This is my first post (ever), so if I am going about this wrong or think Wendigoon won't ever cover this, call me out. I don't think he will to be honest, but I wanted to pitch it to a community I have been a part of for a while. I have been watching Wendigoon for a few years and Monument Mythos is my favorite series.
Now the pitch! To start off this will get into the weeds a bit, but I will break it down. Archegos Capital Management was a private investment firm that collapsed in early 2021 because of high risk investing and the overuse of Total Return Swaps. The owner, Bill Hwang, called the firm a family office as a way to avoid regulatory scrutiny and hide his positions. At the time of collapse the firm held roughly $160 billion in exposure and owned $35 billion in assets, yet only had around $1.5 billion in real cash.
The reason for the collapse was centered on Total Return Swaps. Here's how they work: I am Mr. Hwang- I tell a bank I want a position valued at $100 and offer up $20 for initial margin. The bank takes my money, buys $100 of stock, and pays me the difference as the stock price rises. If the value of the investment goes to $120, I get paid $20 minus interest back to the bank.
In 2019 he convinced investment banker Credit Suisse to lower his margin requirement from 20% to 7.5% going from 5x to 13.3x leverage. NOW... scale this up to billion dollar bets with only tens of millions backing them and you have a huuuuge problem that ultimately led to the collapse of Archegos.
I don't want to write too much now, but basically the full pitch would be detailing how the Total Return Swap racket was never patched and how the use of synthetic leverage for manipulation and overleveraging in our markets has grown to a point that is both dark and deeply concerning. Unfortunately, its hard to truly make that appealing to digest but the rabbit hole on synthetic leverage goes really really deep.
If this interests you and think it could be packaged in a way to make a good story for the Wendigang channel in particular, please give it some thought!
Thank you if you read this
Credit to Hamish Hodder on yt for his video on this titled-
The Most Violent Trading Loss in History