Too much is never enough and when markets and investors are punch drunk on cheap liquidity and deficit spending, an environment gets created that places the entire system at risk. The dominoes have been set for a while and all it takes is for one to go down to commence the collapse of the others. News stories were breaking today around Archegos Capital Management, which is a family office, that ran into some problems. This firm is not a household name, which serves the point in highlighting how fragile the system is when a hedge fund or family office can cause or lead to a systemic event. In the case of Archegos, they received a margin call due to some of their equity positions losing value – namely ViacomCBS. What is interesting to note is how this is quite reminiscent to the housing crisis that led to the GFC – namely the similarities in the levels of leverage and the number of other financial institutions that were connected to these trades on a global basis. The investment banks involved, however, are household names such as Goldman Sachs, Morgan Stanley, Nomura, Credit Suisse, and Deutsche Bank. The damage done to each bank will of course differ, but the point remains – the financial system is highly interconnected, and this needs to be respected. Due to the fragility that exists, it can be the slightest wrong movement that throws equity markets off its perch. Be on the lookout for similar events to unfold. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Debt #Inflation #Markets #Bonds #USA #Liberty #Leadership #EndTheFed #bananarepublic #FireCongress #Protests #FoodPrices