Welcome back to the channel everyone today i want to talk about the true cost to shore amc and actually just how much it cost the hedges to reset a fail to deliver position. But first i also want to talk a little bit more in depth about these divorce puts and what caused the hedges to lose control and to stop resetting their fail to delivers back in january and again in june. So stay tuned and let's make some money. But before i dive into the video, if you haven't already be sure to sign up to mumu using the special thomas james, investing promotion, not only do you get a free stock worth up to 350 dollars, and not only do you get a second free stock with A guaranteed value of 50 on top of that, but you also get a third free stock with another guaranteed value of thirty dollars, linked in the description below so that's at least eighty dollars in guaranteed free stocks, just for signing up with moomoo and depositing some money.

You could always sell those free stocks and get two entirely free shares of amc, and i want to dive straight in with the information so i covered these divorce puts in my video yesterday. What these divorce puts show is the number of failed delivers that are reset each and every day, and those failed to deliver spiked massively in january, with around 89 million, failed to deliver resets and then trailed off, obviously down to 2 million to 3 million, and then Back again here in may it spiked massively up to 133 million for the delivery sets 400 million. Further delivery sets, but again then trailed off for the rest of june and into july. But right now, as of september, we are spiking massively once again, with 615 million failed to deliver resets and over 880 million failed to deliver resets in one singular day now.

Obviously, these divorced puts or further deliver resets can't necessarily be used to gauge the true number of naked shorts, but what it does show you is on a daily basis, just how many fail the delivers are being reset. So, for instance, in one singular day we had one and a half times the entire float of shares being reset and further delivers in one day and again, another float and a half the day after and now, there's two things, that's really playing on my mind. The first one is, obviously they stopped resetting their filter delivers in january, which caused the run-up in january, and they also stopped resetting their filter delivers in june or the back end of may, which also caused the run-up in june. But was it the fact that they stopped resetting their failed to deliver positions which caused the january and june run-ups, or was it the january and june run-ups which stopped them from resetting their fail to deliver positions? It's a bit of a question of what came first between the chicken and the egg.

Did they stop resetting and then amc ran or did amc run and then they just couldn't reset and then the second thing, that's playing on my mind, is actually what physically caused them to not be able to reset causing that january and june run. And how do we replicate it again right now now wyatt actually has some thoughts on this over on twitter. He says we ran up in january because they couldn't handle the inflow from the fomo of wall street bets boom to robin hood and the apes diamond hand mentality. They needed to bring in big daddy citadel to handle the inflow in january and that's why they couldn't reset any more further delivers.

And that's why amc ran up in january or that's why amc run up and force them to not be able to reset their fell to delivers? And then wyatt says we ran up in june because of the test that restricted certain over-the-counter trading and dark fibers, which he says is a loose term and because of that, all retail orders for a short period of time were directed to the lit exchanges. So it looks like january was caused by inflow to lit exchanges, and it also looks like june was also caused because of giant amounts of inflow onto the exchanges as well, and somebody asked the question saying i knew this and that's why we ran in june. Okay, but what about now and wide says well: apes have to understand the power of buying direct, the nasdaq and the new york stock exchange and therefore, if we can buy our amc through lit exchanges, instead of routing our orders through the dark pool with weeble and Robin hood, then we can effectively do the same thing and overrun their systems with giant amounts of inflow on delay. Exchanges, although astro reckons that actually, i think, there's no shares left and all of the shorts are being rotated around in the call options you can see from this chart back in late january and february, the blue line was way higher than the red line.

So therefore, actual shares being purchased was way higher than amc call options being purchased. However, if we look towards june and now the red line is way way way higher, i mean there's way more volume in call options than there is in actual shares, being traded and therefore there's barely any shares left to buy in the lake exchanges or on the Dark pools either, and it's more just these shorts being reset with the divorce puts and the in the money call options. Hopefully we can find an ape with more wrinkles than i to kind of get on the case and try and figure out what actually caused the hedges to not be able to reset their failed delivers anymore and what caused them to lose control and how we can Exactly replicate it something else, i also want a wrinkle brain ape help with is some cycle theory. Most of the cycle theory at the moment suggests that cycle one is between these blue lines between january and june, and it suggests that cycle two is between these two lines between january and september october, and therefore at the moment, it puts us pretty much right here At the very end of cycle, one where we had this small run up and small pull backwards before the break of 14.

As you can see over here, we had that small run up to 52 and now a pullback, and maybe now next week or the week after we're just about to get started into cycle three, but something that i was wondering is what happens if cycle two has Been massively massively elongated into these two blue circles that i've drawn here, obviously in january we run up, came back down, traded flat for a little while and then had two small humps upwards before a small pullback trading flat again and then obviously the dune run up. Now in june, we've obviously had the run up. The pull back again are trading flat for a while, and maybe now we're starting the first hump and potentially second hump before trading flat for another three or four months. Potentially now.

Obviously i don't know too much about the cycle theory, as my brain, unfortunately isn't that wrinkly. So maybe we could have astro's thought process on this to see what he thinks of my potential idea. Obviously, i'd much rather be here in cycle, one at the very end of cycle two and therefore i'm most probably wrong, i'm just trying to think of alternative ideas. Now i also wanted to talk about the potential dollar value of how much it cost the shorts to reset or fail to deliver position us treasuries, fed funds rate and failures to deliver liquidity to fight the apes failures to deliver as apes are something we've become familiar With it happens with our favorite stocks all the time, however, it also happens with u.s treasury bonds, and i've found some interesting public data for some wrinkle-brained apes to take a look at as somehow it's tied to not just amc but also gamestop as well.

For those that don't know the treasury and bond market is estimated to be six times larger than the u.s stock market. It's the stock market's daddy and what happens in the bond market influences the stock market. So while you may not care about the measly one to three percent returns currently available on u.s bonds, it matters a lot as the bonds can tell us what is happening with the liquidity and the rest of the market. In march of 2020, there was a crazy short squeeze in the bond market and that may have actually what caused the nose dive in the stock market.

Mainstream media will lead you to believe it's a flight to safety. No, it's not our flight to safety. Joe's stock trader doesn't pull all of his money out of the qqqs and go to tlt just for safety. It's the banks and large institutions piqued your interest, let's dive in, i was digging into the question which i never found the answer to and would love some help with.

If someone can enlighten me on it as to whether dark poor trades that create further delivers, actually get reported to finra or the sec, my theory on it was since it's not on the exchange. It had not been reported, as it would be trades between two entities, but anyway, question for another day. So we did the google search and that led into this graph here, and this shows the daily total us treasury and agency failure to deliver in a us dollar position in billions of us dollars. And it shows that for the past year, there's been between 13 and 67 billion us dollars of treasuries that are not delivered to the appropriate party on a daily basis.

So banks and entities such as citadel are clearly creating liquidity for themselves through shorting us treasuries, and what's the penalty for this well per this website linked above the penalty of said, failover delivers is three percent less the federal funds rate which this past month has been At 0.09 percent, this means that yesterday, when 36 billion in u.s treasuries didn't go to their appropriate purchasing party, the responsible party had to pay in total, only 2.8 million dollars per day for not delivering 36 billion of goods. Now, i'm not quite sure if this 3 less 0.09 fee actually applies to stocks as well as treasuries, but i think it's potentially a good idea to go on of how much one party would have to pay another to reset their failure to deliver position. So, therefore, you can take 884 million shares of amc times it by the current price of amc, which is 40 and then times by 3, less 0.09 percent, and that's potentially how much it costs the hedges on a daily basis to reset their failure to delivers. Now, for those apes that don't have a calculator on hand, that's potentially 931 million dollars, that's being paid on a daily basis, when there's 884 million failure delivers being reset, and therefore this is why the hedges cannot continue resetting those failure delivers forever because, as a collective, It costs them 900 million dollars on a daily basis for those reset transactions, and he says i find this interesting that it's so systemic clearly and the dtcc and the ficc and finra and the sec and everybody else do nothing clearly to fix the problem.

So, while trying to wrap my smooth brain around this and trying to figure out the difference between agency and treasury, since the chart shows both - i found another graph for us to put in our pipe. This one to me is a true smoking gun. This graph is brought to you by the office of financial research on short-term funding, monitoring and federal reserve bank of new york primary dealer statistics. Now, as you can see here, this is the primary dealer aggregate fails to deliver on u.s treasury securities, so the peaks of failure to delivers on u.s treasuries are on january 27th.

Hmm wonder what happened on that day. Vlad and kenny there's also another peak between march 3rd and 17th, which is the amc battle for 1401 and the run-up, as well as the march run up on gamestop as well. Another peak on april 14th, the low of the gamestop april trout, possibly extra liquidity, was used to keep down pressure on 420, which has expected was a t plus 21 and 35 expectations and plus it's a mean worthy date. Nonetheless, another peak on june, the second, which was that day of amc's all-time highs and also coincided with a run-up on gamestop as well again, another peak on june 23rd, and that corresponds with the macd crossover to the downside for amc and the start of the decline.

Through july and august, therefore, as the too long didn't read, summary amazingly high daily furlough to delivers on us bonds proving consistent, shorting peaks of the failure to delivers of treasuries also have to coincide with peaks of gamestop and amc's graphs. Now something else that i found absolutely ridiculous is that gary got it wrong. Kenny was supposed to get a subpoena, but instead they subpoenaed michael, bury for gamestop, michael brewer, tweeted saying so, who got an sec sapoina over gamestop. Actually, i know who they're on my sapoina and with all that's going on in the world.

I wonder why clearly, michael brewery is not happy about getting subpoenaed for gamestop and i can only imagine that vlad and potentially kenny as well didn't get the same subpoena. But strangely i imagine probably roaring kitty has also got one if michael brewery's got one too now. I also wanted to touch on evergrande and look at the actual exposure to china's us dollar. Evergrande barnes ashmore has a 433 million exposure.

Blackrock has a 394 million dollar exposure ubs with 276 million and hsbc, with 207 million dollars of exposure. Now this is just the direct exposure on the evergrande us dollar bonds, but i also wonder how much these banks and institutions had invested directly in the evergrande stock as well, and i also wonder on a similar note. If any of these banks and institutions wrote credit default swaps on the evergrande debt, thinking that the evergrande debt was absolutely safe and there was no way evergrande could go bankrupt, and i wonder again if these banks and institutions packaged up those credit default swaps and sold Them as synthetic cdos to other investors as you'll note from that clip that i showed you from the big short a few videos ago. The potential market for credit default swaps and synthetic cdos is 20 times the size of the market for the actual bonds themselves.

And therefore, while ashmore have a 433 million dollar investment directly into the evergrande bonds, they could potentially have a net exposure of over 8 billion. Guys be sure to, let me know down in the comments below what you think about the true cost of shorting amc and resetting those fairly delivers. And, if you haven't already be sure to sign up to moomoo using the special thomas james. Investing promotion to effectively get two free shares of amc just for signing up and depositing some cash, and, as always guys, if you enjoyed this video, be sure to check out some of my others.

Alternatively, subscribe to channel and bring that notification bell, because that way, you'll be alerted when i upload a new video cheers.