Archegos Capital: A bit-known hedge fund brought about widespread chaos on Wall Road

View of the New York Stock Exchange (NYSE) and a  statue of George Washington at Wall Street on March 23, 2021 in New York City. - Wall Street stocks were under pressure early ahead of congressional testimony from Federal Reserve Chief Jerome Powell as US Treasury bond yields continued to retreat. (Photo by Angela Weiss/AFP/Getty Images)

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ViacomCBS (VIACA), Discovery (DISCA) and other media titans’ stocks crashed Friday as Wall Street banks that lent to Archegos forced the firm to unwind its bets. The epic firesale wiped out more than half of Viacom’s value last week alone.
Major banks face billions of dollars in losses from their exposure to Archegos. Both Credit Suisse (CS) and Nomura tumbled Monday after warning of significant hits to their earnings.

The most startling part about the tale of Archegos is that it is a firm that few people had ever heard of before this weekend. And yet in this era of easy money, Archegos was able to borrow so much that its failure created shockwaves large enough to ripple across Wall Street — and impact everyday Americans’ retirement accounts.

“It’s a wake-up call. With leverage, comes risk,” said Art Hogan, chief market strategist at National Securities Corporation. “This is the second time we’ve learned a lesson this year about leverage.”

In January, another hedge fund, Melvin…

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