Today I Want to talk about how hedge funds have just 72 hours to report massive losses under a new SEC Rule And Gary Gensor has said that Tremors in the hedge fund industry currently threaten the entire U.S economy. so stay tuned and let's make some money. And now that I've straight in with accumulation so unusual to tweeted saying breaking news, large hedge funds will have just three days or 72 hours to privately tell us Regulators about extraordinary investment losses and major margin events under a new rule from the SEC So this article from Bloomberg talks about how hedge funds are now forced to provide faster reporting on trigger events and even mentions GameStop in the article. It says the regulation significantly wraps up oversight of the biggest hedge funds rather than quarterly snapshots.

Watch Dogs Would for the first time getting almost real-time look at major events managers that oversee at least 1.5 billion dollars in assets. Theory The step-up reporting will let Wall Street's main regulator as well as the Treasury Department and other agencies in Washington get a handle on Swift moving events that may pose systemic risks. This is the push to speed up the now quarterly filings known as form PF really picked up in the week of trading during the turmoil of the pandemic and when retail investors plowed money into stocks such as GameStop in early 2021 and Garagenza has warned that Tremors in the hedge fund sector could threaten the entire U.S economy. He said the private fund industry plays an important role in each sector of the capital markets.

He noted that these funds now oversee 25 trillion dollars in assets, making the industry larger than the entire 23 trillion dollar banking industry, and he said the history is replete with times when Tremors in one corner of the financial system or at One financial institution spill out into the broader economy. and when this happens, the American public bystanders to the highways of Finance inevitably end up getting her. And he also noted that the recent stress in the Regional Bank banking sector shows that systemic risks can lurk in places Regulators do not usually expect. This is obviously huge news as it really clamps down on these hedge funds and the private fund industry.

Instead of trying to hide those losses and brush them under the carpet or trying to roll those losses, input and call options, they must now tell what the SEC now I Imagine the SEC will have a wearable time when many of these funds start reporting just how much they have right now in unrecognized losses because I assume it's not just recognized losses that have already happened that they need to tell the SEC about, but it's unrealized losses they currently have on their books as well. Because obviously these current unrecognized losses could very easily turn into recognized losses if they're forced to close out of their short positions. And speaking of Citadel, you may have seen this tweet from the cabasi letter they tweeted saying four days after Silicon Valley Bank was seized by Regulators Citadel, took a five percent stake in Western Alliance back. but this morning Western Alliance Bank is now down 40 today and 55 over the last two weeks.

But they've added saying will Regulators treat Western Alliance Bank differently because Citadel has a stake. Obviously, all of these previous banks that have failed Silicon Valley Bank Signature Bank and First Republic Bank so far have had the equity shareholders or the investors set to zero. These stocks have gone to zero and these Bond holders have gone to zero as well and the only people that have been reimbursed are the depositors. But if Citadel is involved and holds a stake in one of these Banks like Western Alliance Bank were there shareholders magically this time be bailed out just as Save said that else money or we'll say that they'll be forced to act like everybody else and take on some heavy, heavy losses.

This is still a significant amount of money that Citadel stands to lose if Western Alliance Bank does go under which it likely will do over this weekend which again is also good for us as it means that Citadel is brought closer to that margin called Position Guys. Be sure to sign up to move a sponge for today's video by signing up using the link in the description below. you can currently receive up to a whopping 15 free shares entirely commission free trading Free level 2, Market data and most importantly of all, MooMoo is very easy to use and it's super simple and clear. There's tons of trading and charting tools, they've also got free 24, 7 customer service, and you can also trade around the clock with the full extended trading hours.

But something interesting that is also being brought up is what happens to these toxic liabilities that these failing banks are holding. Obviously, all of these banks have tons and tons of derivatives. Many of these derivatives are turning toxic. so who exactly buys or takes on those toxic derivatives and toxic liabilities? We know that for example, with First Republic Bank JP Morgan has just purchased all of their assets.

But it seems like the FED is bearing at least 13 billion dollars worth of losses or more specifically, the FDIC. So while the FDIC bearing these toxic derivatives and toxic liabilities and are they now prepared to pay out for these toxic liabilities when they Forge you As this tweet says, it says, the big question is these counterparties who have assumed the toxic derivatives and are now bordering on defunct, What happens to that underlying liability? Does it just disappear into the ether? Does it get bought out by another bank? Or does it get covered by the FDIC and maybe even the Dtcc as well? For example, with regard to the bundled no locate swaps to roll on regulation Sho, who holds the bag at the moment? And he said that maybe when these counterparties that are holding these flaming bags of rubbish end up going bust the liabilities Had straight back to the firms that wrote The Toxic contracts in the first place. He said: I really hope this is the case and it's not some sort of smoke a mirror obligation warehouse now I Don't think it could end up in an obligation Warehouse because they are contracts that have been written and formed between two parties and still need to be satisfied. What I imagine is these losses will be borne by the FDIC or the Dtcc.

Like has already happened with First Republic Obviously, the FDIC is bearing at least 13 billion dollars worth of losses, and obviously similarly with Credit Suisse the Swiss regulator stepped in and said that they'd bear tons and tons of losses from UBS if Credit Suisse did end up losing money. So I think this basically means that when the squeeze does happen, it's likely we'll end up being paid by the FDIC and by the Dtcc and not by these failing Banks or hedge funds themselves. But I do actually think that's positive in a way, as it might even encourage the FDIC to close out of these short positions sooner to do less damage when a squeeze actually happens. Obviously, it would be better if for the FDIC to close out now and allow the squeeze to happen now rather than allowing the squeeze to happen in say, another 6 to 12 months time when the hedge funds have dug themselves an even deeper hole although hang loose and Mike Petterman did some digging and it seems they found where even the old Layman Brothers toxic credit V4 swaps were actually hidden.

He said, nice digging. It'll be quite similar to what they did with mortgages back in 2008 and how they swept them into Vehicles like the rational Special Situation Income funds, he said, you'll find all of the toxic Mbs's from Layman Bear Stearns and the rest tucked in here. As you can see, these are some new funds or some new Cdos containing newer JPMorgan mortgages but also containing Legacy Lehman Brothers mortgages as well. So maybe they may end up packaging up these toxic liabilities and trying to hold out on the squeeze for longer and selling these toxic liabilities as a separate investment product.

This would obviously allow the losses to be born and spread by other Hedge funds and private Equity firms and other Banks as well. Now I Also want to touch on something slightly off topic and talk about Wall Street Bets and how Wall Street Bets was obviously infiltrated Wall Street Bets was obviously a giant Reddit form or obviously the GameStop and AMC squeeze thought process originated from. Wall Street Bets was obviously infiltrated some time ago and it's clear as day to see based on what's happened over the last 12 to 24 hours. Basically, the mods of Wall Street Bets created a crypto coin just a few days ago, but it seemed in the early hours of this morning those mods actually stole all of the money from that crypto coin and rug the project.

One of the mods that wasn't involved in the stealing tweeted at one of the other mods saying if you don't get in touch with me within four hours, I will file a police and FBI report. He said your details are fully docked so I don't understand why you do this. He said if somehow there's an explanation, you have to speak up. but I don't know how that's possible.

You can still return the money. So this mod stole around 600 000 US dollars from regular retail investors that had purchased this new Wall Street Bets coin. But then two of the mods stole all of the money from the liquidity poll. One mod to create the transaction and another mod to authorize.

So it seems like Wall Street Bet has now turned into a place to even try and scam retail investors. and that's why I think that at this point, Twitter and YouTube are basically your only reliable sources of factual information. Also, something else I wanted to quickly touch on as David tweeted. It seems the Gtii Brokers have been inputting their own Contra Q sips into our accounts.

He said the restricted stock the Gtii have issued came with its own Q-sip number. yet we've received Contra Q sips or temporary Q-sips instead. and in Google it says a restricted use. It reflects the status of any restricted stock in a transaction.

But obviously these restricted Q sips have obviously been replaced with temporary Contra Q Sips instead. Again, it just seems like even more sketchy behavior for these. Brokers to try and avoid paying out for the squeeze. But guys, be sure to let me know what you think down in the comments below.

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