When a highly levered hedge fund runs into trouble, other hedge funds will force a margin call and a stop out, which can lead to a stock market crash.
This dynamic is why we see a lot of gamification in the stock market, as it helps to keep these highly levered hedge funds solvent. If they run into trouble, they will become insolvent and illiquid all at the same time.
(0:00) New bestie game show!
(6:20) Election recap: Red wave falls flat, Republican party flips from Trump to DeSantis, a rebuke of extremism
(20:47) Coinbase CEO Brian Armstrong joins to break down the FTX collapse, further contagion risk, regulation, and more!
(43:32) Red flags exhibited by Sam Bankman-Fried and FTX, lack of governance/diligence
(1:06:00) Macroeconomic picture, lower than expected CPI print catalyzes market tear, advice for founders