Welcome back to the channel everyone today, i want to talk about how the sec has already exposed synthetic shorts once before and how they will do it again. I also want to talk about what's currently going on in the wider market, whether the market's crashing and what that really means for amc, so stay tuned and let's make some money, and now i want to dive straight in with the key information, so the fcc actually Used the term synthetic shorts in a 2018 warning of the subprime crisis sequel, have you had enough of morons in the mainstream media? Correcting you when you say synthetic shorts? Well, here's proof that the sec knows what the hedge funds are doing and knows that synthetic shorts. Actually exist, the sec published this article in 2018 and it's still on their website. It reads like every single due diligence that apes have been publishing for the last year.

It describes synthetic shorts using etfs and ones. There are multiple times more shorts than shares that actually exist, not just for amc, but for blue chip companies as well. The sec has even admitted that the majority of the stock market is synthetic as a result of this scam. That's why there's so much fun at the moment and that's why the sec haven't done anything just yet, as the problem is too big and it will be worse than 2008, if not controlled properly, so here's the sec publishing that says the 1929 market crash the dot-com Bubble the mortgage-backed securities crisis and the financial crisis of 2008 and the current china market crisis all stemmed from hazardous over leveraging as sheila bear former deposit insurance committee chairman stated regarding the 2008 financial crisis.

So the sec has basically said that this small run-up in the nasdaq in 2003, from around 1 200 to around 2800, was caused by severe over-leveraging. The nasdaq then crashed down from 2800 back down to around 1 250.. Now, if that small run up from 1200 to 2800 was caused by severe over leveraging, i wonder what caused the 2020 run-up in 2020 to 2021, the nasdaq ran from around six thousand seven hundred dollars all the way to sixteen thousand dollars, and now, if that's not Caused by severe over leveraging as well, then i don't know what is, and this is why the sec is so worried about coming down on synthetic shorts, because if they do and they don't do it properly, then the nasdaq can crash all the way from sixteen thousand Dollars back down to say, six thousand dollars, four thousand dollars or even lower guys, if you're getting a little bit worried about holding your amc infidelity due to all the recent glitches and the fact that fidelity actually supports short sellers memory are currently giving away a free Share of amc on top of their usual five free shares, all you have to do is sign up to moomoo, using the link in the description below and make your first deposit when you sign up to moomoo and make your first deposit you get the first two Free shares valued up to 3 500 each. If you can deposit a hundred dollars, then you also get a free share of amc, and if you can deposit the full two thousand dollars, then you get an extra three free shares valid with a 3500 each.

That's a total of five free shares, valued up to 17 500 and a free show of amc just for signing up using the link in the description below memory is also a brilliant commission free broker that doesn't make its money from payment for order flow, mumu and Futu make their money from margin interest and from payment fees, and therefore you don't have to worry about your trades, going through sketchy, dark pools or being given to citadel the sec report says leverage was really a key driver of the crisis. It's the reason why you ended up having to do bailouts. The data shows that many etps are exchanged. Traded products like stocks, along with their underlying assets, are a liquid.

Some subsets of etps continue to grow in number when the liquidity only resides within very few securities. Leverage across various etps appears to be at dangerous levels, which will become apparent in the next financial downturn. In many respects, etps today resemble the over-leveraged risks that have created the past significant financial, crisises and right here it even says securities lending is not keeping pace with the amount of short selling, which is increasing over leveraged short positions. This literally says that hedge funds are shorting too many shares and the securities lenders can't keep up the securities lenders can't locate those shares to give to the hedge funds, the short and therefore they're, having to create these synthetic shares in order for the hedge funds.

To do their shorting, it says the documentation. Data disclosures and prospectuses obtained by regulators and available to investors are not disclosing the extent of the excessive risks in these products. There appears to be significant emissions of material facts by some etp operators and that's exactly what the sec are trying to crack down on right now. They know that data around short selling is not produced in enough detail and therefore they're trying to expand the required disclosures.

The sec report even touches on how some securities have more shares owned by institutional 13, f filers than were issued as in entire shares outstanding plus short interest. It even says that these appear to be fictitious financial instruments, as in synthetic shares that are neither long nor reported short. Moreover, they are likely not failing at national security's clearing corporation or the nscc, and it says these fictitious positions represent undisclosed settlement, liabilities and risk. Now this is an interesting take, because the sec are saying that synthetic shorts aren't actually reported to the nfcc and therefore even the nscc has no idea on the true level of synthetic shorts.

And it says a significant amount of securities contracts entered into have not been completed now this is those fail to delivers undisclosed delivery liabilities exist that can become a liquidity crisis under stressed market conditions. Now this is exactly what's going to cause amc to squeeze undisclosed delivery liabilities as infertile delivers, will become a liquidity crisis under stressed market conditions such as a market crash, which is happening right now. Internalized and ex-cleared fails, including offshore re-hypothecated securities and hypothecation by clearing firms and custodians are not reflected in data produced by the nscc, and this is the exact confirmation we wanted that synthetic shorts are not reflected in data produced by the nfcc and therefore not reflected in The ortex data, the sec report even gives a specific example of the xrt etf. It's one example: etf with multiple owners per share on a continuous basis for years, without significant, corresponding nscc settlement fails.

We can see here that xrt has 3.1 million shares outstanding and 22 million shares shorted, giving a 715 short interest. Now, if that doesn't expose naked shorts, i don't know what does and it says if shares are not accurately borrowed for short sales, then u.s margin, requirements and net capital reporting for some clearing firms may be inaccurate and cause internal liquidity problems. Now this is exactly how large funds are going to fail to meet these margin requirements and end up being liquidated, and therefore a true escalation of the next market crisis is yet to be properly understood. Positions not backed by assets as in synthetic or fictitious short positions referred to by the sec as naked shorts can be very difficult to cover for many securities, such as xrt with multiple owners per share or amc, for example, security.

Segregation requirements cannot be complied with on a large scale, as the naked positions appear to be today. Liquidity problems from these positions can clearly be damaging to the entire marketplace. Now, you might say, hang on tom, how can xrt have a 715 short interest, but amc's short interest percentage is only around 20. Don't forget this xrt short interest.

Calculation is only based on the number of shares held by institutions. Basically, these synthetic shares only get exposed when they're held by institutions. The synthetic shares don't get exposed when they're held by retail investors, because the funds just don't report those shares as being shorted. Basically, to summarise, the hedge funds only report, those shortage shares if they've been shorted to institutional investors, not if they've been shorted to retail investors.

Now, how do we know the fcc is going to expose these synthetic shorts once again? Well, hedge funds are opposing the sec's move to require same-day reporting of short positions, because it would create volatility leading to situations similar to the gamestop market event. In other words, the hedges are worried. All of their naked shorts will be exposed when the sec passes. This ruling to provide more information around short sales and provides same-day reporting of those short positions.

It will expose the naked shorts, but i don't think the sec will pass this ruling until they have all the processes in place to ensure the market crash. Isn't too severe. Now i also wanted to quickly touch on the wider s - p, 500, and what's going on right now in the market, as you can see, the s p 500 is having another bad day and we're back down to those october lows. Now, if we take out those october lows, there's very little support until here around 3 40, which is the pre pandemic highs.

Now, obviously, amc is crashing along with the wider market and along with the wider crypto market, but as soon as those hedge funds start being liquidated, they'll be forced to set off their long positions and cover their short positions. Like amc and at that point, when that happens, the hedges will be forced to cover their over leveraged shorts on amc, but when the hedges are going to be liquidated and forced to cover, i can't necessarily tell you obviously if the s p 500 continues to crash. Like it is at the moment, then, there's more and more chance that those hedgies will be liquidated guys be sure to. Let me know down in the comments below what you think about the sec, exposing the synthetic shorts and as always guys if you enjoyed this video, be sure to check out some of my others.

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