Welcome back to channel everyone today, i want to talk about how hedge funds could crash by nearly 50 as a result of a new proposed sec rule and how this could cause tons of major banks and hedge funds to either collapse or to break apart. And i also want to talk about what impact this all have on that amc squeeze so stay tuned and let's make some money, and now i want to dive straight in with the key information. So a proposed sec rule could staff hedge funds of cash by making it nearly impossible to raise money from pension funds. Pension funds in the us may be unable to invest in hedge funds.

If a sweeping package of financial reforms by the markets regulator is passed in its current form, the us sec is proposing a rule that aims to stop private fund managers. Aka hedge fund managers, from evading legal liability for actions leading to investment losses after the collapse of archaeos capital management. Many of these major banks and pension funds are now suing bill, huang for their investment losses, but obviously hedge funds and hedge fund managers depend on this indemnity to obtain their financial insurance. If these hedge funds and hedge fund managers lose this indemnity for investment losses, then they won't be able to obtain that insurance and pension funds can only invest in hedge funds.

If the hedge fund is fully insured, it says, without the indemnification insurance becomes prohibitively expensive or completely unavailable, and without certain types of insurance institutions, including pensions, won't invest in a hedge fund and that could starve hedge funds of much needed cash and a huge percentage of Hedge fund assets comes directly from pension funds. It says an exact count of the percentage of hedge fund. Assets that comes from pensions is difficult to find given limited disclosure requirements, but investment data company prequin estimates that 40 to 50 percent of hedge fund assets come directly from pensions. If this sec ruling passes in its current form, hedge funds could lose nearly half of their assets as these pension funds would have to withdraw their cash and invest into mutual funds, tracker funds or etfs, and obviously, if these pension funds withdraw their cash, then many of These large banks or hedge funds will end up flat out collapsing and being liquidated or may have to split off their assets and liquidate a portion of them.

Gold telegraph, tweeted, saying breaking news, hsbc's largest shareholder, has called for a breakup of the london-based bank and boss. Buns replied saying this is huge, just think if credit suisse could save itself from collapse due to the current archaegos situation, they would effectively create two separate banks. One bank would stay afloat and hold all the remaining assets, and the other bank with the toxic liabilities, would end up going bankrupt. This could potentially be a tactic, that's implemented by many other hedge funds as well.

They may try and split off a portion of their hedge fund containing all of their toxic over leveraged, long and short positions, and let that portion go bankrupt and split off a separate portion with their more reasonably leveraged products and allow it to continue. I think we could actually see this tactic being implemented by many different hedge funds, large banks and prime brokers, because obviously bank of america, the prime broker for citadel. If these institutions can split off a portion of their investment fund that contains all of the toxic over-leveraged long and short positions and allow it to go bankrupt, the remaining portion would be more risk-free. Obviously it wouldn't be entirely risk-free.

It would just be slightly less risky, as it wouldn't be wildly over leveraged and obviously the portion that contains the toxic assets and the toxic liabilities would need to be wound down and the toxic assets or the cash remaining in those toxic assets would be used to Cover and pay for the toxic liabilities. Obviously, i'm sure the dtcc would need to get involved as well, and all the members would have to stump up cash to ensure that all of the toxic liabilities can be wound down and closed properly and obviously inside those toxic liabilities is going to be a massive Amount of over leveraged amc, shorts that will have to be covered and the amc stock will have to be bought back from retail investors at whatever price we set and obviously, if these hedge funds lose 50 of their assets, they're obviously going to struggle to meet those Margin requirements and it's going to be practically impossible. They'll have to sell off 50 of their fund to free up the cash to return to these pension funds, which will obviously include having to sell off their long asset positions and cover their shores. Obviously, that's going to cause many of these hedge funds to go bankrupt and end up being liquidated, and it will probably end up causing a market crash if these hedge funds are forced to sell off large portions of their portfolios and obviously, both a market crash and Hedge funds, being liquidated, is great news for amc, as it means these hedge funds will be forced to cover their short positions.

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They got off scot-free when millions and millions of people lose their pensions and therefore it's a lot less risky. If these pension funds are restricted from investing into hedge funds and can only invest into market trackers or etfs, that means pension money will be safer, as it won't be invested into risky hedge funds. It means that people won't lose their money, and if these hedge funds do go under, they aren't indemnified from the legal liability it effectively would make the market much safer. Overall, as these pension funds wouldn't be at risk of losing massive amounts of capital and massive amounts of regular everyday americans saving money, but obviously to get to this point, the sec have to pass this ruling, and these pension funds have to withdraw their cash from the Hedge funds - and i also wanted to talk about the state of the current ongoing market crash bank of america's heart net - sees pain and exit if the s p, 500 dips below that 4 000 level, a drop below 4 000 index points for the s p.

500. Will be a tipping point which could potentially trigger a mass exodus from equities? It says investors have already started fleeing stocks with outflows from equity funds over the past three weeks, adding up to the worst since march of 2020.. Interestingly enough, the s p 500 entry point for the huge 1.1 trillion dollars of inflows into stock funds, since the start of 2021 was at 4 274 index points, which means that pain and exit aka capitulation requires a drop below 4 000 points and, interestingly enough, morgan Stanley predicted the s p 500 has a maximum downside to 3 800 in the near term and possibly as low as 3460.. Now, i think that's a vast change compared to what morgan stanley and many of these other large banks were saying only a few weeks ago when inflation was transitory and the s p 500 was just about to set new highs.

Obviously, if we look at the s p 500 for the moment, it's currently hanging around this 4100 mark and it hasn't yet fallen past those february lows. But if we compare this to the qqq, the qqq has fallen past those february and march lows and is holding somewhere around the 3100 mark. Looking at the s p 500. This first blue line is that dreaded 4 000 index point level and any falling below that could cause a free fall down to around 3 500..

I personally think over the next few weeks the s p 500 will be falling below that 4 000 index point level and will continue falling to somewhere around 3 500. All those pre pre-pandemic highs, if not lower, and while the stock market is crashing, the housing market is also starting to crash as well. Foreclosure filings are up 132 from a year prior. It says when we were reading through real estate of this month, three stats caught our eye, the first that the number of active foreclosures edged up by more than 7 000 in march, the first year-over-year increase in almost 10 years.

Secondly, more than 78 000 us properties had a foreclosure filing during the first quarter of 2022, which is up 39 from the previous quarter and up 132 from a year ago. And the third is that serious mortgage delinquencies those 90 days or more past due are 70 higher than they were pre-pandemic, considering that foreclosures across the board are up massively from last year. I suspect the housing market is starting to crash alongside the stock market and elon musk. Also tweeted saying, since i've been asked a lot buy stocks in several companies that make products and services that you believe in he said only sell if you think their products and services are trending worse, he says, don't panic when the market does now.

Obviously, comparing this to amc, we know that amc's products and services are not trending worse. They are continuing to do well and have been getting better and better and better. Over the last couple of years. We know that amc's price is falling, but we know that that also doesn't make sense.

Amc is continually getting better and is beating earnings time over time. Over time again, we know the bear case for amc is absolutely irrelevant and there's tons and tons and tons of key pointers for the bull case for amc. Amc is improving its outreach by acquiring tons of new cinemas they're, improving their offering by accepting cryptocurrency and they're. Taking on external companies like hymc, the gold and silver mining company, and therefore, i personally believe that amc's stock price will continue to improve as soon as these shorts are forced to cover.

We know the stock market is currently panicking and there's tons and tons of illegal naked shorting on amc. But as soon as it's illegal naked shorting is exposed when the market crashes and these funds are forced to cover their short positions, then all will be proven right. Guys be sure to, let me know down in the comments below what you think about hedge funds crashing by 50 and what you think about tons of hedge funds and large banks, either being forced into liquidation or forced to break apart and as always guys. If you enjoyed this video be sure to check out some of my others, alternatively, subscribe the channel and ding that notification bell, because that way, you'll be alerted.

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