Welcome back to the channel everyone today, i want to talk about how the sec are investigating amc and gamestop and what that means for the squeeze. Also, i want to talk about some new capital requirements for large banks in the united states, so stay tuned and let's make some money, but before i dive into the video, i just want to give a massive shout out to everybody. That's currently part of the team on the private discord there. They get urgent news due diligence and updates about amc, gamestop other stocks and cryptocurrency as well, and it's the best way to get in contact with me.

If you've ever got any questions, as i'm active there, pretty much 24 hours a day unless i'm asleep and now i want to dive straight in with the key information so gamestop's. Recent 10q filing had this item of other information. On the 26th of may 2021, we received a request from the staff of the sec for the voluntary production of documents and information concerning an sec investigation into the trading activity in our securities and the securities of other companies. The sec has since called for additional documents as a follow-up to the initial request.

We are in the process of producing the documents and have been an intent to continue cooperating fully with the sec staff. Regarding this matter, this inquiry is not expected to adversely impact us now the other month. We also saw amc issue, a very, very similar statement - note that at this time to comply with the u.s securities laws and on the advice of council. Unfortunately, we are unable to answer any questions pertaining to the trading and price volatility of our securities, including, but not limited to the short selling of shares or derivatives on amc stock.

Therefore, at the moment, both amc and gamestop are currently being investigated by the sec started in may, and it's still ongoing and the sec have requested additional documentation now, obviously, it's not amc or gamestop, or either of them combined that have done anything bad, that's being investigated By the sec, it's just the general trading of the underlying securities that is being investigated. Obviously, we know that there are tons and tons of synthetic shares out there in the market at the moment that have been illegally created and naked shorted. Therefore, the sec are actually doing investigations into the underlying stock and the trading activity that amc and gamestop have records of. I guess the sec are trying to paint a picture of exactly who owns exactly how many shares of each company that way when they've got an entire list of who owns exactly how many stocks they'll be able to see just how many synthetic shares are currently an Issue, obviously, this is a good thing that the sec are actually doing an investigation and they're not just saying that they're doing an investigation, they're actually requesting documentation and further documentation as well.

How exactly could this affect the squeeze? Well, if the sec determines that there are a significant amount of synthetic shares, they could enact a forced recall and make the lenders recall all of the shares that have been lent out if the sec make those lenders primarily being blackrock and vanguard, recall all of their Shares it means those companies that are shorting this stock and illegally shorting. The stock will have to cover all of their short positions and return the share to the rightful owners and also cancel off all of those synthetics that were created. That means that effectively the hedge funds and those institutions that are shorting the stock and are illegally shorting, the stock will be made to go out into the market and repurchase all of those short positions back now. Obviously, this would cause the amc and gamestop squeeze, but i guess the only downside is that the sec have been doing their investigation since may, and it's likely that the investigation is to go on for a lot longer.

Therefore, i'd like to hope that this is a very last kind of final chance if all else fails at least somewhere down the line, the sec will finish their investigation and cause a share recall, but i wouldn't be counting on it for any time soon, as i've Discussed a number of times on the channel, i think the squeeze at the moment is most likely to be caused either by the cycle theory or by the impending market crash, speaking of which i also wanted to talk about. The federal reserve board announcing the individual capital requirements for all large banks, which is effective on october 1st, following its stress test earlier this year, the federal reserve board on thursday announced the individual capital requirements for all large banks effective on october. The 1st those capital requirements ensure that the large banks tested will hold roughly 1 trillion in high quality capital enough to survive a severe recession and still be able to lend to households and businesses. A one trillion dollars is a hell of a lot of money.

Don't forget it's one trillion dollars of actual money, not just one trillion dollars in derivatives, and it also has to be high quality capital, which i think can only be actual tangible cash. Large bank capital requirements are in part determined by the board's stress test results which provide a risk, sensitive and forward-looking assessment of capital needs. The below table shows the total common equity tier 1 or cet1 capital requirements for each bank, which is made up of several components, including minimum capital requirement, which is the same for each firm and is 4.5 percent. The stress capital, buffer or scb requirement, which is determined from the stress test, results and is at least 2.5 percent.

On top of that, and, if applicable, a capital surcharge for global, systemically important banks or gcips, which is at least one percent. On top of both of those, the board also affirmed the stress test results for one bank that requested reconsideration, hsbc north america, holding incorporated the reconsideration process involved. An independent group separate from the stress testing group that analyzed and evaluated the results, while affirming hsbc's stress test results for this cycle. The board also directed the staff to conduct a closer examination of issues raised in the reconsideration process to inform continuing improvements in its stress testing methodology for next year's stress tests.

Now that one actually, there is quite interesting because basically hsbc were upset with their stress test results, probably because they don't have enough cash and ask for a reconsideration, but the federal reserve board put their foot down and reaffirmed their earlier choice. Now, jackson hunter tweeted out that giant list of banks with their minimum cet1 capital ratio of four and a half percent, their stress capital buffer, which varies per bank and also the g-civ surcharge, as well, if applicable, giving their total requirement now that g-sub-surcharge for those largest Banks is going to be bank of america, bank of new york, mellon city group, goldman sachs, jp, morgan, chase, morgan stanley, state street corporation and wells fargo as well. Now the highest stress capital buffers was in dws, it was in hsbc and it was also in ubs. Basically, meaning that these are the banks that are currently the most over leveraged on their riskier positions, i'm not surprised hsbc wanted a reconsideration because they were the highest stress capital buffer at seven and a half percent.

So basically, when the market does crash, it looks like we'll be saying goodbye to hsbc and also ubs as well. Now i was also wondering what that capital requirement percentage is actually applied to it's all, well and good, saying four and a half percent and two and a half percent and one percent. But four and a half percent of what exactly well a capital requirement is the amount of capital, a bank or other financial institution has to have as a requirement by its financial regulator. This is usually expressed as a capital adequacy ratio of equity as a percentage of risk-weighted assets, so basically those capital requirements have to be four and a half percent of their risk weighted assets, for example.

So, for example, that capital requirement of four and a half percent means they have to hold actual capital at the ratio of four and a half percent of their risk weighted assets. Now we can also see this screenshot, which compares the total assets of each banks and also their total derivatives. I imagine these figures are going to be presented in millions or even billions, but obviously we can see that a lot of large banks like jp morgan, citibank, bank of america and wells fargo, are going to have to hold a lot of cash in actual capital. And we can see that from this list, the largest requirements are goldman sachs here and also morgan stanley here as well at 13.4 and 13.2.

Now, speaking of that impending market crash, we've also seen another letter, that's been written from jeanette yellen dated september 8 2021.. It was obviously addressed to nancy pelosi, saying i'm writing to follow up on my previous letters regarding the debt limit and to provide additional information regarding the treasury department's ability to continue to finance the government in the absence of congressional action and to address the debt limit. After the debt limit was reinstated on august, the 1st treasury began employing certain extraordinary measures to continue to finance the government on a temporary basis. These measures, which are authorized by law and have been used in previous debt limit and passes, include a suspension of certain investments in a civil service, retirement and disability fund, the postal service, retiree health benefits fund and the government securities investment fund of the federal employees.

Retirement system, thrift savings plan once all available measures and cash on hand are fully exhausted. The united states of america would be unable to meet its obligations for the first time in our history. Our estimates of the period of time that extraordinary measures will last have been refined in recent weeks, although they continue to be subject to considerable uncertainty due to the normal challenges of forecasting. The payments and receipts of the us government, including the uncertainty in the level of corporate and individual taxes, due on september 15th, heightened by the additional uncertainty due to the pandemic and related economic relief and other factors.

Given this uncertainty, the treasury department is not able to provide a specific estimate of how long the extraordinary measures will. Last, however, based on our best and most recent information, the most likely outcome is that cash and extraordinary measures will be exhausted during the month of october. We will continue to update congress as more information becomes available. We have learned that from past debt limit in passes that waiting until the last minute to suspend or increase the debt limit can cause serious harm to businesses and consumer confidence, raise short-term borrowing, costs for taxpayers and negatively impact the credit rating of the united states.

So far, it looks like that's exactly what's happening, as obviously there was no decision made in august and instead, congress went on a recess. A delay that calls into question the federal government's ability to meet all of its obligations would likely cause irreparable damage to the us economy and global financial markets. At a time when american families, communities and businesses are still suffering from the effects of the ongoing global pandemic, it would be particularly irresponsible to put the full faith and credit of the united states at risk. I again note that congress has addressed the debt limit in recent years through regular order with broad bipartisan support.

I respectfully urge congress to process or protect the full faith and credit of the united states by acting as soon as possible. Clearly, jeanette yellen is becoming ever more concerned about that debt, limit ceiling, increase, which has not yet taken effect, and actually the debt limit has already been exceeded. Therefore, if the limit isn't extended soon, the us will not be able to meet their obligations and will default on their debt and, finally, for today, i wanted to touch on the amc in gamestop potential partnership and also to recap, on the gamestop earnings call adam aaron. Recently confirmed that he's been in touch with ryan cohen from gamestop, and the amc and gamestop are working on a partnership but they're not yet ready to say what it is.

My thought process is that potentially gamestop could bring games inside the theaters. Therefore, you could go to your local amc and play games supplied by gamestop. I have a feeling once upon a time, gamestop were actually looking at setting up kind of land rooms or gaming rooms, so obviously this will work perfectly with amc, theaters and finally, as a recap on the gamestop earnings call gamestop reports, financial results for 2021. as a Second quarter overview, they generated net sales of 1.183 billion dollars compared to 942 million dollars in the prior year's second quarter.

It's obviously great that revenues increasing can never be unhappy with that and they ended the period with cash and restricted cash of 1.78 billion dollars, which is also a massive amount of cash very similar to the amount of cash that amc currently has. They also ended the period with no long-term debt other than the 47.5 million low interest rate loan associated with the french government's pandemic response. Gamestop have gone better than amc there and they've also cleared out all of their long-term debt. Amc does have long-term debt still, but also has a large amount of cash on hand as well.

Gamestop have also invested in the long-term growth initiative that includes expanding the company's product, catalog, enhancing its fulfillment network capabilities and technology and adding talent across the organization. They also entered into a lease of a new 530 000 square foot fulfillment center in renault nevada, positioning, the company's fulfillment network to span both coasts of the continental us and finally, they entered into a lease of a new customer care center in pembroke, pines florida and Started building out us-based customer care operations, that's also good, because it's going to bring a lot of jobs to the us and create new jobs in this period of uncertainty. Guys be sure to. Let me know down in the comments below what you think about the sec investigating amc and gamestop and also be sure to check out those links down in the description below.

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