The implosion of Bill Hwang’s trading empire could trigger $10bn (£7.3bn) of losses across the financial system, analysts warned, as watchdogs around the world launched an investigation into how banks handled the controversial fund.
There is no net loss here at all.
This is speculation. Speculation is a zero sum game. $10 billion of losses in one place means $10 billion of profits in another.
Sure, certain parts of the system could be looking at great gaping holes. But by definition others will be climbing new mountains of cash.
This was all going on with swaps and the like – it’s zero sum speculation.