11–20 of 78 posts
A user suggested the Levine article as a better alternative, so we'll use that for now. If anyone knows a better URL, we can change it again.
Who wrote this?
We changed the URL from https://www.credit-suisse.com/media/assets/corporate/docs/ab... , which is one of those annoying links that downloads a file, and the title from "Postmortem in finance: How Credit Suisse lost $6B [pdf]", which was editorialized. (Please read the site guidelines! https://news.ycombinator.com/newsguidelines.html ) A user suggested the Levine article as a better alternative, so we'll use that for…
I guess it's not responsive but to be honest that's a feature not a bug lol. I guess the editorial concern is the bigger issue.
We changed the URL from https://www.credit-suisse.com/media/assets/corporate/docs/ab... , which is one of those annoying links that downloads a file, and the title from "Postmortem in finance: How Credit Suisse lost $6B [pdf]", which was editorialized. (Please read the site guidelines! https://news.ycombinator.com/newsguidelines.html ) A user suggested the Levine article as a better alternative, so we'll use that for…
1. The original link was to the source, which I would think would take precedence over a second-party review of it, even a skilled one like Levine's.
2. The source's actual title is "Credit Suisse Group Special Committee Of The Board of Directors Report On Archegos Capital Management". The editorizialized title ""Postmortem in finance: How Credit Suisse lost $6B [pdf]" isn't bad, includes a [pdf] warning, and is more descriptive of the content for anyone not aware that Archegos lost $6b of CS's capital. And how they lost it is certainly interesting.
3. Maybe if you change a post link from the original source, also link the source back in the comments. Levine includes it in his article below the fold [1][2], at least, but that might not always be the case. Lots of web writers these days like to write about reports and studies without actually linking to it.
[1]:https://www.credit-suisse.com/about-us-news/en/articles/medi...
[2]:https://www.credit-suisse.com/media/assets/corporate/docs/ab...
We changed the URL from https://www.credit-suisse.com/media/assets/corporate/docs/ab... , which is one of those annoying links that downloads a file, and the title from "Postmortem in finance: How Credit Suisse lost $6B [pdf]", which was editorialized. (Please read the site guidelines! https://news.ycombinator.com/newsguidelines.html ) A user suggested the Levine article as a better alternative, so we'll use that for…
How is a browser downloading an html file any different than requesting a PDF other than size? If anything it's useful to be able to pop it over into the Documents app and read later. I guess it's not responsive but to be honest that's a feature not a bug lol. I guess the editorial concern is the bigger issue.
$ curl -SsfI https://www.credit-suisse.com/media/assets/corporate/docs/about-us/investor-relations/financial-disclosures/results/csg-special-committee-bod-report-archegos.pdf | grep -i disposition
content-disposition: attachment
Wow, this is really interesting. So CS actually knew what risk it was taking, the hypothesis that Archegos had kept its positions private from several lenders is false. They knew what was going on and couldn't ask for more margin, and when they did without a response they couldn't get themselves to just close out the customer's positions.
The problem is actually one of internal incentives, from my reading. If you've ever done business with CS (I was a PB customer), you'll notice there's a bunch of different entities, far more than you'd expect. I suspect when you have a number of committees in charge, actually nobody is in charge.
You also have a sales guy / risk guy issue here. Some person is in charge of the relationship and gets paid for bringing in the business. Another person is supposed to say stop once the risk to CS gets too high. There's a natural tension there and if the ownership over the relationship is vague, there's going to be a lot of meetings and not much decided. I saw this first hand at a firm I was at: risk guy comes in, asks to reduce positions. Trader says meh and then if there's no process the issue just sort of sits there awkwardly, with no resolution. Normally there's no blowup, but sometimes...
Another PB I worked with had a similar issue. A high rolling Gulf guy came in, wanting to do big FX trades on little margin. Risk said no, boss overruled them. Dude blew up, PB lost a lot of capital, boss got fired.
Former fund manager here. Wow, this is really interesting. So CS actually knew what risk it was taking, the hypothesis that Archegos had kept its positions private from several lenders is false. They knew what was going on and couldn't ask for more margin, and when they did without a response they couldn't get themselves to just close out the customer's positions. The problem is actually one of internal incentives, f…
Former fund manager here. Wow, this is really interesting. So CS actually knew what risk it was taking, the hypothesis that Archegos had kept its positions private from several lenders is false. They knew what was going on and couldn't ask for more margin, and when they did without a response they couldn't get themselves to just close out the customer's positions. The problem is actually one of internal incentives, f…
Can you expand some of these acronyms? CS, PB, etc.? I'm guessing most of us won't know them. CS=Credit Suisse, PB=Personal Banking, FX=Foreign Exchange?
I cannot believe that Archegos was "too busy" to read a request for additional collateral. They knew exactly what was going on, and they were hoping to buy more time and pray that the market would change in the direction they needed. This sounds like a desperation play that didn't succeed, and Credit Suisse was left with the loss. Now, I'm not much educated in finance... but risk is risk, and whether you have models…
Matt Levine did a pretty good writeup on this: https://www.bloomberg.com/opinion/articles/2021-07-29/archeg...