Bill Hwang’s $ 20 Billion Fortune Wiped Out (Gamifier Wall Street Has Real Consequences)


The markets are finally emerging at the end of the pandemic tunnel … and what do the financial gods give us?

The potential for another financial crisis is what.

The unethical nature behind some of the biggest market events we’ve been through this year – including the GameStop madness and the Wall Street liquidation of Bill Hwang’s Archegos Capital Management firm this week – is once again the culprit.

Here is a brief summary of the events of the past week.

The sudden liquidation of Bill Hwang’s personal hedge fund, Archegos Capital, was caused by the fund’s creditors – believed to be Nomura Bank of Japan, Credit Suisse and Deutsche Bank – who made margin calls on Hwang’s billions in betting leveraged.

A leveraged bet means that you borrow money to buy stocks. This is called buying stocks on margin. It also means that at the discretion of your creditors, they can initiate a margin call, which means the investor must immediately cover their bets by placing additional funds in their account.

In the case of Bill Hwang and Archegos – the family hedge fund at the center of it all – Hwang has borrowed billions to make leveraged bets using complex derivatives and principles of gamification. When it became probable that his bets were not going to materialize, the banks paid off their debt. Hwang was called on margin and was forced to sell $ 20 billion in assets in multiple bulk deals last Friday.

Reports also say that this fire sale failed to cover all of its indebtedness (debt) last Friday, which is tantamount to defaulting on its loans to its lenders. That’s why Nomura and Credit Suisse both fell more than 14% until noon Tuesday.

In addition, the massive shift in ownership of money and assets has resulted in strong downward pressure. world markets.

This is the part that really bothers me. A lot of good people like you and me also feel pain, even if it has nothing to do with that action or the actions involved.

Maybe I woke up on the wrong side of the bed this morning, but it’s a Class A Iowa BS if you ask me.

Now don’t get me wrong. I have nothing against the ultra-rich. My # 1 goal is to help people like you get rich too. I want you to have a plethora of properties and a private jet. Heck, I want these things too.

Do I think any of us need (or should find a reason for wanting) five private planes? No, and when I say excessive greed, that’s as far as I mean.

And when I say things like Bill Hwang might be rich and able to buy favors from banks and regulators, but by no means do I think he’s a respectable investor, I’m not blaming the rich.

I admire people who do it the right way. Billionaires like Warren Buffett and Jack Ma are prime examples.

But I have little respect for Bill Hwang and Roaring Kitty – a guy who says he hates the big guys on Wall Street but secretly wants to be one.

And you know, what really bites my gears is the fact that I really have to pay attention to these people in order to keep our investments in the green.

The gamification of Wall Street

Wall Street’s gamification is here to stay, and we have to step up our efforts if we are to win.

the Stanford Encyclopedia of Philosophy defines game theory as “the study of how the interactive choices of economic agents produce results with regard to the preferences (or utilities) of these agents, where the results in question could not be wanted by any of the agents. “

Applying game theory to investing is called Wall Street gamification.

In truth, this story goes back a long way. Over the past 30 years, derivatives and other applications of game theory have become increasingly important in the financial world. The problem is that the increased use of these mechanisms is accompanied by increased market instability.

Those who have followed the sequence of events that created the 2008 financial crisis remember this fact too well. Derivatives amplified the damage from the 2006 housing collapse beyond fathom and in March 2008 the damage was catastrophic.

2008 Cost / Loss Crisis

My great fear at the moment is that Hwang’s reckless trading will be the first event in a series of many to tip us into yet another financial meltdown. After all, it took almost two years after the fall of the first domino in 2006 for it to manifest itself in the 2008 crisis.

Hopefully the reopening of trades and other market forces will help straighten out major indices, but I’m worried for now. Aside from selling the pandemic, I can’t recall such acute downward pressure since November 26, 2018, when the Dow Jones fell more than 12% in less than a month.

I’m not the type to worry. I just don’t trust regulators, hedge funds, or market anarchists to screw up hedge funds at all costs.

But I’m not going to let them win either. Game theory works both ways and for any player at the table.

Which brings me to my last thought for the day.

We can use game theory to beat these guys

The more people you have in your area who understand the ins and outs of how game theory works with investing, the better equipped you will be to take advantage of the new paradigms on Wall Street.

Things like The prisoner’s dilemma, which, if Hwang had any understanding, he might still have a few billion dollars in the bank.

Of course, there’s always more to Wall Street’s gamification than I could ever explain.

That’s why I hope you sign up for an upcoming webinar on April 8 to learn all about my colleague’s new game theory trading system.

You see, the big banks have invested billions of dollars to build complex trading platforms that use algorithms based on advanced game theory applications. These systems can predict market events with incredible accuracy. These systems are also how Credit Suisse managed to use its margins on Hwang before all the money evaporated, saving him billions in losses, while Hwang – one of the richest men in the world. world – lost everything.

Of course, it takes a computer genius and a market genius to create any of these algorithms.

But that’s exactly what my British colleague Ryle did. And unlike Hwang or Credit Suisse, Brit is going to show us how to use his Alpha targeting system to defeat the aforementioned bad actors on Wall Street.

I have already registered for Brit’s first webinar revealing her new Alpha targeting system, scheduled for Thursday, April 8.

I hope you will join me in the audience. The more we learn about game theory, the easier it will be to beat the streets at their own game.

You can register Here Now.

To your wealth,

Sean mccloskey
Editor, Energy and capital

follow basic@TheRL_McCloskey on Twitter

After spending 10 years in the consumer technology reporting and educational publishing industries, Sean has since been indebted to one of his original passions: identifying and leveraging the most lucrative opportunities in the market. . As the former editor of several investment newsletters, he has covered virtually every sector of the market, from energy and tech to gold and cannabis. Over the years, Sean has offered his followers the chance to score numerous triple-digit wins, and today he continues his mission of providing followers with the best chance at big wins on Wall Street and beyond. as editor for Energy and Capital..

Source link

Leave A Reply

Your email address will not be published.