Wed March 31 202
A reader wonders why the big fuss over Archegos losing money, you take chances uyou win or lose.
The answer is
how many Hwangs and leveraged funds are out there
In these swaps as the banks own the assets, any one bank has no idea of the total risk exposure of all of them, which no doubt is just what Hwang wanted
So when the margin call comes, Goldman and Morgan dump om their fellow bankers getting out first
The losses are so large Credit Suisse still does not know the extent of losses to themselves
All financial calamities have the same start, too much debt and in the end, too little collateral
You will need access to the TAMUSA library to read these WSJ Articles.
There are additional articles and diagrams on swaps but these are not on proquest.
The author makes this comment
We have to hope that banks haven't been dumb enough to allow lots of others to borrow so much for such concentrated trades as Archegos, which appears to have eschewed risk management for bets on a handful of Chinese stocks and U.S. media groups ViacomCBS Inc. and Discovery Inc.
Isolated fund blowups are exciting, but they are a spectator sport for the rest of us. The risk at the moment is that hedge funds are united in their bets in two areas: inflation and speculative technology stocks.
Hope is not a plan. Recall that it was just a short ten years ago that Goldman was so desperate for capital they had to grant Buffett a 10% preferred stock in the amount of $1 B to stay in business, Guess the GS boys have a short memory.
Past examples of banks getting themselves in trouble
https://en.wikipedia.org/wiki/Panic_of_1837
https://en.wikipedia.org/wiki/Panic_of_1907
https://en.wikipedia.org/wiki/Black_Monday_(1987)
https://en.wikipedia.org/wiki/Long-Term_Capital_Management
contributing factors this time included
elevated prices
crowded positions
derivatives
In these swap arrangements the banks own the assets so the borrower need not disclose his position as technically he has no position the bank does
But then the banks have no idea what their collective risk exposure is. Once again banks relax standards at high prices and tighten them at low prices.
Professor Elam 
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