 Okay, very good morning to everyone and welcome back. It is Monday 29th of March and I'm joined by Eddie to talk about one of the main headlines in the equity space this morning. And that is about ArchaCos, the family fund and the impact that that's had subsequently on the mirror and credit Suisse in overnight and European trade so far. So Eddie, how's it going and get us up to speed? Yeah, good. Been very busy, but always good to be back chatting with you. But yeah, let's get straight into it. So essentially what's happened is another hedge fund blow up. So a heavily leveraged, long short family office, basically a hedge fund. This is ArchaCos. I think we had a joke earlier, us saying it, that's going to cause some problems. I think Credit Suisse and Nomura have more problems trying to unwind this trade. But essentially this firm is headed up by a quite famous guy called Bill Huang. He's an ex-Tiger capital management trader. And he was at his firm was forced to sell 20 billion of stock this Friday. So they had big positions and names such as Viacom, Discovery, Baidu, 10 cent music that we were just talking about was down 34% last week. So this was this basically started to unravel kind of Tuesday Wednesday last week, so earlier in the week. And it's now being reported basically that Goldman and Morgan Stanley were unwinding these big blocks. And then obviously Nomura and Credit Suisse are really kind of struggling to unwind these blocks. And then as the positions fell, margin calls came in, and then ArchaCos basically, this was a forced liquidation by the prime brokers Credit Suisse and Nomura. So I mean, I know it's hard to get the exact detail on what happened here, but with hedge funds and filings, I know in previous conversation this morning, you were saying that this might not necessarily be the case for that transparency with this specific firming in question. Yeah, so this is where it gets a little bit misty is the fact that basically what's happened is the brokers have become involuntary principals here. So they own the shares outstanding on these leverage swaps. And this was to firms like ArchaCos. So when the client can't meet the margin calls, the brokers take huge losses essentially. So Nomura now owns these shares. So I'm not totally sure at the moment if it's a filing and a kind of transparency, but because there's lots of derivatives going on here, it's not immediately clear why this wasn't seen basically, because these were down like 26%, 27% on Tuesday and Wednesday in terms of the prime brokerage positions. But this has just got away from them massively. Yeah, so would this be something then? We've got a holiday short and week, you've got month end, you've got quarter end. There's a lot going on. You've also got all the employment data with non-farm still coming out on Good Friday. So this is another has this run its courses yet? Or are you looking for more, do you think, to information to come out and be potentially impactful today, tomorrow? Exactly. It always depends, right? Of course, but and it's always on a case by case basis. But of course, if we take, if we zoom out and look at the macro environment, this has always been the case, right? Macro liquidity has just been flooded in interest rates or, you know, all time loads. This is why we've seen equity markets and, you know, risk taking. Basically, this is what has been has been encouraged by global central banks and these fiscal policies being kind of injected into the market. So risk takings are all time high and leveraged, leverage, you know, in retail, right, leverage in hedge funds and institutional clients is basically at all time high. So when these positions start to go against individuals and firms, then this is where it can get really ugly. So it does, of course, depend on the kind of positions, right, in the company. So, for example, the Chinese internet companies that were involved here can be tricky to sell because there's not much institutional backing. And this has been reported by Bloomberg. Gross, gross leverage at Goldman prime was last week was an all time high. So what we can take from this is that, you know, everyone's really speculatively long, right, the markets and we've seen this. So momentum's getting hit as we've seen with the tech stocks and ARC funds and things like this. So, you know, this could be a systemic issue if things get out of hand. What we need to watch is how this position obviously unwinds and this is going to have a big impact on the indices and things like that. But it's more about gross leverage within the whole system. But then it's actually those individual firms that are, you know, leveraged to the to the eyeballs basically and position that way that if we do see an unwind, then it's definitely firms to look at. But if we look at who's actually getting burnt on this, of course, we mentioned Nomura, Credit Suisse, they're down 10%, 15%, respectively. And this is a $2 billion loss, right, for each of these firms. So what actually is happening here, Prime Brokerage, they basically loan cash securities to hedge funds, they process hedge funds trade. So with with Archaegos, they were basically on the wrong side of this trade. But Credit Suisse, Nomura, if it's a risk management problem, if it's a compliance problem, and they do they get dinged on this and they basically let this position run. This is a kind of incompetence really from whoever was involved in the sense of they maybe ignored compliance, we don't know yet, or risk management, but they failed to correctly acknowledge the losses that were incurring basically early last week. So someone in the risk management department is going to be in serious trouble. But I think if we can kind of take any anything away from this, it's about leverage, right, and how dangerous it is. And I guess, for all the people that tune into this channel and the retail that, you know, leverage can amplify gains, but it can also, you know, amplify losses as well. So unfortunately, stonks don't always go up. So if you can take anything from this is, you know, maybe reduce your leverage if you are leveraged, you know, because things don't always go to plan. So I guess that that would be the warning, but it's also a factor of the liquidity in the market. If they can't unwind this trade, maybe it's a liquidity problem with the specific names or, you know, maybe systemically. But I think with Bill Huang, you know, he's still, now is time to look at how much has he still got to liquidate, you know, does he have positions liquidate to the banks, still have big positions to unwind? So that could have a knock on effect. But I think with Bill Huang, I think the one thing to also note is this is not the first time he's been margin called. He actually got margin called with Volkswagen in the 2008 crisis. So he seems like a bit of a character, but this is not the first time he's been, he's been hurt with the margin call. Okay, cool. Well, with that, we'll wrap it up. Thank you, Eddie, for your insights. And yeah, we'll catch up again when we have further updates. Perfect. Thanks, Sam. Cheers.