Welcome back to the channel everyone today, i want to talk about how the hedge funds are stuck, how they're stuck between regulatory crackdown and even hedge funds, being entirely disconnected from trading exchanges, and, quite literally, from incoming liquidations due to the coming recession, and due to this Massive wave of redemptions so stay tuned and let's make some money, and i want to dive straight in with the key information, so you may say tom: where have you been over the last few days? I actually had a nasty case of tonsillitis. I've barely been able to speak and my throat has felt like glass, so i thought i'd take a few days off just to rest and recover amc did have a brilliant week last week, however, obviously we haven't yet seen a squeeze, so until we see that squeeze It's business as usual, and as of a few days ago, a six billion dollar hedge fund was recently cut off from trading as an investigation loomed over them. Now, as we see more and more investigations into various hedge funds, especially as the sec has launched a search through a hundred personal mobile phones of top wall street, deal makers, we're gon na see more and more hedge funds being disconnected, and especially if a big player, Like citadel ends up being disconnected well, they aren't going to be able to manipulate amc. They aren't going to be able to short synthetic shares because they're, quite literally, going to be disconnected from trading now.

It says here the hedge fund, giant sagante, capital management has been cut off from trading by two major banks. Now don't forget that bank of america is the prime broker for citadel and therefore, if bank of america wanted to, they could disconnect citadel from the trading exchange and literally halt all trades performed by citadel. And i think not only can these major banks disconnect individual hedge funds, but also the sec themselves, can suspend trading and quite literally, ban specific trading pools. You may say tom, a six billion dollar hedge fund isn't really that big, considering that citadel managed, isn't it like? 250 billion dollars worth of assets all hidden in different countries - and that is true but don't forget citadel - is leveraging a lot of its actual money into that 235 billion citadel.

As a fund only manages around 30 to 40 billion dollars of actual cash or of actual equity that they own and the rest is borrowed from other large banks. So technically i guess this fund is still five to ten times smaller than citadel, but a six billion dollar hedge fund is definitely not small fry by any means - and here even says that bank of america and city group have suspended all equity trading with seganti capital Management due to the bank's concern about the hedge funds bets on the sale of large blocks of shares - and it even says here the exact reason bank of america and city may be acting to save themselves from legal liability and again, if citadel ends up being investigated, It wouldn't surprise me if bank of america and other potential prime brokers also disconnect citadel as well. So this investigation is all around the morgan, stanley block trading probe and they're, basically investigating individual funds affiliated and clearly those individual funds have committed some wrongdoing and they're. Now being cut off from exchanges by those prime brokers and again, we may see some amc short sellers also being affiliated and they also may end up being cut off and the manipulation would decrease.

So these hedge funds, don't just have to worry about being disconnected from the exchanges by these prime brokers or being disconnected by the sec itself during those sec investigations, but they're also struggling due to the massive wave of redemptions and obviously the approaching recession. Guys, if you haven't already be sure to sign up to blockfy using the link in the description below to get up to 250 dollars in free bitcoin with block five, you can also trade tons of different cryptocurrencies like mana or decentraland sand or sandbox. They've also got solana, they've got doge, matic avalanche and many more and that's why more than 500 000 people and 350 institutions globally use block fight to manage over 10 billion dollars in assets. Blockfiser platform is also entirely free, requires no minimum balance and they also offer a rewards credit card with an introductory rate of 3.5 cashback on your purchases.

Obviously, as the market continues to fall and as recession looms closer, those investors aren't going to want their money tied up in risky assets, especially risky short positions and therefore they're, going to continue withdrawing their money and right now, hedge funds are bracing for 20 billion dollars Of redemptions it says investors are already scheduled to withdraw 13.5 billion from the industry in the current quarter and another 6.3 billion the rest of the year. It says, while the numbers are smaller than first quarter redemptions of almost 39 billion, they can change significantly in either direction, as time goes by. Obviously, due to the recent losses and the falling market, investors aren't enjoying watching their money disappear and therefore they want to withdraw it and go cash-based for a while or maybe invest in other things like real estate, as investors are withdrawing cash. That means these hedge funds need to sell off assets to meet these withdrawals, and it also mean their overall fund.

Size gets smaller and therefore they approach margin call position faster because they have less available margin and therefore they're just going to continue to struggle and not only is their available margin getting smaller because of their fund size getting smaller, but when they sell out of their Assets to give investors back their cash, it obviously causes stocks to fall even further, and that ends up almost being a self-fulfilling prophecy, because the market then continues to fall. More investors withdraw, which means more assets to be sold and a further market crash, and then again more assets to be withdrawn, and on top of this, blackrock is even warning of growing recession risks as the fed attempts to fight inflation. They say the fed could actually trigger a recession if they raise interest rates too quickly, but at the same time, if the fed doesn't raise rates, we're also likely to see a recession anyway, because inflation will spiral out of control and exactly that the fed is in An increasingly difficult position, as it looks to tame a red-hot inflation without triggering a recession. You've even had the chair of the fed himself.

Jerome powell, basically saying triggering a recession, is entirely out of his control and he basically has no idea whether a recession is going to happen or not. They've said the fed's hawkish pivot has raised the risk that markets see rates staying in restrictive territory. The year-to-date sell-off partially reflects this, yet we see no clear catalyst for a rebound. Therefore, the market is not expected to rebound and if they hike interest rates too much too fast again, they risk triggering a recession.

Even further they've said, economic growth in the u.s is already slowing. The brave labor statistics reported earlier this month that gross domestic product or gdp unexpectedly shrank in the first quarter of the year now. Obviously, recession is determined as two straight quarters of negative gdp growth and therefore, if gdp again shrinks in the second quarter ak within the next month, then the us is officially in a recession and obviously i'm sure when the announcement comes, that the us is formally or Officially, in a recession, the stock market will continue its plunge, and i imagine the housing market will follow shortly. After they've even said, the fed is attempting to thread a needle while wearing boxing gloves and a mouth guard which reduces its degree of freedom to act without causing damage to the real economy.

Now i'm sure you can imagine that metaphor. I imagine it's very, very difficult to actually thread a needle while wearing boxing gloves. Now i saw this on super stonk, which i thought was really really interesting. Somebody posed the question: saying: did susquehanna lose 80 percent of its value last quarter? Okay did susquehanna just lose around 2.1 billion dollars or as their investment holdings just decreased rapidly.

You can see here back in quarter 4 of 2021, they had a fund value of 2.6 billion dollars. Now that's decreased to only 578 million at the end of quarter. One now again, i think this is a telltale sign not of a fund losing 80 of its value, because it would be all over the news, but this is a fun that sold off a massive portion of its holding and is going basically cash-based they've sold off. Two billion dollars worth of stocks - maybe they lost, say a few hundred million and only sold off 1.5 to 1.8 billion lost a few hundred million, but they have overall decreased the size of their holdings because they've been selling stocks turning to cash, and that is because, Obviously, susquehanna know that a recession is coming, therefore, they're going cash based because they know the market is going to continue falling and obviously, as the market continues falling, we are going to see these hedge funds being margin called and forced to sell off their long positions And forced to cover their shorts, and on top of that unusual wells, tweeted saying turkey's five-year credit default swaps have jumped to 730 basis points the highest reading since the 2008 financial crisis, and again, this shows that it's not just the us, that's currently experiencing financial difficulty Or that's currently entering a recession, it's also the entire of europe, the uk and i'm sure many other countries as well and as howie expertly put, he said, there's warning signs everywhere if you're looking and if you know what to look for.

So it's not just the us, that's struggling with spiraling inflation and raising interest rates, but it's also europe and many other countries as well. Like the uk. Now you may say tom last week the s p 500 ran from lows of around 380. All the way back up to 415, doesn't that mean the market crashes over hasn't everything been avoided.

Surely, there's no way we're heading into a recession, but again i think this is just similar to the pullback we saw here back at the end of january or the pullback we saw here back in march. There was again obviously followed by further falling. I think we're just seeing yet another pull back or yet another fake out and over the next few weeks, we're going to continue to see the market crashing and following my downward trending line. Obviously, last week we got a bit overextended falling below my line.

Now we've had a slight pull back upwards and again, i expect, over the next few weeks, this market to continue falling and following this downward trending line back to around the 300 mark, potentially but guys be sure to leave a comment down below and dig that notification Bell, because that way, you'll be alerted when i upload a new video cheers.