 990PF, I can confirm that they did have about $500 million in Assets;
They also have some investments, being able to turn $50 Million in to ~$100 million, which is a pretty amazing Year-over-year rate of return (%100) profit for a non-profit charity organization;
I also find it interesting that this non profit organization would invest in stonks, about ~$50 Million dollars worth;
(To be fair, most large wealth funds and non profits would be smart in diversifying their investments in assets to hedge risks of inflation and other bullshit. But I dislike charities in general, so me no-likey)
Those Swaps definitely aren’t no fucking hedge, that’s a straight up speculative gamble. So this non-profit is doing a little more than ‘hedging’ their portfolio and assets. I mean, they’re making money in these investments even though they lost money on those swaps.
Anyways, Bill goes on their youtube to say how his investment strategy comes from god,
So the downfall of Archegos is either God smiting him, the devil’s work, or some other nuanced non-divine thing. Idk, I’m not allowed back on holy sites since the Holy Water incidents.
(I was trying to sell some holy water and this dude flipped my table and cursed me out. Followed by his entourage of disciples or whatever. Jeez, I’m just trying to make money)
Some background on the organization;
This organization (The Grace and Mercy) is based in New York, there seems to be little to no information on their website. https://graceandmercy.org/
Their YouTube page is very directed towards the Korean audience, So I think this might be a heavily Korean influenced Church/organization. Which means that there are connections with Korea.
What I’m saying here is, maybe this is a Korean Non profit that is funneling money into Korea, for possibly tax evasion purposes, on top of being a non-profit in America, which also has some tax advantages.
I mean, I haven’t heard of the IRS going to Korea to audit a non-profit group or what constitutes their expenses.
I do want to take a note that I did go through their filings and this organization did donate a bunch of money, about $16 million, to a lot of non-profit organizations throughout the world. You know, I don’t want to incur the wrath of god. So they had about $100 million in investments and $16 million in donations/grants.
So they are doing good, its just that they have this large amount of cash at around $380 million ish that isn’t investments or donations. Just some temporary cash investments.
What I think happened here is that Bill used this non-profit organization to help leverage his Archegos Capital, and proceeded to donate his Archegos earnings to this non-profit and then re-leverage it. All the while taking tax deductions and tax advantages for donating to a non-profit and being tax exempt and stuff.
It’s a typical and common thing.
It also could be a work around to that 2012 SEC ruling to prevent him from dealing with the markets. But he somehow managed to work around that with Archegos. So I don’t know what happened there.
This is just speculation, but it would be more solid if we had those 2019 and 2020 filings.
And Again, to not incur the wrath of god, I’m not saying that this non-profit organization specifically is a scam. I just personally believe all non-profits are scams. But that discussion is for a later date.
The big take away here, is that Bill and Archegos had some financial backing with possibly $500 million dollars here. That they could use to possibly post as collateral. Maybe, I’m (again) speculating.
The Risky Not-Safe-Bets Archegos Capital took
Well, Archegos had made their bones and owned something like 500 Million in Assets under Management (AUM). They somehow convinced other people to give the loans for about 10x that. Billions lmao.
They ended up going to other banks and also getting similar loans staking the same collateral. They did this at least 8 times.
So he basically posted the same amount of collateral to get several loans for financial derivatives. Imagine using your home as collateral for 8 different loans, that’s what Bill did here.
Bill Hwang of Archegos Capital, got approval from many prime brokers and investment banks, for the sake of this article, I’m going to use the number 8 to represent his leverage and similar deals with 8 different banks. (these aren’t exactly accurate translations to leverage, just simplified until real numbers are out). Here are some of the Prime Brokers/Banks;
Bill did this to own ‘long positions’ in Archegos, dealing with these contracts, he was able to amass a ~$10 billion position in Viacom. Staking similar collateral and taking out a ‘loan’ of shares in Viacom.
The Banks here knew what was going on. Mainly because the banks bottom line was making money, and if someone wanted to borrow your shares to go long and make money, then your shares would also go up in value, thus you too would make money.
The Banks want money, and they allowed this lending to Archegos to get their money.
Well, atleast until Viacom announced a stock sale and everyone and their mother’s analysts decided to down grade the stock.
The value of the stock plummeted,
8x leverage means it goes up by 8 times, and goes down by 8 times. It’s a multiplicative factor. It works both ways.
So Archegos felt the plummet by however much they were leveraged by, which meant their portfolio dropped a fuck-ton.
Resulting in them being margin called by not one, but 8 fucking banks.
Of course, they don’t want to pull the rug too quickly, because they knew everyone had their hand in the pot. So they wanted to peacefully negotiate a happy ending. Like civilized adults, but the bankers all had the denotator to a bomb that risked billions of dollars.
Archegos Gets Margin Called
Alright, so the banks all knew that they had a stake in Archegos and they couldn’t just simply liquidate his positions or else that would be a net negative for everyone’s positions. Banks like to play “banksies” with other banks, so they want to make sure everyone makes money. A win-win.
On Thursday March 25, 2021; So the banks all got together and had a meeting on how to move forward and appease everyone with a stake.
But Bill Hwang was not letting up, he refused to liquidate his other positions to cover his margin call.
Which promptly pissed off the banks.
So the Banks didn’t like Bill’s attitude or the cut of his jib. So those banks exercised their contracts, margin called em, to reclaim their shares and dump them in a block sale. LMAO, talk about getting fucked.
The Banks knew Bill had the same overleveraged positions in Viacom with other stocks. So Morgan Stanley, Deutsche, and Goldman Sachs took back their shares (via margin call) on their contract and dumped them on the other stocks. The ones Archegos also had 8x leverage on. (Including Discovery)
Yea so he went from 8x leverage (-3 from JPM, Deutsche, and Goldman) to 5x leverage in these stocks. When JPM, Deutsche, and Goldman dumped their shares in block sales on Friday March 26, 2021, Archegos felt the 5x leverage on the down swing for ALL of those positions.
Seriously fucking him up, lmao.
Later Nomura and Credit Suisse exited a bit too slow on March 26th, so they got left holding some of the bag. Ultimately, every margin call made it more painful for Archegos, this down swing would feel like 3x.
Somewhere, I forget the time, but UBS exited. Archegos felt the 2x.
Wells Fargo later did a block sale as well on Monday March 29, 2021. One of the slowest ones to pull out their stake, they got stuck holding a bigger bag of doo-doo.
On a side note, the other banks might be upset at JPM, Deutsche, and Goldman, but bottom-line is, money money money. So I’m sure JPM, Deutsche, and Goldman didn’t burn any bridges, and if they did, they’ll build new ones with money money money.
So basically the Banks did a ‘bank run’ on Archegos’ shares, lmao, talk about a twist and a play on words. The Banks were running to themselves to cash out on their client before the client tanked. That’s fucking gold.
Anyways, these 8 banks stand to lose somewhere upwards of 10 Billion dollars in losses, and the dust is still settling.
The Small takeaway here is that a small no-named Hedge Fund could trick at least 8 banks into risky leveraged options with little to no vetting process. Which means how many countless “small” Hedge Funds are doing the same thing? There sure are a lot, a lot, a really lot, of Hedge Funds out there. . .
Would be a shame if there was a mass margin call of a lot of hedge funds over leveraged Financial derivatives and re-hypothecated positions due to a black swan event. As a side note. lmao.
If they allowed it in one place to a small Hedge Fund, imagine what they’ll allow a very large Hedge Fund to get away with.
Discovery; Could Citadel and/or another short seller whack Archegos?
You know how Citadel is a short seller and how I’ve written a few pieces here about CNBC being pushing out market manipulation?
Well, turns out, after the initial GME craze (still ongoing), CNBC pushes people to invest in Discovery.
Well, some people have a few words with regards to Discovery and Viacom. Also for reference, Jim Cramer is a media personality that promotes information and works in tandem with CNBC, so the references below speak with Jim and CNBC as a group.
Discovery had a great bull run during the start of the year, it was also a Stock that Archegos Capital invested in.
Archegos pissed off Short Sellers with GSX, and that includes Citron Research.
Citron Research before it got slapped straight, was in bed with Short Sellers including Citadel.
Archegos is a Bull.
Citadel is a Bear.
See what I’m trying to say here?
Yea, what a coincidence that these two Companies were heavily shorted as data here shows on March 10th.
Letme zoom that in for your eyes only,
The fall of one Hedge fund was for a benefit of another. Possibly. The current regulations don’t report short positions so It’s not clear who did it. But I think that Citadel might have been the ones behind the death of Archegos in Discovery and possibly capitalizing on Viacom’s Stock dilution using the same tactic that Archegos took but on the short/sell-side of the trade.
It’s just convenient.
So COINCIDENTLY on the SAME DAY of Viacom’s plunge, Discovery also has a plunge. March 22nd. Followed by a Sell rating from analysts at UBS on the 23rd.
I’m speculating that someone shorted TF (the fuck) out of Discovery and Viacom the day of the (probably planned) media release, then closed their short position that day to recoup some money, to then use as collateral to re-re-hypothecate some share to short GME. This of course, is speculation.
All I’m saying is, there is a buy side and a sell side. Your tricks for buying can also be applied for selling. So Over Exposed Archegos got Rekt. Possibly by the same tactic they used to make their money. A leveraged trade deleveraging another leveraged trade. Scary stuff when you play with that margin.
But I ain’t no bitch, and my mom didn’t raise me that way.
MARGIN YOLO ONLY.
lmao, joking but not joking.
An even deeper speculatory thought is, if the banks knew of Archegos over leveraged position as a bull. . . How much would that information be worth to a Bear who could capitalize on such over-exposed, over-leveraged, easy money? Could someone who knew of someone’s financials, tip off their competitor to capitalize on this? Especially a Bear with deeper pockets that can take out a small family hedge fund like Archegos.
Could someone put the Hit out on Archegos?
The Banks would look like the victims, Archegos would look like a villain, and people would be none-the-wiser to which heralded ‘Hero’ saves the day by exposing Archegos. . .
Think about it. . .
Also if true, you could make the argument that the market is working as intended. Survival of the fittest. It just so happens that Archegos was over leveraged, over exposed, and way out of their lane, like a Jungler deep diving into the enemy team while their teammates are still respawning. (Moba reference)
And don’t worry about the banks, they’ll just write this as a loss and chalk it up as some underwriting bullshit for tax purposes. So the only thing they really staked was their reputation, but I mean, a lot of them were in bed with Archegos on this one. So, poor victimized banks, boo-hooo.
Oh, also, some beautiful ape connected some dots between the Fall of Archegos and the On Balance Volume of GME;
So, maybe it’s not a coincidence and maybe speculation is on to something. . . maybe.
Allegedly this happened
The article says that Morgan Stanley sold stocks before close of business, probably after the round table meeting behind closed doors if I were to guess.
I didn’t include it, because it’s a bit of hear-say and doesn’t really effect the narrative I’m trying to spin. Yellow journalism baby.
So maybe they did, maybe they didn’t. Worth noting at least. Noting that maybe Morgan Stanley pulled their cards first. Which could make them possibly complicit in some sort of conspiracy to take down Archegos, or maybe they are just an innocent bystander.
Regardless, it seems clear that someone tipped off a short seller here, exposing the cards of a poker game, resulting in the bear raid.
Moving forward Lessons learned;
Alright, regardless of who curb stomped Archegos, let’s learn some lessons from this.
Maybe we should vet and do background checks on companies, and not think that they’re good for several billion dollar loans because other institutions had ‘checked’ them already.
Maybe someone shouldn’t be able to post the same collateral several times to re-leverage the same assets and be able to shit out billions of dollars in loans. Also applies to re-hypothecated/re-re-hypothecated shares.
Maybe we should have short positions be required to file and be reported more often instead of hiding in the dark like some sort of swindling assassin. It’s clear that someone took a hit out on Archegos. A Feud where one gained billions and one lost billions.
Maybe you shouldn’t fucking yeet your money in a stock to artificially drive its valuation up, realizing that the market and even the company itself would take opportunity to take advantage of its high valuation. (Viacom issued a stock sale to take advantage. Also the ‘overvaluation’ attracted shorts and cause short interest to go up. By short interest, I mean literally interesting to the shorts. Don’t aggro bears)
Don’t Aggro Bears
Don’t Aggro Bulls
Don’t Aggro Wolves, Sharks, and Whales
Wut Uther animals are there, lmao. Don’t fuck with the Zoo of Wall Street.
Maybe banks shouldn’t be greedy into trying to milk a cash cow in way overleveraged financial derivatives that can’t support the underlying collateral?
Idk, I’m just some random asshole on the internet, what the fuck do I know?
Update as of 4/16/2021
It could very well be possible that Tiger management might’ve also been behind the hit of their own tiger cub. The nail that sticks out kind of thing. I don’t have the motives down but it remains a possibility. Motives are usually money, so that could be a thing.
Also, as a possibility, whoever took the hit out on Archegos has left naked and looking silly. Embarrassing a lot of big banks. This no doubt will make the banks probably seek revenge. In which, I wouldn’t be surprised if they start doing something.
The world of financial networks its an unfathomable battle field, and It’s way more complex than 5D chess. So, this battle is part of a larger war and we’ll see a crescendo in the coming years. Maybe even in a couple days. Who knows, lmao, no safe bet.
I don’t personally blame Archegos for what they did, but they made a bet and lost. So you gotta pony up.
I also don’t think Archegos did anything blatantly illegal, it seems they followed the proper tax codes and provisions (and loopholes). I am curious to see what the 2021 990PF on Grace and Mercy looks like. That’ll be juicy. Might have to wait a few years. Guh.
I am speculating, but someone definitely took a hit out of Archegos Capital. Burn a few bridges, and pissed off some bears for them to lay a bear trap on ya. (It might not be Citadel, but whomever it was is strongly-likely a short seller on GME)
There was no real reason for Discovery to tank, unless of course someone knew Archegos was attached to Discovery. Then that someone also wanted to take advantage of Archegos balancing on the knife’s edge, and tip them over with a simple short (attack) push.
But due to the nature of financial derivatives, Archegos didn’t have to file a 13F to report their positions.
So who tipped off whom? There’s probably a traitor amongst these banks that probably violated financial disclosures.
These banks might look like the victim, but that’s what the media wants you to think.
Everyone here are wolves and sharks, the drop of blood is cash money.
Remember, there are no friends on wall street.
*Not Valid, Financial, Legal, Life, or Any Advice