Today I Want to talk about how a major short seller is currently being margin called and how liquidity is gone I Want to explain how this will impact the overall Market over the next few weeks and how AMC will also be impacted as a result. So stay tuned. Then let's make some money and now I'll drive straight in with accumulation. So as Qcap tweeted, they said the Carl Icam Margin Call it's happening As we can see the Carl Icann Enterprises stock was down 25 on a day yesterday and over the last month it's down a whopping 62 percent.

As Genevieve tweeted, she said this: Wall Street Legend was exposed on Twitter Carl Icann is famous for being a barbarian at the gate AKA a corporate Raider but now the barbarians are clearlia his gate as the stock is down 62 over the last month now. Carl I can and icon Enterprises is something I've touched on over my last few videos I Think it's really, really interesting because Carl Icann is a very large short seller that's currently down over 15 billion dollars over the last few years now. I Want to explain how margin calls currently have the FED Very, very worried about financial stability and stock since Frank tweeted, he said Fed officials at the policy meeting earlier this month expressed concerns about the risks lurking outside of the banking system and minutes on Wednesday actually singled out hedge funds which tend to use substantial leverage and may hold concentrated positions in some assets with low or zero margin. They also said that memories of the 2020 route are fresh back then.

Massive volatility and treasury funds and inequities sparked margin calls among hedge funds and contributed to the Fed's decision to pledge trillions in stimulus. Basically, the FED is aware: these hedge funds are making very over leveraged trades that have a very small amount of margin. Headroom Basically saying these hedge funds are close to being margin called because they have low or zero margin and a volatility Spike could end up liquidating a bunch of different hedge funds. Those said: there's a risk in our Capital markets today about the availability of relatively low margin or even zero margin funding to large macro hedge funds.

and officials have been asking about the current margin requirements and how a U.S debt default or a downgrade of the US's credit rating would impact the market Plumbing including the value of collateral. Basically, if the US's credit rating gets downgraded, then all of those U.S equities also get downgraded and these hedge funds have to stamp up way more collateral for their March requirements. So I Guess these hedge funds are just hoping that the US's credit rating is not downgraded. But as Fitch the rating agency has just said, the United States AAA rating may be cut by Fitch Fitch has actually placed the United States's AAA rating on watch.

Negative: Basically saying that if the US cannot lift this debt ceiling over the next few days, maybe even just over the weekend, the US's credit rating will be cut below AAA rated just like it was back in 2011. Now, back in 2011, that downgrading of the credit rating caused a stock market crash and the S P 500 by 18 in just under a week or two. And that's why the FED is worried about these hedge funds with low margin availability. Because of spike in volatility caused by the US's credit rating being downgraded, would liquidate tons of hedge funds.

It wouldn't just be Carl I can and I can. Enterprises being liquidated. It could potentially be the entire hedge fund industry including Citadel and many other large hedge funds. and the FED have said the possibility of a U.S debt default has added a new and troubling element, and financial Watchdogs are under pressure after having been blindsided repeatedly by instability in the bond market since the pandemic erupted.

Now, this potential of downgrade in the US's credit rating is very, very worrying for those hedge funds because these hedge funds are also experiencing a number of current equality crisis. Right now, liquidity in the overall markets is gone as there's multiple liquidity crises impacting The Wider Market Cash that these banks are holding is experiencing a liquidity crisis. The interest rate hikes are causing another liquidity crisis. There's a liquidity crisis in the housing market, and certain stocks like AMC are also experiencing a liquidity crisis.

There's major liquidity issues in the overall Market because these major Banks like JPMorgan Chase are running out of cash and therefore they're trading less and clearing less trades as well, especially with these higher interest rates impacting them too. But as Top G tweeted, he said so, even though there's a liquidity crisis in the spur of a moment, Nvidia added almost 200 billion dollars to its valuation He said, can you imagine how much money that actually is and he said, as a result, don't tell me AMC can't hit ten thousand dollars per share ever He said there's more than enough money for it to even hit a thousand dollars per share AMC alone currently has a market cap of two to two and a half billion dollars. If AMC added 200 billion dollars to its market capitalization in one single day, that would be a four hundred dollar price gain for the AMC stock. And this absolutely Could Happen very easily with liquidations.

Don't forget Nvidia just added 200 billion dollars to its valuation in one day with no hedge funds being liquidated at all. Imagine what happened to AMC if even just one hedge fund was liquidated, let alone 10 hedge funds or even 100 hedge funds, AMC could very easily add 200 billion dollars to its valuation or even more if all of those hedge funds shorting AMC were liquidated all at the same time and were forced to buy back and close out of their short position. and video managed to add 200 billion dollars to their valuation just by simply increasing their Quarter Two forecasts let alone what could happen to AMC if their forecasts were increased at the same time as hedge funds being liquidated. And as Rick Roll tweeted, he said, investors tend to forget that a liquidity crisis in the near term takes down all shifts.

These are the sell decisions in a liquidity crisis during liquidations aren't seldom made by the investors or the hedge fund themselves. they're made by the margin. Clerk And he said in a context like that, everything gets sold if it has a bid or if it doesn't. This basically means that when hedge funds get liquidated, it's not the hedge funds themselves in charge of their own liquidation, it's the margin clerk performing the liquidation and all stocks will be sold and all short positions will be brought back regardless of the price.

These hedge funds don't get to choose how and when they get to liquidate their AMC short position and choose how and when they get to buy shares, then margin clerk just force Market buys all of those shares all at once in the open market, which would obviously push the price of AMC up and up and up. During a massive wave of liquidations, and as Enduring Winter tweeted, he said Here Comes The liquidity crisis that many of us have been talking about for years. he said, this is like watching a slow motion train go off into a cliff. Now, something else that would also drain liquidity from the markets is the Treasury Department Issuing tons of new treasury bills if the debt ceiling does get raised, this article says the Treasury Department could issue 700 billion dollars in treasury bills within weeks of a debt seal deal draining liquidity from the markets.

And that's because the treasury will have to replenish its cash balance after the debt ceiling is lifted. The U.S Treasury currently has under 40 billion dollars left in cash reserves. As Wall Street Silver tweeted, He said the U.S treasury is so low on cash and has used up all of their tricks to delay spending. and then there will be an avalanche of new debt issued to try and catch up, especially as all of this new debt will be raised or issued at over five percent interest rates, sending annual interest on that debt to over a trillion dollars per year, and especially because all of this new debt will be issued or raised at over five percent interest rates, sending annual interest payments on the debt to over a trillion dollars per year.

I Always wanted to quickly talk about AMC's short interest and how it's supposedly decreased. As you can see, AMC's legally disclosed short interest is reduced from 134 million shares down to 105 million. but as Robert tweeted, he said these hedge funds are using options to make it look like short have covered with no real price action, reducing the short interest in the process. But all that really does is increase the risk for these shorts because it means they've taken out a larger derivative position and once again double down the short position.

So what we can see: Obviously these hedge funds are just using options to Simply hide their true short position or to hide their legal short position and make it look like they've closed out of some of their shorts. Obviously, we know these shorts haven't closed out because the AMT price has continued going down. There's been no price action that would evidence them actually closing out of shorts, especially because these hedge funds are still raking in millions of STDs on AMC every single day. Therefore, they've clearly just tried to hide their position to make it look like they've closed out of and to cause panic and fear when obviously they haven't But I should let me know what you think down in the comments below and as always guys, be sure to ding that notification Bell because that way you'll be alerted when I put a new video.

Cheers.