Matt Levine’s Money Stuff: Archegos Got Too Big for Its Banks

Programming note: Money Stuff will be off tomorrow, back on Monday.

Archegos fallout

Generally speaking, in the U.S., if you want to borrow money from your broker to buy stocks, you are capped at 2-to-1 leverage. If you have $100, you can buy $200 worth of stock. Back in the olden days, you could have bought $300 or $500 or $1,000 of stock with your $100, borrowing the rest from your broker, but then a Great Depression happened and regulators clamped down on margin lending.

If you are a hedge fund, or a big institutional family office, you can get ...