Hedge Funds Face Record Margin Calls Amid Trump's Tariff Crisis

Hedge funds are currently facing significant margin calls reminiscent of the 2008 Lehman Brothers collapse, driven by a sharp market downturn linked to President Trump's recent implementation of a 10 percent global tariff on US imports. This situation has forced many funds to liquidate assets, raising fears of a 'Black Monday' scenario similar to the historic crash in 1987. Major banks have issued their largest margin calls since the early days of the COVID-19 pandemic, impacting multiple sectors, including technology and consumer stocks. The pressure has led to a sell-off in gold and other assets as funds scramble to meet collateral demands. Prime brokerage teams on Wall Street are actively preparing for an influx of margin call requests as the situation evolves. Analysts warn that continued selling to meet these calls could further depress market prices and exacerbate the ongoing downturn.