Welcome back to the channel everyone today, i want to talk about why citadel didn't bail out robin hood when they had their three billion dollar margin call, and i also want to talk about the possibility of bank of america, citadel's largest prime broker responsible for over 99.69 Of their trades going bankrupt, so stay tuned and let's make some money, but before i dive into the video, if you haven't already be sure to pick yourself up, some amc related merch that there is the space 8 putty and i've also got a bunch of other Designs over on my website, linked in the description below and also we are down there, be sure to join the private discord, also linked in the description below and become part of the team, and now i want to dive straight in with the key information. So this here is another excerpt from the interview with mark codes, the ex-hedge fund ceo. He gives his opinion on why citadel bailed out melvin capital instead of bailing out robin hood. So let's hear what he has to say.

I mean citadel right. Now is 32 times more dangerous than goldman ever was because a he's so leveraged. This is griffin and he's a genius by the way he is not a dope. He knows exactly what he's doing.

He is hugely leveraged he's tied into every part of the market he's in hedge fund, he's in trading he's in market making he's an arb he's in pay for flow he's in ever. He has. He has every single table at the casino and the eye in the sky and the bank covered. He is on every part of every trade, this guy and and he's hired former government lawyers officials.

He has bernanke, he used to pay janet. Yellen he's got everybody, so he has this thing tied in wired soup to nuts. But what completely screws up the argument by the wall, street bats and reddit and whatever crowd that has you? Is you get down these rabbit holes and you can get lost? You know this whole argument about how many shares are in the float. You know they keep changing this or they used extra boxed or extra fail right, griffin and citadel.

Want you to focus on that because it doesn't mean jack to anybody and they basically could say who cares what matters and what's key and if you get in those who are listening to this and i hope a lot of people do if you get nothing out Of this, i want you to listen to what i'm about to say: okay, when robin hood and the long-haired guy who runs it what's his name, the greasy guy yeah vlad when he was on the cartoon network, also known as cnbc that day, he said you know, There's no margin call everything's great everything's, wonderful, it's business as usual. Everything's fine right to then find out hours later that robin hood had a what a three billion dollar margin call something like that. They had a 2 billion 3 billion, something with dtcc, where they needed to raise money on an urgent basis overnight through the vc guys, i think that's sort of the timeline. What everyone should ask themselves is: why did citadel give melvin money right as a bailout, because melvin was about to go under? Why did citadel give a billion or two billion or whatever they gave melvin? Why didn't they just give it to robin hood robin hood's, their customer? Robin hood is their guy who they play the payment for flow game.

If i'm, if you and i right, are as tight as tight can be, and you have a three billion dollar margin call. You call me up and say: hey mark, we do all this business. Can you loan me three billion dollars for a week? Sure lucy? What's it going to cost you i'll give you 10 of my firm right i'll, give you 10 and i'll pay interest i'll, say! No problem i'll wire, you you'll, have the money in 4.7 seconds as soon as i hit the return key right. Why would ken griffin not have given robin hood money? Why did they give it to melvin who had the absolute wrong side of the trade as everyone from robin hood? Why i've? Never i've never heard anyone bring it up.

I've never heard anyone ask the question i would like. I would like to get the greasy-haired guy vlad griffin, warren senator warren genzler, head of the sec, all in a room all in the room, melvin in the room and i'll. Do the asking of the questions i'll ask everyone, the questions, i'll create the timeline and everyone can sit there and take notes and that way we can get to the truth. What would your answer be? Why why why did they do that? Why did they? Because i i think citadel was so upside down in the gamestop amc, whatever meme stock trades, that that, given their leverage, they would have gone under, they would have gone under.

Had this melvin thing gone another day or so, because there's no reason that a sane person without line could say why would robin hood stop one side of the trades that day, because what robin hood did was they completely and utterly destroyed their clients they complete when You close one side of the market, the other side of the market. The downside of the market is a huge winner. If you have all buyers and no sellers stock goes through the roof, when you have all sellers and no buyers the stock collapses. Now i think this explains the main reason as to why citadel decided to give money to melbourne capital and not to robin hood, and it's something that i've theorized on before something that i've mentioned in one of my videos previously melvin capital with that close to bankruptcy.

They would have obviously had to cover their entire short position if they went under and got margin called now. If melvin had to cover their entire short position, it would have caused amc and gamestop to fly much much higher gamestop wouldn't have been capped at 400. A share and amc wouldn't have been capped at 20, a share it would have flown into that absolute stratosphere, and we would have had the mother of all short squeezes now. If we had the mother of all short squeezes, citadel would have been caught up in that as well, and because they're, so heavily leveraged citadel would have gone bankrupt as well.

Therefore, it sounds like citadel were pretty much down to their last two billion dollars at the very height of the amc and gamestop run-up back in january, and therefore they could only give the money to one firm, melvin or robin hood, and they had to make that Decision and said well, if we don't give the money to melbourne capital, they will have to cover their short position as they will be liquidated and if melvin get liquidated, then we get liquidated as well, but obviously for robinhood. All robinhood is doing. Is rooting trades for retail customers if robin hood went bankrupt, it's not really too much of a problem to citadel because they're on the other side of the trade to robin hood and therefore citadel obviously decided to lend the money to melvin capital to save melvin and Therefore save themself and that's why they didn't lend any money whatsoever to robin hood, but obviously robin hood had to find their own way out of it as well. They knew they weren't getting any help from citadel and if anything citadel were probably pressurizing them to turn off the buying, so that citadel and melvin didn't continue to be in an even worse place and didn't end up going under and therefore it left robin hood.

No choice but to strike a deal with the dtcc and effectively with citadel as well turn off the buy button in order to decrease the security deposit that they had to make with the dtcc. But it's super super interesting. That mark knows just how leveraged ken griffin and citadel actually are and how he said. The most important thing is the fact that citadel and melvin were so close to the wire that citadel had to lend money to melvin, because otherwise, melvin and citadel would have both gone under and been margin called.

Clearly, citadel were and are still on, the wrong side of the trade. If citadel almost got margin called when gamestop was at 400 and amc was at 20. Therefore, citadel are still very, very heavily negative on their overall short position and that's why citadel obviously can't cover their short position and why the shorts haven't covered in amc, nor on gamestop, and therefore we just have to continue fighting the same fight and we have to Figure out what stops the hedge funds and the institutions and the market makers, most importantly from not being able to roll over those failed, delivers because, obviously, both times in january and in june, they've had to stop rolling over those failed delivers and that's caused. The amc price to run up, or maybe something caused, the run-up which effectively caused them to not be able to roll their fail to delivers now something that i think may cause the next run-up for.

Amc and gamestop is all of this bad press for citadel, which is causing investor withdrawals. Obviously, if there's tons and tons of bad press for citadel their investors are going to get worried and demand their capital back, and that means that citadel is gon na have to liquidate some of its positions in order to get cash to pay back out to their Investors they're either gon na, have to sell off some of their long positions in amazon, apple, microsoft and everything else, or cover some of their short positions in order to feed those investor withdrawals. Now, obviously, if too many investors want to withdraw their cash because there's too much bad press for citadel, then it means they're going to have to pretty much sell off all of their assets and cover all of their shorts back in 2008, when the market was crashing Citadel obviously lost significant amounts of their investment portfolio because they were so heavily leveraged and, at one point, citadel actually refused to give investors their remaining cash citadel, actually halted. All investors withdrawals they laid off massive amounts of staff, closed offices and did pretty much anything that they could to survive.

The 2008 recession there's been interviews before where ken griffin talks about all the sacrifices he had to make just to survive, and obviously one of those sacrifices was refusing and halting investor withdrawals now, obviously, because there's so much bad press at the moment for citadel there's going To be so, many investors withdrawing their capital, meaning that citadel is currently in a very, very bad position. And therefore, i think we need to continue the hashtags on twitter and continue bringing media attention to what citadel is actually doing at the moment and how it's a bad thing for their business and how investors should withdraw from citadel. Yes, you could argue that citadel could potentially halt, invest, withdrawals again in 2021, but at the same time, if investors feel there's something fraudulent going on, they can demand their capital to be withdrawn. Now i also want to talk about what's currently going on with bank of america too long didn't read it's possible that bank of america is holding the biggest bag in the gamestop saga as some supporting evidence.

The 15 billion dollar bank bond on april 16th bank of america issued a 15 billion dollar bond now, given they had an extremely strong quarter. Why would bank of america need the additional collateral watch? This video at the 130 mark the ceo of bank of america, says assuming we get through the stress test. He catches himself and is like. I have to be super confident here now i've covered this stress test in one of my videos previously, and it's all to do with banks now having to hold at least one trillion dollars in high quality cash capital from october the first there were some percentage breakdowns That i covered in one of my videos previously, but it's something between like 8 to 15 of their assets and actual cash collateral, depending on the size of the bank, the risk of their portfolio and many other pieces and individual circumstances for each individual bank.

Now, obviously, carrying so much cash is going to be very difficult for banks that have already got all of their capital invested, especially if they're upside down in some trades that they can't close positions on. But how exactly does this link in with citadel well supposedly citadel specializes in option naked shorting and because of gamestop? They have an ever expanding bag of rubbish. These securities sold, but not yet purchased or derivatives, went up to 57.5 billion this year, with 32 billion of it in options as an extract from citadel's financial statements. It says the company has a concentration risk with respect to its derivative financial instruments.

At december 31st 2020 bank of america merrill lynch serves as clearing and prime broker for 96.69 of the company's net derivative assets. I do apologize, i think, at the start of my video in the intro i said 99.69, but it is actually 96.69 either way. Bank of america is basically the biggest clearing broker for citadel managing pretty much all of their trades, and therefore bank of america or now back is the prime and clearing broker for 96.69 of all the net derivative assets of citadel securities and therefore they're holding the 57.6 Billion bag of citadel poo and 32.3 billion of it is in options with a ton of those that are going to explode in their face or be worthless. Bank of america also holds a decent sized put position on gamestop and amc, as revealed from their most recent 13f filings from the bank of america q10 quarterly report.

We can see that, for the first quarter of 2021 bank of america had a giant cash outflow of 52 billion dollars, the majority of this coming from trading and other derivative assets or liabilities, basically a massive massive loss on their derivatives. Therefore, it sounds like those put positions on amc and gamestop moved massively against them. Obviously, in quarter one of 2021. now you've also got tons and tons of closed locations.

Currently, hundreds of bank of america locations across the united states are currently closed to my understanding. Some of these locations were being boarded up due to the trial of george floyd, and also i understand that, with a shift to mobile and online banking, there is also less need for physical locations, but does that facilitate about one-fifth of all locations being temporarily closed? I'm also pretty sure that bank of america recently also had problems with their online banking and wasn't allowing any custom withdrawals or customer payments from the online banking platform. Now i also wanted to speak on adam aaron's recent tweet about james bond's, no time to die. I actually went to see this in my local odeon, which is owned by amc, and it was a brilliant, brilliant film.

I went with my whole family. We also got the popcorn, the hot dogs, the big drinks and the reclining seats, and it was a brilliant brilliant day out. If you haven't yet been to see james bond's no time to die, it's a brilliant film. I do know that it is definitely bigger in the uk.

I think it is also showing, in some screens in amc across america as well james bond's, no time to die, smashes ticket sale records across the atlantic. In the uk saturday, ticket sales set a new one-day record for any bond movie ever dating back to 1962 and therefore is the highest bond day in 59 years to the sages predicting the decline of cinema choke on that and the official box office numbers have now Been released, or the estimates at least - and it says, james bond did 113 million dollars in their opening weekend and venom 2 did 71 million dollars. Shang chi is still doing well at least a million dollars every weekend so far as well. Cinema is dead.

Really, i don't think so see you soon on the moon. Ladies and gentlemen, now this is absolutely massive, because shang chi only hit 71.4 million dollars in ticket sales on their opening weekend and black widow hit 80 million dollars on the opening weekend. Guys be sure to, let me know down in the comments below what you think about citadel bailing out melvin capital and not robin hood, and also whether you think bank of america is going under and also while you're down. There be sure to pick up.

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