Welcome back to the channel everyone today i want to talk about how there will be massive margin, calls coming on monday as a result of new margin, haircuts being implemented and becoming effective monday morning, so stay tuned and let's make some money. Now you may say tom is this: just a click bait margin calls incoming video or are there some actual large margin, haircuts being implemented just around the corner? Is this just some small two, three or five percent margin, haircuts or larger 25, 50 or 100 margin haircuts for large securities? So did i want to go through this new notice from the dtcc which was published on april 29th and is being implemented as early as the second of may aka, on friday afternoon, the dtcc told their market participants that they would be implementing new haircuts coming on Monday morning busy brands tweeted asking james if he could quickly summarize it or explain it to him like his joe biden, james replied, tweeting, seeing marge is calling and even gamestop is putting on their marge voice, because even gamestop knows that margin calls are coming. So i want to go through this listing and only really point out the key margin haircuts that are being implemented monday morning. That will have the largest impacts, and i think first up on the list is any mortgage-backed security issued by a u.s agency or u.s government-sponsored enterprise.

That's issued below a double-a rating will suffer a 100 percent haircut. So basically, any government sponsored mortgage max security below a double a rating will be completely worthless as of monday morning. We're also seeing any interest bearing agency, unsecured notes, also with a double a rating or below, will also suffer a 100 hair car. On top of this, we've even got any corporate ones, with a aaa rating suffering a 20 margin haircut.

Obviously, as that rating decreases, the size of the margin haircut increases up to 100 percent. On top of this, we've also got any asset-backed securities, even the ones supported by a u.s government conservatorship. That's rated triple-a will receive a 35 haircut again. If it's double a it suffers a 45 haircut and if it's a rated or below, then it receives a 100 hair car.

Now, i think the one that will do real real damage is any equity securities, whether it's listed on a u.s national securities exchange like the new york stock exchange or the nasdaq that has a market price of over ten dollars instantly receives a 25 haircut and if The stock is priced below ten dollars; it suffers a haircut, that's even worse. If the stock is priced below five dollars per share, it receives a one hundred percent haircut. If it's between five dollars and seven fifty it's a fifty percent haircut and obviously anything above that 10 mark instantly suffers a 25 hair car. That basically means that every single hedge fund has just had the value of their fund slashed by 25 for margin requirements.

Even those funds holding stocks like amazon, apple, facebook, google and many others have just received a 25 haircut on their entire fund value for margin requirement purposes again. You've also got any equity. Securities warrants also suffering an immediate 50 haircut with anything priced above five dollars per share and a 100 haircut for anything priced below five dollars per share knowledge that was a load of information thrown directly at you. To summarize it, it basically means that all stocks have received at least a 25 haircut, and many mortgage-backed securities and asset-backed securities are also suffering 25 and above haircuts as well.

That basically means that every single hedge fund out there has had their entire fund value instantly cut by 25 as of monday morning. That obviously means that many hedge funds will struggle to meet those margin requirements and will end up being margin called unless they can pluck up the additional cash. It will force many hedge funds to sell off some of their assets to get the 100 face, value or 100 cash value back from the sale of their shares. For example, if there's a hedge fund out there holding a billion dollars worth of apple stock, that will only be classed as 750 million dollars worth of stock.

For those margin requirements to meet the full one billion dollar margin requirement, they would have to sell off their entire apple, holding. Obviously, that's causing lots of panic in the market and considering the nasdaq has just broken below those january february and march lows. We're seeing a massive influx of searching for the term margin call now guys many of you may not have a lot of confidence in the stock market at the moment. There's all of this market manipulation and market fraud.

That seems to be going entirely unpunished and that's why i personally also invest in cryptocurrency, especially now that bitcoin is trending upwards. I personally like to invest using blockfi and right now, if you sign up to block five using the link in the description below you can currently get up to 250 dollars in free bitcoin. Blockful also offers tons of cryptos that you can buy hold and trade, and that's why more than 500 000 people and 350 institutions globally use blockfy to manage over 10 billion dollars in assets. Blockfire's a platform is also entirely free to use and requires no minimum balance.

Blockfire also offers a rewards credit card with an introductory rate of 3.5 cashback on your purchases also paid in crypto. So you can continue to accumulate more and more there's, also no annual fee and no foreign transaction fee either, and the card is currently available in the united states, so guys be sure to send it to block file using the link in the description below to get Up to 250 dollars in free bitcoin as attendees at points out, the term margin call has broken out in google trends over the last few months. We've not really seen margin call being searched too many times, because obviously not many retail investors and not many hedge funds were too worried about receiving a margin call, but as of the last week or two that term has been skyrocketing. This basically shows that tons more people are being margin called as a result of the crashing stock market.

Now i also want to talk about how many other funds, just like citadel securities, are using the same total return swaps to hide their true positions as that were being used by bill huang. Obviously, this article is titled archaic us use swaps to hide their positions and other funds are using them as well. So this article starts by talking about how total return swaps actually work. It says a total return swap is pretty much like owning a stock.

You get the gains if the stock goes up and you lose money if it goes down, but you don't technically own any shares. It says. Instead, you have a contract with a bank to get the gains and pay the bank for any losses to hedge its risk. The bank will buy the shares rather than you buying them directly, and it says hedge funds like archaegos, love this arrangement because it lets them hide positions from the market and exempts them from disclosure requirements.

Bankers love it because the swap comes with juicy fees. Not only do our chaos have to pay the bank for any losses that they suffer, but they also have to stump up a 5 or a 10 arrangement fee. Now five or ten percent may not sound like a lot, but obviously when rk goss enters into 100 billion dollars worth of total return swaps, that's a 5 billion profit instantly for that large bank, and it also talks about how these hedge funds can also use. These exact same total return swaps to hide their short positions.

Obviously, bill huang used total return swaps to hide bets that the stock would go up, but they could just as easily be used to hide huge short positions as well. It says if a hedge fund wanted to short a stock without anyone knowing how big their exposure truly was. A swap would be the natural choice. The fund could do numerous swaps with different banks.

Just like rkgos did step one. A hedge fund enters into a total return swap contract with a large bank. Let's say it's jp morgan. The hedge fund wants to short a billion dollars worth of amc and now, instead of jp morgan going into the market and locating a billion dollars worth of amc for them to shore jpmorgan, provide the total return swap contract and fulfill the contract without actually hedging their Position jpmorgan doesn't actually have to hedge the contract by shorting the amc stock themself there's not actually a requirement to do that.

All they're doing is entering into a contract with a different party. Obviously, if amc stock falls, then the hedge fund will profit and obviously jp morgan will have to pay them out additional amounts. But obviously, if jp morgan doesn't really expect the amc stock to fall, they don't have to pay out any money and can just take all of the money from the hedge fund that entered into the contract. There's then also nothing that stops this hedge fund entering into the same contract, with many other large banks to run up a 10 20 or 30 billion short position on amc, and obviously these other banks won't say no to the position because they aren't trying to short Amc stock themself and therefore don't ever have to locate any shares, and obviously none of these banks will be any wiser about the true short position of the hedge fund, because one the hedge fund doesn't have to report the short position and two all of these other Banks haven't bothered, shorting, the amc, stock, themself and therefore they've never actually borrowed any shares, because no shares have been borrowed.

It's not difficult to locate that amc stock and therefore, all of these new banks just enter into the same contract unsuspectingly, and that is how hedge funds can hide massive short positions in amc, using total return swaps - and it says, with the hedge funds, bet split between Various banks, no one, would know how vulnerable the fund is and how vulnerable the stock is to a short squeeze. And, interestingly, je house has made some very, very close similarities between bill huang and ken griffin. He says archaic is huang, got banned from trading in asian markets before but flourished in the us markets, and he said guess who also got banned from asian markets before as well correct, citadel's ken griffin. He was previously banned for market manipulation out in china, and he said it seems like the u.s stock market provides enriched soil for market manipulation, and i think this is another link in terms of how ken griffin taught bill huang how to manipulate the market.

Obviously, ken griffin had already been banned from manipulating the market out in china and therefore he taught bill huang how to manipulate it as well after bill was also banning asia. Ken griffin taught him not only how to manipulate the asian markets, but how to manipulate the uk markets as well. And i also wanted to talk about not only how we're going to see margin calls on monday, which will push the market lower, but also about the massive week we have coming up next week, the cabesse letter tweeted saying next week. We have number one a massive wave of s: p: 500 earnings.

We also have these new margin requirements coming in on monday morning as well. We also have the first ever 50 basis, point rate hike expected on wednesday. We've also got a fed meeting and a statement from jerome powell and finally, we've also got the april jobs report coming out on friday as well now. Obviously, this is a massive amount of catalyst that could send the wider market tumbling further, not only with the market.

Full on monday, as a result of these new margin requirements and these margin haircuts, but we've also got the wednesday rate hike and we've also got the april jobs report and the capacity letter said if you think this week was eventful, we're just getting started, buckle up And i think to really amplify this message as well: even tradingview, the charting platform with 400 000 followers tweeted a photo of friday's heat graph. We can see that pretty much every single stock in the s p 500 was a dark red because they fell more than 0.75 percent. That is obviously a wave of red across the entire market, just showing that the market crash is continuing guys be sure to. Let me know down in the comments below what you think about these new margin haircuts and what you think will happen on monday and as always guys, if you enjoyed this video, be sure to check out some of my others.

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