Welcome back to the channel everyone today, i want to talk about how bloomberg have said that the stock market is crashing and that liquidations are here now there's some speculation as to exactly who was being margin called the other day and exactly how they got bailed out. So stay tuned and let's make some money, and now i want to dive straight in with the key information. So, let's start by listening to this video of bloomberg. Talking about how yesterday was margin, calls and that the s p 500 and the nasdaq could see upwards of a 30 correction that uh there was a lot of leverage in the marketplace uh going into this this this year and leverage you know, helps on the way Up but as the market rolls over, you know you know we have to have.

We see some unwinding of that leverage and - and i think that's what we saw - i mean we saw three day each of the last three days of last week. The market closed on its lows of the day, and i think we saw some of that sort of those margin calls and things like that to kind of cause the force selling. Yesterday, we saw it again and i think once that finally kind of got washed out and people were done with that there was nobody left to sell and that's why we got this major snapback rally. Well.

The concern, though, is that are people done with that in general was that was that capitulation? Have we seen it? That's the big question matt because because and i don't think it is - and we had a huge - i mean massive massive levels of margin debt going into this year. Uh. It has certainly come down some uh, but it takes time to for for that to get unwind. We've seen that in some in 2018 it you know we had record levels of margin, debt it took several months for that to get worked off, it wasn't doesn't just just happen overnight, and so i do think that the yesterday's the bounce will be one that will Probably i mean you know: the futures are down today, but they're down about half as much as they were uh.

You know an hour or so ago. So i think that should last a little while, but i do think we'll see uh, you know more volatility and probably lower lows, so i think we've gone from a situation that, on a near-term basis that people need to sell the bounces rather than buy the dips. I hate to ask you kind of the horse race question, but um it begs to be asked how much lower could we go? I mean before that margin is all unwound. Where do we end up yeah? I think you know the the well.

You know when i, when this whole thing kind of came around, especially around november in december, when the fed really started signaling they're going to be much more aggressive with their tightening. I really thought we'd see a deep correction in the in the s. P. 500.

Take us down 15 to 20 percent and i still think that's probably going to be the case, which of course take the nasdaq down even further. The thing for investors right now, though, is so important, is that you know maybe you'll raise a little bit of cash, not a lot. You have to raise. You know you know 25 cash, but you raise a little bit of cash on the bounces and therefore i mean my point is embrace this.

This situation, they're they're, they're, healthy they're, scary, but they're, also normal and, like i said healthy and if you're the ones who can embrace it you'll be the one who's. You know keeping your head uh, while others are losing theirs at the bottom, and you'll be selling right at the bottom, with the absolute worst time, you'll be the one who has the confidence to buy so there we can see that even bloomberg are expecting the s P 500 and the nasdaq to continue to crash we've had a little bit of a bounce back and now resumes more crashing. Now nazim posted saying some entities sold close to 10 to 50 billion dollars worth of puts in a matter of 30 minutes to prevent complete market catastrophe. As of now that entity hasn't been verified, most likely, the dtcc or the fed.

Also, the fed's balance sheet is almost close to nine trillion dollars. Their goal from selling 10 to 50 billion dollars worth of puts was to crush the vix to prevent their short swap basket from blowing up on all stocks, including amc gamestop, including zombie stocks and over-the-counter january 21st. Notional, options that rolled over was around one to two trillion dollars. The hedging or gamma demand by rolling may have been in the 30 to 100 billion dollar range.

Clearly, normal market makers can't supply that much demand. Given that the daily options volume is around five to ten billion dollars and therefore someone is really scared. Now, if it wasn't the dtcc or the fed that bailed out the market by selling all of these puts, potentially there could have been some very, very large market makers. That would have gone under guys if you're worried about holding your amc infidelity.

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There's a bit of a far-fetched theory that says citadel was margin called on its spy position on january 24th. At 11, 50 am and then the plunge protection team or the fed or the dtcc jumped in a few minutes later selling massive amounts of per options. How long can they keep this up? The post says with all the news regarding monday: i figured it could in a way fit in together. Why would the plunge protection team or the dtcc in the fed, jump in and save the market? You can see here back on the 24th.

There was an insane volume spike on the s p, 500 of 93 million units and, as you can see, other volume bars are barely visible at that point now, there's only a few firms that hold enough s, p, 500 or xpy trust to get margin called for 93 million etf shares now. Obviously, those large funds are going to be susquehanna, citadel, barclays, jane street ubs, credit suisse and many others of the large institutions. But the unusual thing is that, after that, massive margin call the market started to go up. As pointed out by zero hedge, a mysterious put seller sold gigantic amounts of puts in turn, saving the market from having a very, very red day.

Obviously, buying puts is a bet: the stock market will fall, but selling puts is a bet. The stock market will rise and go up again. You can see here the s p 500 chart in black and put on calls overlaid in orange and blue. You can see there's a massive spike in the number of puts that have been sold just at the time.

This massive margin call rolled in then from roughly 12 until 3 p.m. The delta input options became increasingly positive, dragging the market up with those puts, as dealers scrambled to cover their puts. They purchased earlier expecting the s p 500 to fall more that obviously, in turn sent the s p 500 higher still and sent the vix downwards. Obviously, buying puts is a better, the stock market will fall and covering those puts will therefore increase the price of the s p 500, because you're effectively selling the puts off effectively the fed and the dtcc could have briefly met with the president and got the go-ahead To save the market by unleashing the billions of puts, but obviously selling billions and billions of dollars worth of, puts all in one go is something that almost no institution can afford to do.

And therefore the theory is the plunge protection team or the fed in the dtcc started selling billions of puts from 12 until 3 to save the s p 500 from dropping further from its 4 percent. Intraday drop as citadel, possibly got margin called on their spy position. But obviously this is something the fed can only really do once or twice. They can't really do this over and over and at some point the market will end up crashing just like bloomberg predicted.

This obviously could have been caused by citadel being margin called on their s, p, 500 position, but when citadel gets margin called on all of their other positions, the fed won't be able to rescue them and obviously, when citadel gets margin called on all of their positions. They will be forced to cover their amc shorts. You may ask: why would the fed bail out citadel right now and obviously i guess it's just to keep the market from crashing when the fed and the dtcc aren't quite ready. Obviously, that proposed ruling for the sfts or securities financing transactions hasn't yet been put into place as it's still within the common period.

But what we do have is gary gensler who just voted for hedge fund transparency by a same-day reporting. Obviously the vote was passed three to one one. Member voted against hedge fund transparency, but the other three members, including gary gensler, voted for hedge fund transparency and gary gensler, also said the sec would benefit from additional information. Among other things, today's proposal would require certain advisors to hedge funds and private equity funds, to provide current reporting of events that could be relevant to financial stability and investor protection, such as extraordinary investment losses or significant margin and counterparty default events.

Therefore, the sec is going to be aware when hedge funds are in trouble which hedge fund is in trouble and what kind of margin and default events they're experiencing. This is obviously one step closer to the sec and the dtcc having these measures in place to allow the market to crash lou personally believes that that time is very, very close and is just around the corner. Lou tweeted saying my beautiful transmephrodites. I popped up here.

277 days ago, to expose wall street now that the sec has transparency, my channel is coming to an end soon i'll be really sad to see. Lou go as i did and do find lou very, very funny and do love tuning in to watch his videos. He says i will ride out amc with the family, but my fight is officially over lou saves america is coming guys, be sure to. Let me know down in the comments below what you think of the market crash.

Do you think the market will continue crashing or do you think crisis has been averted and, as always guys, if you enjoyed this video, be sure to check out some of my others, alternatively, subscribe to channel and in that notification bell, because that way you'll be alerted When i upload a new video cheers.