Why Citadel really wants to move out of Chicago and how they’re using Melvin to hide losses from investors


This is not my writing, I found another Ape (/u/DukeMaximum) on another sub, and wanted to share here (Narrator: Oh and, i’m reposting this repost! Credit goes to the first ape. I take no credit for anything copy-pasted around these valleys and hills. Repetition is worth is, we don’t monetize, all we do is build a well-functioning society here, mmmmmkay? And meme some. Without further ado :- )


Melvin was one of Ken Griffin’s pet projects, a hedge fund he spun off of Citadel to take on far more risk than Citadel itself could justify to investors. Melvin had, at peak, about $8.7 billion of capital assets, $2 billion of which was Citadel money. Now, with Melvin closing, they can shift losses off of their books onto Melvin, and write those off, while still withdrawing their $2 billion (or, the billion that’s left. They shifted half of that out months ago.) This keeps Citadel looking healthy, at least on paper, prevents margin calls, and ensures that investors don’t panic and start withdrawing money (remember that, last year, Citadel limited how much investors could withdraw per year. Citadel is very concerned right now about investors demanding their money, because they’re having liquidity issues.)

If this sounds familiar, it’s probably because it’s similar to what Enron did back in the 90’s, shifting losses to subsidiary companies to keep them off their own books.

Citadel is also threatening to move out of Chicago due to high crime rates. This is bullshit. In order to boost his public image before the shit hits the fan, Griffin invested $25 million to the University of Chicago for a new crime lab to offer “policing and public safety training.” (This is along with a few other charitable contributions Griffin has started making recently, in a transparent effort to look like a civic-minded guy right before the news comes out what a dickhead he is.)

But Chicago has had high crime rates for decades. Why is Citadel at a breaking point now? Griffin has been working in Chicago since 1989. Why does he want to leave now, after more than thirty years?

Because, by shifting out of Chicago, Citadel can lay people off, sell expensive assets, and get out of expensive downtown Chicago leases. It lets them cut costs and free up liquidity. It’s the perfect cover for a company struggling to remain profitable or, at least appear profitable to investors and avoid margin calls, while they’re actually hemorrhaging cash.

The TL;DR is that we’re winning. Tendies are imminent, apes.

Source: Trust me, bro. I’d love to get checked by apes with more brain-wrinkles. Please, tell me if I’m wrong.

This is not financial advice. I am not a financial advisor. I am a meat popsicle.

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