Why Goldman Unsurprisingly Avoided Archegos Losses

It looks as if Goldman used the Archegos discussions to obtain a clear view of the group’s exposures while retaining the freedom to act. They would have considered their market risk as well as any legal/reputational downside from moving quickly. As skilled risk managers, they quickly decided that your first loss is your best one and sold. Credit Suisse and Nomura discovered they were playing poker at the wrong table.

Credit Suisse is estimated to have lost $3-4BN, and Nomura $2BN. As Warren Buffett has said, if in a poker game you don’t know who the patsy is…

Last Tuesday, Goldman downgraded Nomura’s stock. They noted, “market concerns around risk management issues may persist.” It’s unlikely Nomura will find cause to reciprocate.

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Disclosure: We are invested in all the components of the American Energy Independence Index via the ETF that ...

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William K. 1 month ago Member's comment

Indeed interesting! And certainly those who play fast and loose with the rules will eventually be caught, although by who is a variable. It is also clear that some organizations cultures are devoid of integrity, (I will not name names here). At some point the truth will be revealed. And at some point judgement day will arrive, perhaps sooner for some than for others.

Flat Broke 1 month ago Member's comment

The problem with Wall Street is the punishments for bad behavior tend to be a monetary slap on the wrist. One that is a fraction of the money made or saved from the bad behavior. Thing about how Wells Fargo got away with stealing money from it's own customers. Or how Google was fined a mere $13 million for stealing user data that they made billions of off.

If the risk outweighed the rewards, we'd see a far more well behaved Wall Street. Or if they were threatened with jail time, that might help too.

William K. 1 month ago Member's comment

F.B. Certainly you are correct, unfortunately taking away every cent of the profit would be regarded as "cruel and unusual punishment" and so the bad actors do get away with their evil ways. Of course, if I were elected King things would be different. That is not likely to happen here in the USA. Plus, I do not even want to be king.

Alexis Renault 1 month ago Member's comment

What exactly happened with Archegos?

Adam Reynolds 1 month ago Member's comment