How do you lose US$5 billion in one week?

[Mofra]

A short while ago I was reading an article about the increase of foreign ownership of foreign companies holding ASX listed equities (from 30% to over 40%). It is a little scary to think about what proportion of these holding are with largely unregulated hedge funds & private investment firms who could also offer large slices of their capital up tor the direction of just a few individuals.

PS. I assume he didn't consider the liquidity risk when establishing his positions, judging by the scrambling of the big boys to get him out of the position.

 

[scsl]

PS. I assume he didn't consider the liquidity risk when establishing his positions, judging by the scrambling of the big boys to get him out of the position.

I guess that when you're flying high, you really are flying high... With the success he was having, he must have thought he was bulletproof.

Having said that, I still think that their risk management team (or lack of!) should bear most of the blame. That's why they're there in the first place - to prevent greedy managers turning a blind eye on cocky traders.