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The Leverage Trap That Cost Credit Suisse $5.5 Billion

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Ever borrow so much money that Wall Street starts sweating? No? Bill Hwang did. In March 2021, Archegos Capital Management collapsed in one of the most dramatic Wall Street trading disasters of the decade. Behind the firm was Bill Hwang, a former hedge fund manager who used leverage, derivatives, and total return swaps to build massive exposure to stocks including ViacomCBS, Discovery, Baidu, and Tencent Music. When the market turned, Archegos could not meet margin calls. Banks rushed to unwind positions, triggering billions in losses across Wall Street. Credit Suisse lost about $5.5 billion, Nomura lost around $2.9 billion, and other major banks including Morgan Stanley and UBS were caught in the fallout. This video explains how Archegos collapsed, how total return swaps worked, why leverage became deadly, and what the scandal reveals about risk management, hidden exposure, counterparty risk, concentrated positions, prime brokerage, and Wall Street incentives. If you enjoy stories about market crashes, hedge fund blowups, famous trades, banking collapses, financial crises, trading disasters, and bizarre moments in financial history, subscribe to Wall Street Untold Stories. --------------------------------------------------------------- Chapters: 0:00 Cold open 0:26 Intro — the quiet firm that shook Wall Street 1:13 Chapter 1 — Bill Hwang’s second act 2:28 Chapter 2 — the hidden machine 3:35 Chapter 3 — the trade keeps working 4:32 Chapter 4 — the market turns 5:42 Chapter 5 — the bill arrives 6:39 Chapter 6 — the aftermath 7:37 Final lesson — risk hidden is not risk gone 8:24 Outro

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