Welcome back to the channel everyone today, i want to talk about why the doj is going after the smaller funds. First, like melvin capital, before going for the big dogs like citadel and how? Actually? This is the exact same thing. The department of justice did before going after bernie madoff this guy on reddit said. I was wondering why they appear to be going for the smaller hedge funds.

First, we know they are in part, looking at collusion between funds during shore sales, and he said. Could it be because citadel and other large funds will be better at hiding the paper trail and committing the crime and being lawyered up to delay them even entering the building than other smaller funds? We know that citadel have been around for a long time. They know how the market works and they know how to commit a crime and keep it covered up. Citadel also have tons of money at their disposal and has a giant team of legal representatives.

But smaller funds like melvin capital and smaller research agents like muddy waters or hindenburg research, don't have that same kind of money or that same kind of experience or that same kind of legal team, and he says. Obviously every paper trail has two ends. Every transaction has two parties making the transaction. Are they expecting to find more at the smaller funds which have been colluding with the big boys? Obviously, if the department of justice can find evidence of a crime committed by melvin capital, all they have to do is then find the other end of the transaction and the other party helping them with the crime.

Instead of the department of justice having to perform a giant giant investigation into citadel, all they need to do is find one slip up from melvin capital and find out who helped them with the slip up or who helped them with the crime. And he said, maybe the department of justice is hoping to get some whistleblowers in the dog eat dog world of wall street hedge funds, and actually this is the exact same thing. The sec did with bernie madoff here's a headline saying chasing the small fry. The sec did let madoff get away for some of the smaller funds before then coming right back round for bernie madoff.

There's also a poster here said just to add my two cents. I've been in law enforcement since 2006.. Typically, when it comes to things like drugs oftentimes, you go after the small guys first to help build evidence against the bigger guys. He said people do tend to give up the goods and increment the criminals to incriminate the bigger guys.

So they can stay out of trouble. Thus, when we get confidential informants or in this case, whistleblowers, if i had to guess i'd say this is about the same situation and guys if you're getting a little bit worried, leaving your amc infidelity due to all the recent glitches and the fact that fidelity actually Supports short sellers mummy are currently buying you, a free share of amc on top of their usual five free shares when you sign up to moomoo, using the link in the description below and make your first deposit when you sell it to moomoo and make your first Deposit, you get two free shares, valued up to three thousand five hundred dollars each. If you can deposit a hundred dollars, we will go into the market and buy you a free share of amc and guys. If you can deposit the full two thousand dollars, then you also get an extra three free shares on top of that, all valued at three thousand five hundred dollars.

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I know this commission was looking into the possibility. There was some wrongdoing. Have you drawn a conclusion? The fact we haven't seen enforcement action? Does that can suggest that maybe there wasn't any wrongdoing well again for the public, i in the job, i'm in i'm. Also, a chair of a commission and sometimes uh, has to vote on these various enforcement actions, so i can't get into any one matter or prejudge anything, but there was four matters of policy, not enforcement.

The policy that we noted and the staff did a staff report and one of them we're going to take up next week. Actually, an open commission meeting is about the plumbing of the stock market, what's called clearing and settling and how we can take some risk out of the system and also last year, uh. The retail public found that they were foreclosed from trading that that a number of brokerage apps said nope. It was a fateful friday and they said you couldn't buy any more of this stock or that stock.

So we're trying to address the plumbing and put a proposal out next week, we'll also, i think, hopefully uh i'll, be taking up. What's called digital engagement practices, what some people call gamification and and what to do there and and as you've and i've, been talking about the actual market structure itself. So there's three or four projects that we have here and next week we're going to put our first proposal, hopefully in front of the public subject to my commission's approvals now i think this is to do with the sec's new proposal to reduce risks in clearance and Settlement here the sec voted today and passed a new ruling to shorten the standard settlement cycle for most broker-dealer transactions and securities from two business days after the trade date t plus two to one business day after the trade day, t plus one garrigan. As i said, these proposed amendments to the securities clearing and settling process, if adopted, could lower risk to the financial system and drive greater efficiencies in the markets, and he said second, these changes would require affirmations, confirmations and allocations to take place as soon as technologically practicable.

On trade date or t plus zero. Now, while i do think this is a massive step in the right direction as unusual wales has tweeted, there is a downside. This proposal is expected to take place and become enacted by march 31st 2024 and therefore we're likely gon na have to wait two years for this settlement cycle to fall from t plus two to t plus one. But obviously, as i spoke about in my video yesterday, there is so many triggers that could cause the gamestop on amc moas, but i think this is one for just general market plumbing and not the only moas trigger.

I also want to quickly touch on these new amc bonds and also the inflation figures that have been released today. Peter han said people keep sending me posts from shorts that are spreading fud about amc bonds. The misdirection is painful, so one is looking at one of amc, bonds and notes. The price is tanking, because apes don't play in the bond market.

All bond prices are falling, though, and he said it's the market pricing in the five or six fed interest rate hikes. This year and the fed winding up quantitative easing by march and potentially shrinking their balance sheets by summer. He said all of this may not happen, but right now, bond prices across the market are reflecting it, not just the new amc bonds and he says what you need to do is compare how amc bonds are doing relative to an index of junk rated bonds. That adam aaron is able to issue a seven year, non-convertible bond at seven and a half percent interest and almost double the original issue size, and that tells me that amc bonds are in demand now just to quickly touch on these.

So these amc bonds are non-convertible, meaning that buying the bonds can't be converted into shares and can't be used to create more shares. Buying these non-convertible bonds is just simply a way of holding amc, debt and generating interest on that. Dare and the fact that this amc bond issue was massively over subscribes, says that amc bonds are in demand and that the wider market doesn't see amc as a bankruptcy risk again. This just goes to further damage that short thesis and prove it entirely false.

This morning we also just got the latest cpi data for january at a whopping, seven and a half percent. Obviously, in december cpi, or inflation was only 7 percent november 6.8 october 6.2 and all of the months prior much much lower 7.5 inflation is the highest inflation. Reading we've seen in the last 40 years, this is a 40-year record since the early 1980s. Now, obviously the fed has suggested they will be increasing rates, potentially four five or even six times this year alone, but considering inflation right now is still rising.

We may see inflation rise to eight or nine percent before it then starts to slowly fall. Obviously, if each of these rate hikes is only a quarter percent increase, we may not see much of a dent in inflation for some time until the base rate of interest is significantly higher than it is at the moment. Considering these amc bonds have been issued at 7.5 percent interest, these bonds have basically been issued at the fed base rate, with no extra margin points again. This goes to show just how in demand these amc bonds really are, and just goes to show how much of a failure risk that amc isn't.

This 7.5 inflation reading is absolutely off the chart significantly higher than the inflation that we saw back in 2008. I do think the wider market is basically on a knife edge at the moment and any single catalyst could potentially push the market over the edge into full recession mode. But i think one of the most important triggers for the moment is melvin capital, officially being under federal investigation. Obviously this is something i've touched on quite a lot in many of my recent videos - and i guess is what we're talking about today, as well.

Considering the department of justice is investigating smaller firms like melvin capital, first before moving on to the bigger fries like citadel guys, be sure to. Let me know down in the comments below why you think the department of justice is focusing on smaller firms like melvin capital. Instead of going after the big guys like citadel and as always guys, if you enjoyed this video, be sure to check out some of my others, alternatively subscribe to the channel and in the notification bell, because that way, you'll be alerted. When i upload a new video cheers,.