Sep 18, 2025

I recently learned about the collapse of Archegos Capital Management, which borrowed billions of dollars to buy large positions in several stocks, leading to significant paper gains. However, when one stock went down in March 2021, triggering margin calls, Archegos couldn’t cover its losses, resulting in a collapse. Some banks were aware of Archegos’s leveraged positions and impending collapse, leading to a debate on whether their actions constituted insider trading.

In another news item, private credit, a method where life insurance companies make long-term loans, was discussed. The use of funding agreement-backed notes (FABNs) allowed insurers to provide guaranteed returns to investors like Pimco. This practice blurs the lines between insurance liabilities and bond-like investments, highlighting the complexities of the financial industry.

The challenges faced by traditional fund houses like Franklin Resources in selling high-fee products were also highlighted. Acquiring alternative managers to tap into the private market offerings proved difficult, with cultural divides and slow sales processes hindering progress. The mismatch between product offerings and customer preferences posed a significant challenge for these firms.

Elon Musk’s recent trade involving a billion dollars worth of Tesla stock was mentioned, with speculations on his motives and potential gains. However, it was clarified that Musk’s insider status limits his ability to profit from such trades. Additionally, regulatory limits on pledging Tesla stock for personal borrowing further constrained his financial maneuverability.

Lastly, various other financial updates were shared, including predictions of a slowdown in investment management deals, the impact of the Fed’s ‘Third Mandate’ on bond traders, and the valuation of robotics startup Figure AI. These updates provide a glimpse into the dynamic and ever-evolving world of finance, showcasing the challenges and opportunities that shape the industry.

Stay Well!