The bubble pops

It looks like the post-2008 can-kicking is rapidly coming to an end:

Global banks bracing for losses amid US hedge fund collapse

World banks may lose over $6 billion from the downfall of the US investment firm Archegos Capital, sources told Reuters. Regulators are closely monitoring the situation as panic spreads about the possible scale of the fallout.

The sudden liquidation of the New York-based billionaire Bill Hwang’s Archegos Capital Management ignited a fire sale of more than $20 billion in assets that has left some of the world’s biggest investment banks bearing billions of dollars of losses.

According to billionaire investor Mike Novogratz, the collapse of Hwang’s Archegos fund could turn out to be “the most spectacular personal loss of wealth in history.”

The problems started last week when a disappointing stock sale by media giant ViacomCBS triggered devastating bank margin calls for Archegos, three people familiar with the matter said. Shares in ViacomCBS plummeted 23{3549d4179a0cbfd35266a886b325f66920645bb4445f165578a9e086cbc22d08} last Wednesday after the media company sold shares at a price that diluted its value. The shares continued to decline, setting off alarm bells at Archegos’ prime brokers and prompting them to offload stock in all of Archegos’ investments.

According to the sources, Goldman Sachs and Morgan Stanley were quick to offload shares on Friday, forestalling a material financial impact.

Meanwhile, investment banks Nomura and Credit Suisse warned investors that they were facing huge losses from their exposure to Archegos. Shares in Japan’s Nomura plunged 16{3549d4179a0cbfd35266a886b325f66920645bb4445f165578a9e086cbc22d08} and Credit Suisse dropped 14{3549d4179a0cbfd35266a886b325f66920645bb4445f165578a9e086cbc22d08} amid analyst speculations on how much money they could lose.

This time, it wasn’t different. It never is. If the media sector is collapsing, watch for the Devil Mouse to be in particular trouble, in light of the underperformance of its assets almost across the board.

But don’t worry. I’m sure Creepy Joe will be right on top of this, right? I mean, who better to skillfully navigate an economy through the treacherous shoals of a financial catastrophe than a shuffling, dementia-addled near-corpse who isn’t sure who or where he is?