Welcome back to the channel everyone today, i want to talk about whether shorting could actually be banned during a market crash scenario and whether this could cause the amc squeeze so stay tuned and let's make some money. And now i want to dive straight in with the key information, so i don't really think i need to explain why banning short selling would cause the amt squeeze, but i'll give a quick overview. If you don't understand why, obviously, if the market starts to crash, then tons of these over leveraged hedge funds will end up being liquidated and forced to sell off their long positions and cover their short positions as well. Now, obviously, if short selling is banned during the scenario, that means the shorts can't add to their amc, short positions and they can basically no longer commit any malarkey to push the price of amc down.

Obviously, if the shorts can't short - and i mean genuinely can't short as in not on the ssr restriction, where they can still short the stock and just misreport the shorting, if shorting is genuinely banned, just like what's currently happening in russia at the moment, then obviously these Shorts can't add to their amc, short positions. You may say tom. Surely this is just a one-off thing in russia and surely this wouldn't actually happen in the u.s or in the uk or in europe or anywhere else in the world. But i think it's important to remember that both the sec in the us and the fsa in the uk did actually ban short selling back in 2008, and on top of that, many european countries also ban shorting in 2020 as a result of the pandemic to reduce Market impacts as a result of the crash.

Obviously i'll talk about these a little later in the video, but for the moment i want to explain why it would actually cause the squeeze now. Obviously, if these shorts can't short or add to their amc short positions, it means that when amc starts running up due to all the additional buy volume, they can't push the price down. At the moment, we have buying pressure from the apes and we have selling pressure from the apes, which is obviously very, very low, because apes aren't selling, but that selling pressure is pushed up massively because, obviously, all the shorts are piling into their short positions and illegally Manipulating the market to produce additional shorting and selling pressure, thereby pushing the price down. Obviously, if that shorting pressure and selling pressure was entirely removed and the only selling that was available was apes selling their shares, then obviously the price of amc would fly because there'd be nothing to hold amc down.

Now that i've explained that part, let's talk about. What's currently happening in russia and also what happened back in 2020 and back in 2008 before that, so the russian central bank has just banned short selling amid a 50 stock market, plunge as russia obviously invaded ukraine. So russia's central bank implemented a market-wide short-selling ban on thursday after the country's stock market, plunged and they've said, the ban is in place in order to protect the rights and legitimate interests of investors in the financial markets and obviously, when the market does crash in a Market crash scenario, especially if it's a violent crash, the sec, will likely implement a short selling ban to protect those financial institutions like goldman sachs, jp, morgan and other large institutions like blackrock and vanguard. When you have these huge massive banks, like morgan stanley, goldman sachs, jp, morgan, credit, suisse and many others genuinely on the line, the sec will basically do anything they can to protect the largest financial institutions, and it says, in connection with the current situation in the financial Market and in order to protect the rights and legitimate interests of investors in the financial markets, reduce risk and limit excessive volatility.

The bank of russia ordered brokers to suspend short sales on exchange and over-the-counter markets. So not only did they ban shorting in the lit exchange, but they also ban shorting in those over-the-counter markets. Those dark pools, those alternative trading systems and the sketchier darker markets, where there's less transparency now, interestingly enough banning short selling, was also something they did back in 2008. As a result of the 2008 recession, it says the sec acting in concert with uk fsa, took temporary emergency action to prohibit short selling in financial companies to protect the integrity and quality of the securities market and strengthen investor confidence.

The commission's action will apply to the securities of 799 financial companies and the action is immediately effective and, funnily enough, it says the commission is committed to using every weapon in its arsenal to combat market manipulation that threatens investors and capital markets. So, interestingly enough, back in 2008, the sec chairman genuinely believed that short selling was a form of market manipulation that threatens investors and capital markets. It's interesting to see how far we've come or not come since 2008 and therefore, if banning short selling was something they did back in 2008, there's absolutely no reason as to why they wouldn't do it again. Now, on top of that, back in 2020, it says a number of regulators across the globe responded to recent market volatility by introducing temporary short selling bans and or market restrictions.

Such bans have since expired. As of 18th of may 2020.. Other regulators, including the uk, said there was no evidence to suggest that short selling had been. The driver of recent market falls and emphasized the important role short selling plays in liquidity, provision and price discovery, but in some cases, nonetheless imposed lower thresholds for reporting short positions to ensure that regulators were able to monitor positions closely.

So back in 2020, austria, belgium, france, germany, greece, italy, spain and the united kingdom all implemented some form of short-selling bans or selling restrictions and therefore, if a short selling ban was issued as recently as 2020, it wouldn't surprise me if short selling is banned again, when The market crashes again, especially if the next coming market crash or the market crash, that's currently ensuing - is even more violent and even more significant than the market crash back in 2020 and, interestingly enough. On that note, morgan stanley are warning that the current bear market rally is setting stage for a correction. Now guys many of you may not have a lot of confidence in the stock market at the moment. There's all 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 starting to break out. I personally like to use blockfy and right now with blockfy. If you sign up using the link in the description below you can currently get up to 250 dollars in free bitcoin, obviously, bitcoin isn't the only cryptocurrency that you can buy on blockfy. You can buy tons and tons of them and more than 500 000 people and 350 institutions globally use blockfy to manage over 10 billion dollars in assets.

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Street firm is on correction watch. Despite the latest market. Bounce morgan stanley's mike wilson is bracing for an s p, 500 decline of at least an additional 13 between now and september. He said it does have all of the hallmarks of what i would call a bear market rally or like a fake rally or a fake pump before the larger dump, and he said the nasdaq has run into resistance again right here, throwing back into the 200-day moving Average, it's a good time to remain defensive because look we're late cycle he's been worried.

The inflation surge and the federal reserve's tightening policy increases recession risks it could create an environment according to wilson, where stocks perform worse than bonds, and he believes the s p. 500. Will ultimately end the year at 4, 400 about a 9 price drop from the index's all-time high here on january 4th, but obviously he does believe there will be a full decline of at least 13 from its current position between now and september. To obviously rally into the end of the year, but, interestingly enough, back in january, wilson said that morgan stanley is currently doubling down on defensives and said.

We need something below 4 000 to get really constructive and he said i do think that will happen, and he also said that this expectation is also based off the fed, not increasing rates as many times as currently planned. He said, that's probably off the table, as in the current amount of rate hikes, given the inflation that's currently out there and obviously, if there are as many rate hikes as planned, he said that would be a real elixir that would allow the markets to probably go A little bit further down and therefore morgan stanley is currently warning of a market crash. But, interestingly enough, the federal reserve is also warning of housing bubbles in the us, as well apparently exempt tweeted, saying we and occupy the feds have been calling out. The federal reserve is propping up the housing market for some time now, and he said if they're now admitting it, it means a crash is close, get ready.

So this cbs news article says the federal reserve sees red flags in the brewing u.s housing bubble. It says home buyers have faced a dilemma during the pandemic, swallow rapid price increases and forego typical steps like housing inspections or risk getting left out of the real estate market. It said those dynamics have caused some observers to question whether the us is repeating the housing bubble of the early 2000s, which led to a painful housing crash in 2006 and the great recession the following year. The answer was the federal reserve bank of dallas.

Is that the property market is showing signs of a brewing u.s housing bubble and that may be unsettling to millions of potential home buyers who are currently coping with a my raid of financial pressure points for one mortgage rates are swiftly rising, reaching an average of 4.67 Percent for a fixed 30-year loan for the week ended march 31st, the highest since 2018., and obviously, on top of that, the national median listing price for a home has jumped to a record 405 thousand dollars as of march 31st as well, and he said real house Prices can diverge from market fundamentals when there is widespread belief that today's robust price increases will continue and if many buyers share this belief, purchases arising from a fear of missing out can drive up prices and heighten expectations of strong house price gains. And, interestingly enough, it also says, meanwhile, more home buyers are opting for adjustable rate mortgages or arms. You know the exact same arms with some slight differences that contributed to the 2008 recession. It says, since these loans offer a lower initial rate for a number of years, but then adjust annually at higher rates.

Demand for those lrms has jumped 26 from a year earlier, and therefore tons more people are jumping on these risky arms, because house prices are going. So out of control, it makes their monthly mortgage payments somewhat more manageable and, most importantly, it says to examine whether the current dynamics could reflect a bubble. The dallas fed economists dug into three different market metrics their conclusion. There are signs of a market tipping point and therefore even the fed believes that the u.s housing market is currently a team market tipping point and there are u.s housing bubbles going around as well and obviously, if the housing market crashes and the stock market crashes.

This is likely to amplify that stock market crash and make it even worse and obviously, if it's a very rapid and very violent stock market crash, it's likely that the us sec is again likely to ban short selling and obviously, if the sec bans short selling and Makes it so that no manipulation or malarkey can take place against amc? Amc will squeeze instantaneously, guys be sure to. Let me know down in the comments below whether you think shorting will be banned during a market crash scenario and as always guys, if you enjoyed this video, be sure to check out some of my others. Alternatively, subscribe to the channel and click that notification bell, because that way, you'll be alerted. When i upload a new video cheers.