Because on paper it doesn't matter. You never make or lose money until you flatten your positions. "...An accounting rule requires Berkshire to report unrealized stock losses and gains with earnings. This causes huge swings in Berkshire’s net results that Buffett considers meaningless..."
Einar Aas, an independent trader from Norway specializing in power futures. He made 8 figures a year for over a decade including 97 million in 2016 (all public record due to the fact that in Norway everyone's tax returns are public). He took a massive loss of hundreds of millions of dollars (one source says 252 million euros others say less, about 115 million dollars but I think they might be misinterpreting some information) on a spread trade involving Nordic and German power futures contracts in 2018. He's an analyst now, not trading anymore. I think he was pretty amazing. Just one man doing it big, trading his own coin in his pajamas from his mansion surrounded by empty houses that he bought just to have more privacy. Too bad things worked out the way they did. https://www.nytimes.com/2019/05/03/business/central-counterparties-financial-meltdown.html lol NYT says the loss "shook the world's financial system" uh.... sure.
Because that is investment fluctuation due to market volatility, not YOLOing a trade. On the other hand, this was a bona fide short loss: "Billionaire Bill Ackman's hedge fund, Pershing Square Capital, exited Herbalife (HLF), ending an epic five-year, $1 billion bet its stock price would crash to zero. Ackman told CNBC Wednesday that he had dumped Herbalife, a company he once slammed as a crooked pyramid scheme.Jun 25, 2019" --------------------------------- And the list of investors who tried to short Tesla: https://markets.businessinsider.com...nearly-billions-total-lost-2020-2-1028924815# ------------------------------------ HFs lost 30 billion in the VW infinity squeeze: https://moxreports.com/vw-infinity-squeeze/
Here's a preview of a lot of smaller trader blowups. Some haven't happened yet, but just wait... https://www.reddit.com/r/wallstreetbets/
It did actually shook the trading-market for elecricity, and it had to be orchestrated a bailout and so forth. So for that particular market, it was the biggest single event ever. So the NYT quote is actually correct, if they refer to that market. Not the while financial system. But yes, I know NYT have gone from news to activism lately. But the Einar Aas event was very significant
A $50 billion loss ("on paper") could turn into a $100 billion loss in a hurry. But like you said, "paper" losses do not matter.