Today I Want to talk about how the FED is currently in solvent and how physics is having a disastrous impact not just on these hedge funds, but on the entire Financial system as a result of just how heavily over leveraged everybody is. I Also want to talk about how margin calls are already happening and how this will cause the aimsy squeeze. So stay tuned and let's make some money. And I want to dive straight in with the information. so go. Telegraph Tweet saying the Federal Reserve Bank of New York says Bank liquidity may be titled and thought with the new policy implications. you can't make this stuff up. They've said the way the banking system manages its cache suggests the financial system may not be as flush as many. Now understand Basically saying the Federal Reserve is now uncovering just how heavily over leveraged everybody is and how many of these major institutions are swimming naked and they may not be as flush with cash and as well capitalized as first thought. and I Also want to talk about this screenshot from Randall corner on how Basics is specifically designed to remove those f TDS and make those uncleared OTC trades so expensive that firms ultimately move more of their trades into clearing straight away. It says the way the banking system manages its cash suggests the financial system may not be as flush as many Now understand and that could have implications on how the Federal Reserve manages the size of its balance sheet. That's because even though institutions like the FED have flooded the banking system with reserves, AK they've printed trillions of dollars. Many banks continue to manage fast moving inflows and outflows of cash much like they always have and that is tightly okay. That's basically saying a lot of these institutions don't actually hold a lot of spare cash. they have everything invested into heavily over leveraged Investments and they don't actually have a lot of liquidity AK spare cash it says Banks view their daily Reserve balance levels AKA their spare cash as scarce resource. Even in the era of large central bank balance sheets, rather than funding payments with abundant Reserve balance is, we show that outgoing payments remain highly sensitive to incoming payments as well. Now, these margin requirements are increasing. Many of these major institutions, including the Federal Reserve are realizing they don't actually meet these margin requirements and they likely won't meet them in the future. and the authors argue that this way of managing cash positions could become an issue for the FED as it seeks to draw down the size of its Holdings of bonds AKA That quantitative tightening and that reducing of the FED balance sheet and Randall Cornett tweeted this extract from the FED policy on Phase Six. That says, meaning the true operational impact of the new Phase Six rules is still very much to come. Even though Phase Six has been implemented and we are seeing these hedge funds and even the Federal Reserve being stressed, the overall impact of these margin calls and liquidations is yet to be seen so far, but obviously even the FED is being squeezed and therefore these margin calls and these liquidations are indeed coming. This is the rules which already affects some larger Bank space on the size of their portfolios will pull in a large number of other Pension funds and asset managers. and we know that Pension funds around the world, especially in the UK and in the US as well are already struggling to meet these new requirements. And it says the overriding purpose of Basics is to make uncleared, over-the-counter trades AKA those Ftds so expensive that firms ultimately move more of their trades into clearing. Okay, Phase Six is literally specifically designed to remove those Fdds and ensure that all trades actually clear straight away. It says the regulation does this by requiring companies to post upfront cash as security for trades tying up trillions of dollars of assets that could otherwise generate returns. Now again, this is also really important and really really good as it means these hedge funds are market makers actually have to stamp up the cash up front and they can't FTD or fail to deliver those shares or fail to locate those shares. And it's says that it means that hundreds of buy side firms AKA these hedge funds and private Equity companies that have previously never had to post margin or meet any kind of margin requirements will now be forced to do so. In the past, it was just major banks that had to meet those set one and set two Capital requirements, but now even these hedge funds are being required to stump up. Margin It says that while major investment banks that were pulled into the earlier phases ako's Top Global Banks May well be highly sophisticated and experienced at calculating initial and variation, margin and resolving margin disputes. The reality is they now face the daunting Prospect of dealing with numerous investment managers and smaller hedge funds who are not experienced or sophisticated in the same way. Okay, you've got all of these new short hedge funds that have never had to meet margin requirements and have never even had to meet regulations because they flow under the radar and don't report their actual true positions now having to meet margin requirements and ensure they don't fail on a single trade. And this is why phase six is so important. It makes these margin requirements so high and so difficult to meet, even for these new hedge funds that have never had to meet margin requirements before. And it basically makes it so. It's impossible for these hedge funds to actually fail to deliver trades because it's far too expensive for them. Also, if you haven't already, be sure to join the free. Discord Linked In The description below. We've got 1348 indicators and we talk about AMC and shared due diligence all day long. And if you haven't already, be sure to sign up to MooMoo to get 15 free stocks worth up to two thousand dollars each and a free ten dollars absolutely for free. On top of that, a total of up to thirty thousand dollars movies, berries to use. They've got tons of technical indicators and they're not affiliated with or owned by Citadel or any of these other hedge funds like BlackRock or by the mainstream media and something. I. Also found very, very interesting is that on January 1st 2023, there's new regulatory initial margin requirements that apply under the U.S Prudential regulations for covered swap entities with material swap exposure exceeding 8 billion dollars. Now back on the 1st of September 2022, any hedge fund that had normal long and short trades had to meet these new margin requirements for any positions over 8 billion dollars. But support Many of these hedge funds actually did is instead of meeting these margin requirements, they transitioned or transferred their normal long and short positions into swap positions or call and put options this way by hiding their true AMC short positions in swaps. They effectively didn't have to meet these new margin requirements. But from the 1st of January 2023, even if they have swap positions exceeding eight billion dollars, they now have to meet these new requirements and stamp up all of this additional collateral. And therefore, it may be that we start seeing a massive wave of hedge funds R for the 1st of January 2023 as they now all have to meet these new margin requirements, not just the Hedge funds holding regular long and short positions. Again, this is just another way these hedge funds can no longer Kick the Can or will no longer be able to keep the can come the first of January. And what is also very interesting is that Randall Cornet tweeted saying that actually margin calls are already happening. It says what's probably worrying the bank of England is the prospect of a fire sale of assets by UK Pension funds to meet margin calls as a result of these new margin requirements because the value of their guilt Investments has plummeted. Okay, because the value of these guilds held by UK Pension Funds has plummeted these Pension funds May struggle to meet these new margin requirements and will fail these margin calls and we'll have to have a fire sale of all of their assets. It says those funds loaded up on Long dated debt to match their liabilities to policyholders and may have attempted to juice their returns by dabbling in derivatives. These Pension funds have been dabbling in Risky derivatives and have been investing into these risky hedge funds and as a result, their value of their Investments has planned at it. And obviously that's bringing these UK Pension funds closer and closer to margin calls like we saw only a few months ago. And Mr Miller tweet is saying that when these margin calls happen, all things must settle. The books will need to be balanced in order for the market to resume function, but the stock market to recover out of this bear market and resume normal function. Again, all of these risky derivatives and the trillions of dollars of heavily over leveraged positions must be closed and the books balanced. with these heavily over leveraged short positions or these synthetic short positions still remaining, the market can never recover as they are still too heavily over leveraged and will still fail these margin calls. and therefore one day you will wake up to suddenly see billions of dollars in volume and AMC and GameStop as the stock prices. Skyrocket Hawks won't be able to help these rapidly increasing prices no matter how many times they try and stop it. Because as he said, the books will need to be balanced in order for the market to resume function. And something that could trigger this massive wave of margin calls is the coming Bitcoin and crypto collapse as a result of the grayscale Bitcoin trust and Genesis going down. We know that crypto and Bitcoin specifically is highly correlated to the stock market and therefore of the crypto Market plummets. The stock market will plan it as well Peter and tweeted saying that Zero Hedge claims the Ethereum drop this weekend was as a result of the FDX hacker dumping their gains and converting Ethereum to Bitcoin and he said it's still a big learning curve to me on how everything in the crypto world is interrelated. As I said, we know that crypto and Bitcoin specifically is very heavily interlinked with the overall stock market. They move and flow at the same rate, and therefore, if crypto collapses, the stock market will collapse as well. And as Satoshi Stacker tweeted, he said, just In Things seem to be worse than we thought with Dcg and with Genesis he said he's waiting for confirmation, but if it's true, they may need to start selling off significant chunks of crypto assets. We know that Genesis originated billions of dollars in crypto loans and the Grayscale Bitcoin trust holds billions and billions of dollars of Bitcoin and Ethereum and therefore, if these billions of dollars worth of crypto is dumped onto the open market, Bitcoin and the rest of Crypto will crash crash in the stock market alongside. so far in the pre-market this morning, we are already seeing the S P 500 down and those losses are likely to continue. We also know the next leg down for The Wider Market is expected over the next week or two, and therefore the stock market collapse is coming. and obviously as the value of stocks continue to fall, these hedge funds will struggle more and more to meet these new mods and requirements in phase six, and we'll end up being liquidated. But guys, be sure to let me know what you think down in the comments below. And as always, guys, be sure to ding that notification Bell because that way you'll be alerted when I've got a new video! Cheers.