Oct. 29, 2022
October 29, 2022 As we have seen with Archegos Capital, unreported swap positions can greatly impact market function. When these institutions are allowed to take leveraged positions many times their assets, and those positions become insolvent not only does the institutions get liquidated but so to does the counterparty in those trades (i.e. Credit Suise). There is significant evidence out there that the Archegos disaster is not a one off bad actor but simply one of many positions that could lead to a complete collapse of the stock market. The only way to prevent this from occurring again is to bring this data to the light. Investors are supposed to make investments based upon the best available information. However, if only one side has information (i.e. institutions, brokers, etc.) while the other side does not, it creates an unfair advantage. This coupled with the unreasonable leverage these institutions are able to create with swap positions exponentially increases the ramifications of these positions (in the positive or negative). Finally, swap data can be used not only to obfuscate positions but can be used to purposefully trick current/potential investors. If an institution is able to show a long position on publicly available information but then hide a massive short position through swaps on that same position that deceptive practice can influence who invests. Investing should not be a cloak and dagger enterprise and all data should be out in the open for everyone to see and criticize. Warren Buffet said it best when speaking about total return swaps, \"financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal\" The only way to reel in that lethality is to bring it to the light and make the data public. Please make financial data public so that investing can become investing not gambling. Thanks - A retail investor