Today I Want to talk about how the shorts have just been trapped in their toxic Total Return swap positions I Want to explain what these swaps actually are, how they will use the short AMC Creating billions of synthetics and how this new ruling closes the loophole and makes it impossible for new illegal swaps to be entered into. So stay tuned and let's make some money. And now I'll drive straight in with the cubation. So Scarlet tweeted saying today marked a massive regulatory victory for those following: AMC Total Return swaps are a Cancer on American markets.

So the SEC have said today, they adopted rules to prevent fraud, manipulation, and deception in connection with Security base swap transactions and also to prevent undue influence over the Chief Compliance Officer of Security Base Swap dealers and major Security Base swap participants. And that means that fraudulent or illegal swap positions that hide the true extent or true intention of a funds long or short position can no longer be entered into. Now, why are Total Return Swaps important? and how are they responsible for the creation of billions of synthetic shares you may remember? Back to Arcados: The Arcados used Security Base Swaps to gain exposure to the Securities while concealing the true size of the fund's positions from the market and our trading counterparties. These swaps have been used by various funds and various market makers to effectively short EMC float multiple times over shorting more shares than actually exist through these Total return swaps.

For example, a hedge fund could approach JP Morgan and say I want a short 200 million shares of AMC is a total return swap contract to agree the deal and then this same fund could also approach tons of other Banks like Bank of America Wells Fargo UBS Credit Suisse Barclays Lloyds and many others and enter into the exact same Total return swap contract for sure another 200 million shares of AMC By the time this hedge fund has hit the whole of Wall Street, they've hit 10 to 20 separate Banks and they've shorted 2 billion to 4 billion shares of AMC all at once. Now this used to be legal because the previous Total return swap contracts obviously hid the true extent and true intentions of their position from other Banks and other trading counterparties. In that way, without knowing it, a stock could be sold multiple times over the size of its float. even by One Singular Hedge Fund.

This extract says from March 2020 through March 2021 I was the head Trader at RK Goss Capital Management During this time, I and others executed trades that allowed the fund to a mass Market power on certain Securities traded on U.S exchanges. Our kagos used Security based swaps to gain exposure to these Securities while concealing the true size of the fund's positions from the market and our trading counterparties. acting at the discretion of the head of the fund I traded to reduce the prices of Securities in which the fund held short positions. But this new ruling now makes it impossible for hedge funds to hide the true extent of their total return swap position.

These hedge funds now cannot lie or influence other Banks to try and hide the total extent of their Total return swap position and this ruling will become effective 60 days after the date of publication of the adopting release in the Federal Register. Now this is obviously great because it means that hedge funds cannot increase the size of their Total return swap positions in AMC GameStop and other meme stocks. And that's now another loophole closed which will make these hedge funds struggle even more to try and maintain their illegal short position. Guys, if you didn't already know, you can currently get one guaranteed free share of Tesla and of Google and a 100 cash reward when you sign up to MooMoo using the link in the description below and make the required deposit.

If you deposit just 100, you get a 100 cash reward and five free stocks. If if you deposit a thousand dollars, you get 15 free stocks total and that one hundred dollar cash reward. If you deposit five thousand dollars, you get a guaranteed free share of Tesla or of Google as well as the 15 free stocks and 100 for free which you can always use to put towards more AMC or GameStop shares Now Travis actually also explained how they were using Total return swaps to try and hedge their short position, but just dug themselves into an even deeper collateral requirement territory. Travis Tweet is saying let's say you're a short hedge fund and you're short on AMC and GameStop your total hedge fund net worth is 150 billion dollars.

Let's say for easy sake that it's slightly smaller, say 15 billion dollars. Let's say you shorted a hundred thousand shares of AMC pre-run up back in 2021 and the meme stocks wrecked havoc on smaller hedge funds, leaving you with a 10 billion dollar loss. Your net worth is now say just five billion dollars, 15 in billion less that paper loss of 10 billion. The meme stocks were rising in price and those hedge funds were running out of time.

They obviously weren't going to try and buy call options to hedge their short positions because call options have an expiry date and therefore these short hedge funds to try and protect themselves from their spiraling short positions took out some Total return swaps to try and hedge that position with this. Total Return Swap: A bank like Goldman Sachs sees your maximum profit from shorting the stock from thirty dollars to zero dollars is let's say two billion dollars of profit. So Goldman Sachs Forks up that two billion dollars but also takes on the risk of a mother of all short squeeze and all Goldman Sachs once is fixed and floating payments on those Total return swaps every single month to keep the swaps open. but these hedge funds had to provide Banks like Goldman Sachs not only with collateral for those Total return swaps, but also monthly payments for those Total return swaps as well.

and therefore it's government incentive to receive monthly payments from these hedge funds every single month and it won't be long until these fixed monthly payments to Banks like Goldman Sachs end up being larger than the total return swap gains or the maximum profit from the meme stocks going to zero. At that point, these hedge funds will get margin called and they will be forced to try and come up with the money in four days or have their entire portfolio liquidated. And when this happens, it wouldn't surprise me if Congress starts blaming the SEC for not seeing these massive foreseen losses that read it for saw long ago. You may remember this video of Congress accusing the SEC of not foreseeing the losses and the collapse of Silicon Valley Bank when YouTube Twitter and Reddit saw it long ago and it won't belong until we have a very similar video to this of Congress accusing the SEC of not seeing these losses from these Total return swaps.

The failure of Silicon Valley Bank on the Federal Reserve's watch very clearly calls into question whether or not some of that trust was misplaced. Make no mistake, The Lion's Share of the blame is on incompetent Bank Executives and it's outrageous that these people took bonuses and sold stock in the days leading up to the bank's failure. We should hold these Executives accountable for the fullest extent of the law and Claw back those bonuses and stock sales. I'm co-sponsoring a bill to do just that.

But as I laid out in a letter to you Vice chair bar that, by the way was signed by 11 other Senators spanning the ideological Spectrum It's Gravely Concerning that retail participants literally just regular everyday people were able to figure out that something was wrong with Silicon Valley Bank before your Regulators took appropriate action. Now, these folks don't have access to non-public information like the bank examiners do, but when people on Reddit and Twitter can spot bank mismanagement before The Regulators something is terribly wrong. And something is also very interesting is that the Eurozone has officially just entered a recession. This obviously ties in incredibly well to the UBS CEO warning of a new wave of banking layoffs, which are expected to take place early this month.

We already know that JP Morgan has actually fired now a thousand five hundred First Republic banking members and it seems UBS is about to do the exact same. The CEO of UBS last week warned of painful decisions about Job Cuts Following the Takeover of Credit Suisse which he said he hoped would be formalized in the coming days, it seems the EU has just gone into a recession. The UK is following as well, and the US won't be far behind at that point. I Imagine the collateral these hedge funds are still holding will run out as the stock market.

Falls Further, and at that point, those Total return swaps will end up being called by these Banks as these hedge funds collapse. And as I said, it won't be long after that until Congress starts grilling the SEC as to how they didn't foresee 10 of these hedge funds collapsing due to these Total return swaps. 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 put a new video.

Cheers!.