How The Reverse Repo Market Is Related to GME and AMC
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About a year ago, on july 6, 2020, the number of reverse repurchase agreements with the fed was at zero. Nobody was using this system now fast forward to june 2021, 547 billion. This thing went from zero to 547 billion in the single year. In fact, you don't have to go to last year, just in the beginning of this year, on march and april, we had 3 billion 2 billion 0.7 billion and then the spike started.
Let me show you about a month ago the spike went through the roof. It went all the way to 200 and kept going up, and usually with that kind of spike, you'd basically say well, there's so much money all of a sudden in the market. That was not there earlier. What the hell happened in may and june.
Something crazy happened in may and june, and there's two explanations: one is that we are in an insane state of hyperinflation right now, as we speak, which is highly unlikely. We are in the state of inflation, but not hyperinflation, or you have the second option, which is way more plausible is all of a sudden massive whales put in a lot of cash into their bank accounts. For some external reason - and this is exactly what i want to explain to in this video and how it affects jimmy and amc and how it actually shows that the retail investors are actually winning. My name is tom nash and i quit my corporate job as a senior financial analyst to break down companies for you there's one thing you need to know about me: i don't take from anybody.
Ladies and gentlemen, this is going to be a five minute video, i'm going to explain to you why the reverse repo market is a clear indication that the amc and gme fight is actually being won by the retail investors and the mainstream media. Won't. Let you know about it, but i will and here's the case so first of all, what the hell is, the reverse repo, and why does it even matter for amc and gme? Well, let me be clear about it. If you and me hold cash, that's an asset for you and me either as a business or as an individual.
However, for banks, cash is a liability because they owe interest on that cash to whoever deposit it and, of course, banks are insanely regulated, which means they can't have too much liabilities versus their assets. They have to be at a certain threshold which means that if they have too much cash, they have to dump some of the liabilities, because otherwise they're non-compliant and that's why the government have created this fake system. I don't say fake, because it's illegal, i say fake, because it's literally just to solve this little problem called the reverse reports. The fed overnight gets the cash and gives the banks t-bonds with zero interest.
Next morning, uncle sam comes into the office, gives the banks the cash back and takes the t-bonds. It doesn't do nothing beyond just solving the regulatory problem of the banks having too much liabilities, which i think is a weird solution, but i mean it is what it is now. Here's the thing, the more money you have in the market you'll see a higher activity of reverse reports. That's just the way things work, and that is why this is the main indicator of inflation. Creeping up because simply put the higher the activity is in reverse repos. It means there's more money in the market, which essentially means banks have too much money to handle, which means inflation is creeping up. If you believe that kind of thing i don't know, but here's the thing while inflation is definitely to blame for the latest increase. It's not to blame for the parabolic spike now check it out.
This is a very important chart. This is the reverse repo actual numbers for the past year. You can take a look at what's going on. You see this now.
Let me max out a five-year chart. You see this, so this is actually the beginning of the pandemic march 2020.. You see the spike now. It went all the way to zero and stayed there and when it really went, parabolic was in may may 17th may 18th may 19th boom past 300 and may 20th.
It was heating up, but nothing parabolic and, as far as i know, we're not in hyperinflation. Yet now, for me, it's clear evidence: the banks are having to deal with so much cash. That's why we're seeing this insanity in the reverse repo market 547 billion - i mean historically, if you go over 300, that's called crazy. 547 billion is insane, there's no two ways about it.
Now. How does this prove that the amc and gma thing is working? Well, isn't this just an inflationary trigger? Well, yes, there's a lot of inflationary issues here, it's an inflationary indicator. However, the fact that it's so well correlated to amc on may 20th is an accident i'll explain why the banks have to deal with more cash once the hedges, the ones who are stuck in bad short positions, basically need to put in more cash in their accounts. To prevent themselves from getting margin called because the worse thing get the higher the risk that they're going to get margin called.
So more cash goes into the system. More cash gets deposited. The banks have to deal with more cash they're, actually making the problem of the reverse repo even worse. Now that is what's sending the system parabolically up now, of course, there's a lot of other contributing factors and of course, inflation is a huge part of it, but the parabolic nature of it and the clear correlation with the amc short squeeze is definitely an indicator that The hedge funds are in trouble, essentially, the hedge funds are trying to pretend that this is some sort of a mexican standoff.
We can stay here all day. No, you can't, because, unlike the apes that have to do with mainstream media pressure, psychological pressure, the fud and all that stuff and a lot of speculators in the market that are trying to make quick buck, the hedge funds are even worse. They have to pay literally for every day they have to pay interest for the short, also they're, in the risk of a margin. Call the worse things, get the higher the price goes up. The more risk of getting margin called is because, once they get margin called it's gg, it's game over. That is why you're seeing this massive pouring of money into their accounts, that is why you're seeing a great spike in the whole reverse repos. That means that this thing is about to end, because there's a limit to how much you can do this, especially in inflationary times, this system is already overused and there's so much talk about it. There's so much light on it and it's literally already about to actually go max, and that is why the old rules can't apply anymore.
The banks and the hedge funds used to use reverse repos. To basically make this thing clean. You know help each other. Now they can't the system is already oversaturated over used over stream.
This system is basically being taken over by inflation, then pushing so much pressure. On top of it might cause a massive collapse. They got ta stop at some point, there's just a limited amount of air left there before they go under. So this thing is about to collapse.
If you hold amc and jamie, i honestly don't know what's gon na happen, but this is clear proof to me that things aren't right both from an inflationary aspect as well as the clear correlation to amc and gme. We have to come out and see. What's going on next week, i'm fascinated by this. Let me know in the comments what you guys think spread this video.
So people know more of this, because mainstream media isn't going to tell you that part of the story different about inflation and all that stuff, but not about gme and the short squeeze. Thank you so much for the channel members and the patrons we'll see you guys in the next video.
Whats going on now that it's $1.6 trillion?
1.6 trillion….end game is coming
Were now at almost 3x the Reverse Repo rate since this video (1.4trillion) MOASS has never been closer
So happy I'm on the train with AMC shares 🙂
Comments plz now that rrp is over $1T now
Update: RRP to 1,130,000 BN
Game over
2 months later…we’re over a trillion in reverse repo
Maybe give us a follow up to this video in light of the reverse repo now being over a trillion dollars many days in a row…?
anyone here for the 1 trillion highscore
We're not at a trillion! Now what? What does that mean? 🧐🧐🧐. Amc and GMe still tanking 😤😭
Ohhhh ok, thank you dude! That makes sense!
Just reached 1 trillion today!
Fastfoward 1 month, we are near one TRILLIONS.
Short the vix brought me here, good content man
I know this video is 2 weeks old but I have been trying to explain to some people how the ape community of AMC is actually winning over the hedge funds even though our stock price has been stagnant for a couple of weeks. As of this morning, reverse repo is at damn near a trillion dollars…$400 BILLION more than it was just two weeks ago…
Short interest is up to over 19% and it is going nuts
Reverse repo hits $756 billion
I am fascinated about what will happen next week. Have a modest position in AMC and GME, which feels like I have bought a seat on a rocket train. Eyes wide open for ignition… 😀
i tried last 10 days to get to correlate reverse repo rise and AMC stock but i couldn't, you explained it very well !!! today its 755 billion !!!
Before May Banks could keep Short Term Bonds as investment now they can not. HF if they need cover shorts they need 1.5 *80 mln*50$=6 Bln $ not 500 Bln $
you are the only youtuber I have seen who explained this properly. Thank you!!
Can you please make a video on PSTH ? So many retail investors are in it and want to know your opinion
Guys AMC is not the best short squeeze stock GME is
I worked at a Credit Union as head of their accounting department. This was a routine each night. It was called a Fed Fund Sweep. Went to the Feds overnight and redeposited the next am. Never heard of it at a Reverse Repo Market. Thanks for all your excellent information. I am always entertained and transfixed by your energy and enthusiasm. As far as I can discern you and all your information have been spot on and you give us the straight story. Thanks Tom
1000+ shares holding since January of AMC Im not just going to HODL for myself and my future but for the rest of the apes to achieve financial freedom. But we’re all in this together DO NOT PAPER HANDS WE’RE IN THIS TOGETHER WHETHER YOU LIKE IT OR NOT LETS GO 100k 💎 🙌 MINIMUM. Insurance for the Hedgies is roughly 60 Trillion and it’s roughly 43 trillion to pay everyone back if it’s 100k per share. Whatever the reason is you’re holding…. medical reasons, financially reasons, family reasons, keep on holding DIAMOND HANDS ONLY 💎LETS DO THIS 100k 💰 LETS GO!
When everyone says squeeze is coming, it won't! It will crash and burn!!!
Same group also says CLOV is on same boat.
Tom, you’re one of the very few I trust on YouTube!
Do reverse repos mean that HF just made the Fed hold the short bag on $AMC and $GME?
HALTS have been around for a couple of decades… GME's moonshot from about $50-500 happened in just 7 days! Don't worry – be HAPPY!
What should we do now? Buy AMC before the squeeze?
The Hedge Funds are working together to CRUSH the AMC movement….The Hedge funds know the APES trade during regular trading hours……The Hedge Fund work together to lower the price during AFTER HOURS trading,,,,Which lowers the opening price the next DAY!………STAY STRONG APES!!!!!
I heard you like bluechip companies, ever heard of Stmicroelectronics? European chip company with its own fab. Makes al kinds of IC's
Perhaps the underlying problem is much bigger than we thought. Wall street took a macro view, assuming pandemic lockdown would continue, destroying economy and closing many companies; so they all made huge bets against a quick recovery by shorting everything in sight. So now they might be left holding the mother of all bags. "Too big to fail" could possibly impact the entire the entire financial system.
I’m getting a couple properties. Little apartment buildings or couple multi unit family homes and going in on divided stocks. Maybe get a franchise or two then I’ll get my dream car lol 😎
They're pre-covering naked shares, if at all this is 100% related to AMC and GME. They are in other words preparing cash for our tendies 😂
On March 31st the SLR requirements expired…