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Strategies & Market Trends : Technical analysis for shorts & longs

SPY 680.44

+0.6%

Dec 19 4:00 PM EST

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To: Johnny Canuck who wrote (53824)	3/29/2021 8:17:00 AM
From: E_K_S	Read Replies (1) of 69126

Archegos Capital was forced to sell more than $20B in stocks on Friday ARCHEGOS FALLOUT: "IT'S CLEARLY NOT NORMAL" (1110 GMT) Like Nomura did earlier, Credit Suisse is paying the price for the Archegos fallout and is now down about 15%. How much did the Swiss lender lose? It's unclear, estimates ranges from at least $1 to 4 billion which in any case is big blow and begs the question of what went so wrong. "If the figures one can read about Credit Suisse are accurate, there is clearly a big risk management problem", Jérôme Legras, head of research at Axiom Alternative Investments just told us. "The size (of the losses) is surprising, it's clearly not normal, liquidation of funds happen, it happened in the past and it will happen again but a liquidation with such huge and clearly uncovered positions on which banks end up with such a position is clearly unusual", he added. How did the collateral fail to cover so much of the losses? Also unclear but it seems Nomura and Credit Suisse got stung extra by acting later than Goldman Sachs and Morgan Stanley. "One also has the feeling that the banks didn’t all act at the same time and that the first which acted made their way out while the others were left to pick up the pieces", Legras added. The fire sale also echoes the market price action triggered during Gamestonk when short seller had to quickly sell long positions in U.S. IT and tech shares to cover their losses. "In general one has the feeling that there has been a few recent episodes of abnormal market behaviour linked to fire sales", Legras also commented.

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