Today I Want to talk about whether shorts can't cover even if they wanted to, and why they're stuck waiting for the inevitable squeeze. So stay tuned. Then let's make some money. and now I'm going to dive straight in with the key information.

So I Want to start by talking about the financials, the maths, and the numbers about why these shorts are currently stuck and not allowed to close out of their short positions. Right now, these shorts are currently waiting for a judgment Day to decide whether they're going to be liquidated or whether they get off Scot-free They're waiting and hoping that retail investors send off all of their AMC shares and they can close out of their shorts at this low, low price. But obviously if that doesn't happen, they will end up being liquidated. So let's assume these hedge funds start their portfolio with a 2X leverage ratio.

They go out and they borrow five trillion dollars from these major Banks and they have a total portfolio value of 10 trillion dollars. Now as I've said before, we know the majority of this portfolio or the majority of these portfolios are built on Long positions. Yes, they do have some short positions and even some illegal short positions, but the the majority of their fund is long on the overall Market. We know that AMC currently has a market cap of 5 billion dollars.

Even if there's five billion shares and the float is sold 10 times over, that's only 50 billion dollars of their overall 10 trillion dollar portfolio. Even if you assume all of these shorts have been shorting from 70, that's only a total position of 350 billion. Even if you factor in GameStop and all of the other meme stocks on top of that, maybe it's only one trillion out of this total 10 trillion dollar position. And as I said, those shorts and those are legal shorts are going to be shared between a number of different funds.

Just like this, 10 trillion dollar value is the accumulation or the cumulative value of a number of different hedge funds. We know that realistically, these are legal short positions are say, at maximum, only 10 of their overall fund values. The remaining 90 is long on the overall Market Obviously, if a hedge fund loses 50 of this 10 trillion dollars, they've lost all five trillion dollars of their own personal cash. But they haven't yet lost a single Cent or a single penny of the bank's money.

This is actually a point in which these hedge funds would be liquidated because these Banks don't take on losses. Therefore, as soon as they lose 50 or 51 of their overall fund, let's hedge fund all these hedge funds, sir, would be liquidated And that works the same for you and I as well. If you're trading on margin and you're using a 2X margin or leverage ratio and your position declines by 50 or even 49 or 51, Your Position will be liquidated. And that works the exact same way for these hedge funds as well.

Because obviously the major Banks don't lose money. They will forcibly liquidate hedge fund positions before they lose a single Cent. But also, remember, these figures are only an example because many of these hedge funds use a leverage ratio much larger than two to one or two x leverage ratio. For example, we know that Citadel uses a 7x leverage ratio.

If Citadel had a total fund size of 10 trillion dollars, only around one half trillion would actually be their own money. The rest of that money would be borrowed from these major investment backs. Now, let's assume that right now, all of these hedge funds are currently down 49 on the year. So far, that's not actually unreasonable to assume, as many other hedge funds like Tire Global are down 60 or 65.

Obviously, if we assume they're only down 49, that means they've still got 5.1 trillion dollars left, and they haven't yet breached that liquidation point. They're hanging on by the Skin of Their Teeth. But they haven't yet failed those margin requirements. Therefore, because this hedge fund or these hedge funds still have a hundred billion dollars in remaining margin, they haven't yet failed that.

Margin Call And they haven't yet been liquidated by these major Banks. But what would happen if they haven't actually valued this position? Actually? What if they're not down 49 on the year and they don't have 5.1 trillion dollars in cash remaining? What if they've actually lost another trillion dollars? they've only got 4.1 trillion dollars remaining And they're down. What's that? 60? 59 on the year? Well, obviously, they would have blown past these margin requirements. They're significantly below that five trillion dollars worth of cash.

And that means that so far, these Banks they've borrowed money from have currently lost 900 billion dollars. Now, obviously, a 900 billion dollar loss is not acceptable for these major banks. For example, Credit Suisse barely has two nickels to rub together, let alone a spare 900 billion dollars. They'd be happy to lose many of these major Banks and also, central banks have posted record losses.

So far This year, they've taken on very heavy losses in the hundreds of billions of dollars. and they're not about to recognize an additional 900 billion dollar loss. And that means that right now, these major Banks physically aren't allowing these hedge funds to close out of their short positions. They're refusing to liquidate them because they don't want to recognize a 900 billion dollar loss.

Therefore, they've basically told these hedge funds guys you can't liquidate because we can't recognize a loss this big. You just have to sit and hope that retail investors sell their shares and you can regain some of those profits and close out your shorts with minimal losses. They're basically waiting for the market to go back up if the S P 500 increases by an extra 20 or 30 percent. All of these losses, all of a sudden get raised.

But obviously right now, the S P 500 is not going back upwards. We're still in that market crash territory. We're still in that recession territory, and the S P 500 is expected to fall further for these major Banks and hedge funds are going to continue taking on heavy, heavy losses. They're not just going to be down 59, they're going to be down 79, 89, 99, or even 100 and end up being completely all out.

liquidate it. But you might say Tom Surely, these hedge funds couldn't mismark their positions by a trillion dollars. You can't just misplace a trillion dollars. That's a hell of a lot of money.

Well, it turns out, actually they have. and when we was currently holding their biggest ever giveaway for the Christmas period, they currently have a 60 000 giveaway Sweepstake and you also received 20 free shares worth up to two thousand dollars each when you sign up for Mumu Right now using the link in the description below. So this article says that banks have a shortfall of more than a trillion dollars in capital, and this analyst fears the shortfall only get worse now. This basically means that many of these hedge funds, many of these financial institutions and private Equity houses have been misvaluing their private Investments and marking them up above what they're actually Worth to meet their margin requirements.

This has obviously been going on for some time now, and they've basically faked a value of more than a trillion dollars, which analysts feel will continue to get worse. And it says that claim may surprise those who think the U.S banking industry has some 2.2 trillion dollars in capital or actual asset value, but he whistles that figure in separate ways. First, you notice there's a difference between book Equity value aka the investment value and tangible Equity or real cash value, the latter of which is used by these banking Regulators to evaluate solvency and determine if they meet those margin requirements. but it's a narrower definition excluding items like Goodwill and deferred tax assets.

And then he also subtracts what's called accumulated other comprehensive income. Thanks to quantitative Easing and now quantitative tightening, all sorts of assets have become negative return proper positions for banks and non-banks alike. If the coupon pays less than the funding costs, you're losing money. and then you also marks to market the losses on loans and securities created during 2020 and 2021 for the impact of this year's Fed rate hikes.

That right, there is enough to push Banks into insolvency. So that basically means these hedge funds have already lost this one trillion dollars plus and their Investments aren't worth what they're stated to be worth. And therefore, if they sold off their positions or closed out of their shorts, they would not have enough money and the banks would take on heavy losses which they're not prepared to do and it's likely this figure is actually much larger than a trillion dollars. This trillion dollars has been calculated based on what hedge funds and Banks actually have on their balance sheets.

But remember from the other day, many of these hedge funds and these non-bank institutions have 80 trillion dollars of hidden off-balance sheet dollar debt in the form of swaps. Therefore, if on their recognized Investments, they're on balance sheet. Investments There's already a trillion shortfall when you factor in the 80 trillion dollars of off-balance sheet liabilities they also hold. It's likely this one trillion dollar shortfall is actually much larger, and especially if you factor in this new tweet from unusual: Wells That says, institutions outside of the US are also holding an estimated 65 trillion dollars in missing dollar debt off of their balance sheets as well.

So you've got 80 trillion dollars in off balance sheet debt from these U.S institutions and an additional 65 trillion dollars in off-balance sheet debt from these institutions outside of the Us as well. Therefore, if there's already a trillion dollar shortfall on their on balance sheet assets and debt when you factor in this 80 trillion and this 65 trillion in off balance sheet there, it's likely this number of one trillion dollars is more likely two, or three, or even four trillion. And therefore, if you subtract, say, three trillion dollars from there, say 5.1 trillion dollars in assets left. That means these hedge funds only have 2.1 trillion dollars left in their portfolios.

And therefore that I mean these banks have to suffer a gigantic loss of 2.9 trillion dollars just for these shorts to close out of their short positions. And this is why those hedge funds can't close out of their short positions, and why the Bank of International Settlements is now saying the world faced a staggering Financial meltdown with potential losses exceeding the total number of US dollars in circulation. Basically saying that because of this giant shortfall on balance sheet and off balance sheet and the fact these hedge funds can't pose out of their short positions or even sell off their long stocks because Banks would face such ginormous losses that actually would exceed the value of US dollars in circulation. And this is why as Hang Lou says, short simply can't close out of their positions at prices that retail is willing to sell at.

So they're stuck because they need shares to close, but they can't close at high prices. And that is why the Wall Street journalists saying a new Bull market can't start until retail investors give up and sell their shares on the cheap. But which allows The Wider Market continues falling. Even the banks themselves will get closer and closer to liquidation.

These hedge funds won't just have lost 49 of their portfolio or 50 or maybe 60 or 70 percent, but they'll have lost 100 of their portfolio and the money they borrowed from these Banks And therefore, it potentially won't just be the hedge funds being liquidated, it will be these major Banks and major institutions being liquidated as well. And that is then. Obviously when the Dtcc will need to step in with their recovery bailout fund and it's likely the U.S taxpayer would also have to step in and prop up these major Banks And that is why is Bruce Wayne Tweeted he said 300 is not a squeeze. Don't be fooled.

Now this is where I actually have a very interesting question. I Know a lot of us are frustrated that AMC hasn't yet scores and I wonder if people are starting to stop believing the squeeze. My personal question to you is, where do you want to sell your agency shares? Do you personally believe this squeeze isn't really going to happen and you're happy to sell your AMC shares at 30 or 50 dollars a share? Do you want to try and wait to those all-time highs and sell at 72 dollars per share? Do you want to sell potentially early at 300 or 200 or 100 per share? Or are you happy to hold the squeeze because you know that it's coming just like I Do a thousand, five thousand or ten thousand dollars per share. or maybe even above.

It'd be really interesting to see some of your comments. Down Below on exactly when you want to sell your aimsy shares. Do you want to sell early at 50 or 60 or 30 dollars and escape with some money back? Or do you know the squeeze is going to happen on top of that gold Telegraph is also tweeted saying we're starting to see central banks limit cash withdrawals as they work on their own digital currencies while taking on huge losses as they rapidly accumulate gold. Many many central banks around the world, including the Japanese Central Bank the Fed, the Swiss National Bank the Portuguese National Bank, and a number of others have already announced that they've taken on heavy, heavy losses this year.

Oh, over a hundred billion dollars each. It seems so far this year, the stock market is failing because these hedge funds have held on to these toxic short positions and their toxic long positions, and they've been misreporting and mismarking their position values. Now it's got to the point where they can't even close out of their positions and the market is still falling. And finally, I Also wanted to update something from my video yesterday because it turns out as Tony Dinaro tweeted The preferred chairs actually don't get delisted in the same way that common stock does.

They actually have a completely separate set of rules as Dominic tweeted preferred shares can still be delisted if the aggregate market value of publicly held shares is less than two million dollars, or the number of publicly held shares is less than a hundred thousand preferred shares or Preferred stock doesn't actually get delisted if the stock Falls below one dollar per share because they don't follow procedures outlined in sections 802.02 and 0.03 Therefore, because Preferred shares and Preferred stock flows separate de-listing requirements, the common stock, they don't get delisted. even if they do fall below a dollar. Preferred Stock and Preferred shares can actually still be delisted, but under a completely separate set of rules. And we're not at risk of breaching either of those rules.

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 upload a new video. Cheers!.