Welcome back to the channel everyone today, i want to talk to you about how the shorts are running out of steam. How amc is getting too expensive for them to keep shorting and how the moas is imminent, so stay tuned and let's make some money, but before i dive into the video, i just want to give a massive shout out to the 4 900 of you that have Currently, dinged that notification bell, because you guys are always the first to watch a new video as soon as it's released so guys be sure to drop a like down below subscribe to the channel and ding that notification bell. If you haven't already so you don't miss another video, just like this one and just a quick one before i dive in with the key information, be sure to sign up to moomoo using the special thomas james, investing promotion. Not only do you get a free stock worth up to 350 dollars, and not only do you get a second free stock with a guaranteed value of fifty dollars, but you also get a third free stock with another guaranteed value of thirty dollars.

On top of that, and that's at least eighty dollars of guaranteed free stocks, just for signing up with moomoo and depositing some money, you could sell those shares and get two free shares of amc linked in the description below, and i want to dive straight in with The key information, so here we've got the tuesday 7 a.m. Ortex update. We can see that the shorts borrow 10.9 million shares and returned 2.4 million of those leaving a net borrow of 8.53 million shares, but the important thing that i want to bring to your attention here is the cost to borrow in the other video i mentioned, the Cost to borrow max had been going up but to more importantly, pay attention to the cost to borrow average. Now, when i made that video, the cost to borrow average was still around one percent, but it's now increased to two percent as of tuesday at seven a.m, and if i bring up the wednesday 7 a.m or tex update, we can see some more borrowed shares.

Obviously some return shares and another net borrow increase and the cost to borrow average has gone up yet again. Now, obviously, we also saw an increase in the cost of our maximum, but it's more important, seeing that average rate go up because that's the rate that most shorters are paying, obviously being the average and combining that small increase with an all-time high in estimated current short Interest and an estimated current short interest percent of free float. I think things are going to start heating up now. Obviously that is only a small increase in the cost to borrow average.

So we need to keep watching this rate and look for any larger increases over the next few days in the next few weeks. Now. Something i also wanted to talk about is why i think that the shorts have just made their final last ditch attempt to try and crush the price of amc. As you can see over the last few months, the number of shares available to borrow has been steadily decreasing up until it almost fizzled out at the very start of september and the end of august.

Obviously, more and more people are moving away from brokers like robin hood and weeble that do lend out your shares to brokers like fidelity, where you can turn share lending off and where you can root your orders directly into the new york stock exchange. And that means that over the last few months, the number of shares that are available to borrow has been going down and down and down. However, as we can see over the last few days, the number of shares available to borrow has rocketed massively, and the price of amc has been very clearly manipulated. Over the last few days, we've seen these massive short attacks and very very obvious stair steps down, which is a clear sign of manipulation.

Over the last week, the shorts managed to destroy two weeks worth of gains in only six days. Therefore, very very obvious signs of manipulation and i think the hedges last its attempt to try and crush the amc price and provoke as many paper hands as possible. They obviously managed to just about dip amc below this long-term trend line, thereby inflicting maximum pain and maximum panic and to try and get as many paper hands as possible out of the amc stock. I think this is the final, ditch attempt and their last number of shares that were available to shore - maybe we'll see another few days of them trying to push it down.

But i really think this is basically all of the shares that they have had available over the last few days. We will have seen some institutional selling and that's probably, where they've sourced these final shares available to sell. Therefore, we've now bought even more of the float. Yes, maybe we've had some paper handers, but i'm sure a lot of people have also been buying up that institutional selling and therefore we probably now own, even more than 80 of the flow, and especially as we've been buying them in brokers like fidelity, where we can Turn our share ending off and where we've been routing our orders direct to the new york stock exchange, i don't really think there's going to be many more shares available for them.

I think we're going to see a continuation of this trend and very very minimal shares available to borrow and available to shore. I think, over the next few days, in the next few weeks, we're going to push back over this long term trend line and push back to our recent highs of 52 and above now, i also wanted to go over a potential evergrande bailout and what that might Look like and also give you a bit of an update on the debt ceiling and effectively the overall market position. It sounds like the ccp are going to bail out or take over evergrande, making it a state-owned entity. They will bail out the chinese bonds and citizens, but not anyone else, including the americans, on this list now.

Obviously, this is a list of institutional bondholders, us-based bondholders that owned the majority of that 300 billion dollars worth of those evergrande bonds. Obviously, on here, we've got big names like hsbc, blackrock, vanguard, ubs, credit ag and many many more. Therefore, these entities on this list won't have their bonds saved or rescued or bailed out. It will be the chinese bondholders and also the investors and the general public that have been purchasing those unbuilt apartments from evergrande.

Therefore, the ccp will not be bailing out the us bonds, and these large institutions are going to suffer massive massive losses. Now. Somebody has also run the figures on what the damage might look like if the u.s debt ceiling is not increased, a u.s default. This full would cost 6 million jobs and wipe out 15 trillion dollars in household wealth.

The study says america could plunge into an immediate recession if congress fails to raise the debt ceiling and the us defaults on its payment obligations. This fall, according to one analysis, set to be released on tuesday mark zandi. Chief economist at moody's analytics found that a prolonged impasse over the debt ceiling would cost the u.s economy up to 6 million jobs, wipe out as much as 15 trillion dollars in household wealth and send the unemployment rate surging to roughly 9 from around 5. Now, obviously, lawmakers in both parties have agreed that the debt ceiling must be raised to avoid economic calamity, but the republicans have been adamant that they will refuse to help the democrats increase the debt ceiling in opposition to president joe biden's.

Spending plans therefore, obviously looks like the democrats are going to have to try and get this passed all by themselves. Can they do it? Maybe i guess we'll just have to see how it plays out over the next few weeks now the last bear standing has also done some additional due diligence on the evergrande crisis and has developed an argument for a banking crisis. If contagion in the property sector spreads and the sector continues its rapid contraction, a chinese banking crisis is, in his opinion, a significant risk, if not a probability. The belief that banks are not at high risk ignores both huge direct and indirect property exposure, as well as the direct warnings of chinese regulators, it's rooted in the belief of power and desires of central intervention, the same faith that incorrectly assumed an eg bailout.

Setting the backdrop on the 31st of december 2020 chinese regulators directed domestic banks to limit their property exposure to 40 of their total loan book in order to head off systematic risk and provide them four years to comply. Clearly, regulators are concerned about systemic risk of bank property exposure, not only that, but the 40 limit and four-year compliance timeline suggests that many banks have well in excess of 40 of their loan book concentrated in property while not specified it's likely. This percentage only considers direct property lending and excludes indirect, but correlated exposure like construction supply chains or state-owned enterprises that rely on land sales to repay debts and the impact to all loans due to an economic slowdown. Even the best capitalized, transparent and conservative banking system would be under stress if it had over 40 percent of its loan exposure in a sector core in a spiral like chinese property is in today.

Chinese banks, unfortunately, are none of those things. Non-Performing loans or npls are a recognized problem in china making matters worse. These npls are often hidden from regulators using various off-balance sheet arrangements. Estimated true npls are two to four times higher than reported.

As of 2019. below is the reported total equity of minshen bank and their equity over asset ratio in blue. Then it's adjusted base for the midpoint of estimated hidden npls in orange, as reported min shen can withstand an 8.3 decline in its asset value adjusted. It can only withstand a 2 percent drop.

This adjustment isn't scientific, but the market agrees below is the same chart, but with the market implied equity values in green, as well as min sheng's share price. Since 2010., i'm using min sheng as an example giving it stress, but the general story applies broadly the hidden npls begin to appear at the end of beijing's significant deleveraging campaign from 2013 to 2015., notably, the significant increase in hidden npl since 2015 corresponds with ballooning inventories Of property developers noted last week, which i discussed in one of my previous videos, while prior the leveraging cycles did not cause a banking crisis. The true loan losses associated with them were never digested, leaving true capital buffers incredibly thin as a starting point to the current downturn, even a minor impairment to their assets wipes out their equity. So what does evergrande suggest about recovery rates? Well, evergrande's only assets are unfinished and unsold apartments that can't be monetized and whose former price expectations hinged on banks writing mortgages to people to buy them.

It's not just loans. Tradable securities also make up a significant portion of banks assets in china. China's onshore bond market is 17.5 trillion dollars. The majority of these bonds are not central government securities or safe securities, but local government and corporate debt, which is reliant on property.

These tradable securities are subject to rapid market contagion that has already been seen not only in distressed property developers but systematically important state financial institutions. Even state-sponsored banks can see rapid devaluation of the price and collateral value of their bonds. The collateral value of harang bonds dropped from 91 percent to 40. From april to may, in june, bbg reported there was zero liquidity in harang bonds.

The idea that beijing can pick up the phone and force lenders to help a struggling bank is contradicted by the haran bailout, which took four months just to pull together only eight billion dollars, not even enough to bring its capital ratio up to regulated minimums. So, therefore, not only are these large property developers in a bit of a pickle, but so are their institutional banks as well, because other lenders don't want to help them out and bail each other out. Furthermore, the idea of interbank funding markets are state controlled and therefore not subject to disruption is contrary to history and market structure. Pboc liquidity injections only go to the large banks who must choose to lend on to smaller banks where bigger concerns lie.

The closest scare happened on june 20th, 2013 went into bank lending froze. There was adequate bank liquidity in aggregate, but it was hoarded by larger banks not provided to the banks who needed it and therefore self-preservation is motivating if your neck may literally be on the line. If that date sounds familiar june, 19 2013 is the date. Bernanke unexpectedly announced the qe taper leading to the taper tantrum.

Furthermore, beijing does not control the shadow banking system, which we know to be a key financial conduit, despite it sitting outside regulatory per view. Disruptions here could have significant impact and clearly are much harder for authorities to mitigate the timing of a potential banking crisis impossible to predict and may not happen immediately. However, in his opinion, unless there is a material turnaround in the property sector, it is not only a material risk, but a likely outcome. Recent liquidity injections may indicate stress today.

This does not mean that all banks will fail, but even the failure of one bank and the fear of contagion is enough to substantially disrupt markets globally. Basically, what this post is saying is that there's a lot of banks in china that have non-collectible loans or loans that aren't going to be paid back and therefore, even though many banks in china do have a positive asset over equity ratio and asset over liability ratio. Really, these ratios need to be adjusted to remove those potential non-recoverable loans and, when all of those loans are adjusted for it's clear that the banks in china are in just as much of a sketchy position as those property developers in china are in as well, and It shows that the banks are very heavily reliant on the chinese property industry. Therefore, this could very easily spread from the chinese property sector to the chinese financial sector and therefore over into the us financial sector and the uk and europe's financial sector as well guys be sure to.

Let me know down in the comments below what you think about the shorts, making their final ditch attempt at crushing the amc price and, while you're down there be sure to sign up to moomoo using this special thomas james, investing promotion and as always guys, if you Enjoyed this video be sure to check out some of my others. Alternatively, subscribe the channel and ding that notification bell, because that way, you'll be alerted. When i upload a new video cheers.