Welcome back to the channel everyone today, i want to talk about whether these synthetic shares can actually be reset. Can the sec and the fed effectively just roll back. The stock market cancel all of these synthetics and therefore prevent the squeeze we'll stay tuned and let's make some money, and now i'm gon na dive straight in with the key information. So you may have seen lou's video from the other week where he talks about whether the sec and the fed can reset all of these synthetics and the failed delivers counts with them all and effectively just roll back the stock market to when amc was at 73 Dollars a share and prevent the squeeze lou tweeted saying in the end they will write off all of the synthetics.

They could not swap out with real shares during the squeeze. He said your real shares and synthetics will be bought, but at a certain point those millions of failed delivers and synthetics will just disappear. Loose said that amc may run 73, a share or 200 a share or 500 a share, and then at that point the sec and the fed will just put a cap on it and cancel all of the remaining synthetics. Now today i want to go through a few reasons of my own and also a few others provided by other people as to why this is entirely fun and why the sec in the fed cannot cancel the synthetics.

I do think a lot of the stuff that lou says is absolutely brilliant and i also think he's a great guy, but i personally think that this is just rubbish. So i think firstly, if the sec, the fed and the wider us government could just roll back. The stock market and reset all of these synthetics and reset share prices. Then they would have just rolled back and reset the stock market back in 2000, 2008 and also again at the start of 2020..

They would have just allowed the stock market to run up in the 90s, but then, instead of letting the market crash in the year 2000, they would have just rolled back and reset the market and allowed it to continue this massive move upwards and again. Instead of letting the market recover through the early 2000s, but then seeing this massive crash in 2008 again, they would have just rolled back and reset the market and allowed it to continue. This move upwards and again the same in 2020. Instead of letting the pandemic.

Take a massive control over the u.s stock market. They would have just rolled it back and allowed it to continue upwards again. If the sec, the dtcc and the fed, had this power to roll back and reset the market, they would have just performed a rollback during every single financial crisis in history and allowed the stock market to continue upwards. You may say tom there's so much on the line now, there's giant funds like citadel that are too big to fail.

There's also many many banks like jp morgan and goldman sachs that are massively over leveraged and could end up being liquidated during the next stock market crash. But again, i think if you just rewind to 2008, there was also giant banks like bear stearns and lehman brothers that ended up going under, and the fed did absolutely nothing to roll back and reset the stock market because they just can't. I think if they pick now of all times to roll back, the market resettle the felted delivers and the synthetic shares of amc it'd effectively just destroy the market integrity, as they never chose to do this previously. The technical definition of a reset or the reason a rollback is performed, is to make a correction to something.

That's happened erroneously, but i think nature's actual correction or market correction is the form of a market crash, the sec and fed don't just roll back the market. They wait for a natural correction, which is a natural market crash, and that is exactly what the s p 500 and the wider u.s stock market is setting up for right. Now, there's tons and tons of over leveraged funds on the brink of bankruptcy because they're so over leveraged and therefore when they end up being liquidated, it will perform a natural market correction which would be a market crash and therefore not rolling back and not resetting the Market and not resetting these failed delivers and synthetic shares is actually in the sec's best interest. As it will mean.

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Moomoo also publishes daily short selling data and position. Cost distribution, on top of a number of other key indicators so guys be sure to send it to moomoo, using the link in the description below and make your first deposit to get up to. Seventeen thousand five hundred dollars in free stocks in his video lou speaks about the cdos and credit default swaps of 2008 and how the sec effectively reset all of these cdo's. But that's not really what happened at all the cdos and credit default swaps.

Weren't reset the cdos crashed and became worthless. The credit default swaps, on the other hand, were either exercised and the money was paid out or the credit default swaps lapsed as they're effectively a fixed term insurance policy. These cdos and synthetic cdos and cdo squads were never reset. They just became worthless.

There were some very large banks like bear stearns and lehman brothers that held hundreds and hundreds of billions of these cdo's. That became worthless and the banks failed, but don't forget it wasn't. Just bear stearns and lehman brothers that were holding these ceos. Many of the largest u.s banks were also holding these cdo's.

That became worthless. The larger banks just didn't end up failing like lehman and bear. I think it's important to remember that while there was five trillion dollars in synthetic cdos at the very end, a large majority of these synthetic cdos were offset by those credit default swaps held by the exact same banks. Many of the banks that had very large synthetic cdo positions attempted to take a net short position by taking out more credit default, swap insurance than they held in synthetic cdos and therefore the net value they held in the end.

Wasn't trillions of dollars that ended up becoming worthless? It was only hundreds of billions of dollars that became worthless and most of the banks survived after taking massive massive bailouts as a prime example, the sec, the dtcc and the fed didn't just roll back or unwind. All of those synthetic cdos and allow best earns and lehman brothers to continue trading. They basically did nothing and allowed them to go bankrupt back in 2008, there was a large amount of synthetic shares created on some of these major banks like bear stearns and jp morgan. But again these synthetic shares weren't ever reset by the sec, the dtcc or the fed they just naturally unwound over the next 10 15 years.

You can see here during the financial crisis. Jpmorgan's stock fell from 52 a share all the way down to lows of 15. A share, but you can see here that from 2008 over the next 10 to 15 years, the jp morgan stock has risen from lows of nearly 15 to highs of nearly 173 dollars per share, and this is basically a long-term squeeze or a long-term reset of all Those synthetic shares created against jp morgan chase effectively over the last 10 to 15 years. Those shorts have been slowly covering pushing the jp morgan stock up past its previous highs to significantly higher highs.

Obviously, the jpmorgan stock was synthetically, shorted or naked shorted down from 52. A share down to around 15 a share, but then all those synthetic shorts had to close and the stock is now trading near 173. If we look at microsoft, for example, microsoft fell from highs of around 37, a share down to around fifteen dollars a share again. But if any synthetic shares were created against microsoft, they would have been forced to close during the run up to nearly 350 dollars.

A share and therefore the cdos and credit default swaps and the synthetic shares created in 2008 weren't ever reset. They just became worthless and were slowly unwound over the last 10 to 15 years and their four of cdos and credit default swaps and synthetics from 2008 weren't. Ever reset, then, the synthetics against amc also won't be reset either again. The synthetics against amc will just be forced to close when amc squeezes the sec, the dtcc, the fed and the wider us government.

Just don't have that power to just cancel shares out of people's brokerage accounts. I think it's also important to remember that cancelling shares out of people's brokerage accounts doesn't just impact u.s residents, where the u.s government has jurisdiction. Cancelling shares out of people's brokerage accounts would impact people in the uk. It would impact people in europe, it'd impact people in australia and many many other countries around the world where people have been holding amc and obviously, in the majority of these countries, the us government doesn't have the jurisdiction just to wildly cancel synthetic shares or wildly cancel Shares or steal from people's brokerage accounts and as this post on reddit says, synthetics are the result of failure to delivers good faith.

Ious are exactly that good faith until settlement can be arranged due to the nature of the settlement system. In the case of synthetic short selling, almost always they're in bad faith, strategic in nature, hence the term strategic failure to deliver. Obviously, these are in bad faith and are strategic in nature because they have no intention in fulfilling the transaction and ever closing out the synthetic short position. We know that because these short hedge funds have been shorting stocks like blockbuster and sears over the last 10 to 15 years and never closed out of their short positions.

They effectively just got these stocks relegated out of the nasdaq and the nyfc onto the otc market and these stocks. Now, trade at fractions of a penny and the shorts were never closed, and he says the majority of the strategic ftds are from securities lending of which, like much of the community, already knows now as being an extremely bad thing, is mainly reserved for short selling and He says once these shares synthetic or not are sold into the market they're in circulation, including transactionally, like buys from retail and other parties, and he says, which means your account. My account and other accounts likely hold many of these ious synthetics or whatever. You want to call them.

They were once sold sure, obviously for a hedge fund to actually short a share, whether it's a real share or a synthetic share. It either has to borrow them or create them, but then sell those shares to people like you and i and he says the powers that be whether it's the sec or not, cannot simply delete these shares from your accounts or from the market. And he says that would be unprecedented in nature to the point of historic, the pretense being pushed by these grifters is demonstratively false and only serves to groom or condition the tired or weak investor into panic selling at the first chance they get. As i just said, the sec, the fed or whoever it is can't just steal these shares from people's accounts like you and i because they don't have the jurisdiction in basically every country around the world other than in the us.

And on top of that, it's also something that's never happened before these shares weren't just stolen from your accounts back in 2008, and these cdos and credit default swaps, weren't just reset or rolled back. They became worthless and ended up expiring or being exercised, and therefore, what i know the sec can hold trading on a specific stock for up to 10 business days and probably longer if they so sore fit. They can't just reset or roll back all of these synthetics. They can't just steal these shares out of your account and not pay you a single penny.

I guess what they can do is freeze the stock and not unfreeze it until you end up selling, but again, i think, to some sense. The sec, the fed and the wider us government needs the amc squeeze to happen in order to rid the market of these. Over leveraged shorts that are posing a stability risk and therefore i don't think the sec will be eager to step in and save these over leveraged shorts as they're the ones presenting the stability risk in the first place. Guys be sure to.

Let me know down in the comments below whether you think the fail to delivers and the synthetic shares can just be reset and rolled back and deleted from your account and as always guys, if you enjoyed this video, be sure to check out some of my others. Alternatively, subscribe the channel and ding that notification bell, because that way, you'll be alerted. When i upload a new video cheers.