What's up you beautiful people welcome back to trey's trades. How are we doing today? It's your boy, trey! Obviously, i think that's my name coming back here again to give you guys a little bit of an update on some really freaking cool dd that has come out here and i'm just gon na walk you through as quickly as we can some really awesome crazy, uh Policies that could you know i shouldn't even say policies, but i should say: rulings that could potentially move amc stock in a good direction. So we're gon na dig you through this. It's i do to practice by saying that i'm not a financial advisor, it's not financial advice, obviously take what i say: the great assault uh.

So let's just dig into the video save you guys some time this is majin vegeta. As always, every freaking video we got ta drop, a freaking ape a monkey baby, and this is vegeta. The prince of all saiyans in his majin form uh. I was too lazy to draw the legs uh, but i just figured i'd drop, something as always to you know, represent the freaking gorilla gang.

All the apes silver backs, orangutans and gorillas out there baby. So, let's just dig into this video, it's gon na be about amc liquidity, so let's just dig straight into this, so the specific piece that we're working with right here i've got two different sources that i'm using. This is coming straight from the sec website. This is a staff statement on fully paid lending and then i've got a finra report as well, so this is coming straight from the sec, the securities and exchange commission.

This was dated on october 22nd, 2020, and we've got some really crazy stuff to dig through here here so dig through here here, but anyways. The thing that i think is probably most important to to point out here is that this is not rule and regulation. Right now, which means that this is not going to be strictly strictly enforced in a sense that this is locked right and i'm going to point out the exact sourcing that i have for that. This staff statement represents the views of the staff.

It is not a rule, regulation or statement of the commission. The commission has neither approved nor disapproved the content of this statement. The statement, like all staff statements, has no legal force or effect. It is not all to amend, applicable law and creates no newer additional obligations for any person, meaning that these guys will not be held legally responsible right for their actions.

If this does not get met now, it doesn't mean that there's not going to be people breathing down their necks to try and make this happen, especially because this is coming from an sec website right. This is coming from scc.gov, and the finra report came straight from the securities and exchange commission as well. So i kind of want to dig you through exactly what this whole buzz is right, we're talking about this. This enforcement is coming through on april 22nd, which is essentially a liquidity enforcement right.

They have to have collateral on hand to match different leveraged positions. Now. What do i mean by this right? Well, we're gon na start off here with this scc.gov uh this this this source right, so we're gon na be talking about the staff statement on fully paid lending now on october 22nd. This is when the letter came out.

The commission staff issued a no action letter regarding the broker dealer customer protection rule in relation to certain fully paid lending programs operated by some broker dealers. This rule requires broker dealers entering in agreements with their customers, who lend the broker dealers fully paid or excess margin. Securities to provide the securities lenders with collateral that fully secures the loans. Now, what do i mean by this right? What does this mean now if we were coming here to ortex? I can show you exactly what i'm talking about.

You see these shares on loan. 146 million total shares on loan. Now, what happens if these shares on loan are being leveraged right now? I've got this kind of highlighted right here, underneath the the piece and leveraging is very important. This essentially means that they don't actually presently have the positions they're borrowing right so let's say they they borrow.

I know hypothetically 30 million total shares, but they only have liquidity or collateral to pay for maybe 20 million or 15 million whatever it is. I don't know how much they're actually leveraging - maybe 5 million, who knows essentially what this does is. It puts them at risk, risk of being margin called risk of going really really deep negative, and essentially, what you have happening here is. This report is basically calling they're like i can tell it's you guys, and this is coming straight from here - actually that there's probably a little bit of malpractice happening right.

So your staff was brought to our attention that number of broker dealers are operating programs in which they borrow fully paid and excess margin securities from their customers, the fpl programs. Some of these programs do not comply with the requirements of the broker dealer customer protection rule. This is essentially protecting other customers, because you have to remember you know these. These hedge funds, like citadel and melvin capital they play with other people's freaking money, it's nuts, so essentially, what this is supposed to do is protect these customers with this ruling, which is you know, kind of outlined here in this staff statement on fully paid lending so Rule 15c 3-3-b 3, essentially, is saying guys.

You need to make sure that you've got the collateral to match whatever it is that you are lending and loaning from these these uh these lenders right. So let's say that hypothetically speaking, blackrock lends 30 million shares over to citadel city, doesn't have liquidity or collateral to match that loan. They borrow anyways they're, leveraging heavy leveraging, and this kind of ties very very heavily into something that we've talked about previously on the channel, which is this idea of the supplemental leveraging ratio. The slr right.

This was passed so that big banks and and lenders could make liquidity could make some cash in the meantime, while you know coronavirus and quarantine kind of stole the ability from them to produce revenue right. Essentially, what this did is hey. Let's say that we can lend out, you know, instead of a three to one leveraging ratio, we can lend out a six to one. We can lend out a lot more cash, a lot more liquidity and a lot more securities.

So essentially, what you have here is this statement right here. This could all tie together, uh very, very well to say: hey, based on the fact that we can see. Some of these programs are not comply. The requirements of the broker dealer customer protection rule as of april 22nd, which i have uh highlighted down here we are going to require you guys i shouldn't even say required, but highly highly recommend that you have collateral to match, whatever you are being lent.

So here i have, it highlighted, provide the lender collateral that fully secures the loan consisting of cash, u.s treasury bills or notes an irrevocable letter of credit issued by bank or such other collateral, as the commission designates as permissible right, and this essentially means that hey, you Need to have enough equity or or something you know - equity driven cash, driven security, driven that is going to cover your initial investment on whatever you're in, and that would include unrealized losses right. So, let's just hypothetically say that they borrowed out 15 million shares the the cost. You know the short bar, if you rate on that or the cost of to borrow - is sitting at 20 annually right. That's about what it would be right now for amc.

It's like 20.8 percent according to finto, so if that costs to borrow 20, if they just stayed completely stagnant on whatever security they were being lent. What would that mean? It would mean that annually if they had to borrow 20 million dollars worth of security, that they would, they could charge 20 on that which comes out to 4 million extra. So if it just stayed absolutely still, amc stayed at nine dollars a share for an entire year. They would still be out net negative four million dollars on on a 20 million dollar essential, essentially uh loan lending out right.

So they need to have the collateral for 24 million dollars worth of security, and that is only if it stays completely stagnant and the cost of the borrower will stay the exact same the entire freaking year. So essentially, what this is saying is hey, whether it's cash, whether it's equity, whether it's securities, whether it's bonds, whether it's notes, right whatever it has to be. It is very, very highly recommended that you maintain the proper collateral to maintain these loans, and essentially that is that is what this fender report is pounding through right, so mark the loan on market not less than daily and provide additional collateral as necessary to fully collateralize The loan mark the loan to market not less than daily, meaning that they have to mark this loan daily. They need to stay up on this stuff they're going to make sure - and this is key wording right here - provide additional collateral is necessary as necessary to provide additional collateral right.

So, let's just type a thought. You know hypothetically talk about citadel who was down. I think of citadel. He was either there melvin capital down 49 q1 right.

They just lost a crap ton of money and that's not even considering their unrealized losses, the positions that they haven't closed in amc or gamestop right. Essentially, what this is saying is hey every single day that you need to pop up more collateral to maintain your position in a stock. You need to make that happen right pop up that collateral, make sure that you are staying up to date, that you are not sitting in a position where you're negative and can't pay on your loan right to fully collaterize the loan. That is huge and then, thirdly, notify the lender.

The provisions for s-i-p-a may not protect the lender and that, therefore, the collateral deliverance of that lender may constitute the only source of satisfaction of the broker dealer's obligation to return the securities your staff is informed. This is really big. Your staff has informed division staff that some broker dealers operating fpl programs have not turned over the collateral physically to the lender and therefore retain control over the collateral that is used to secure the borrowings of fully paid in excess margin. Securities.

You know what that's saying: we see you guys, we see you guys not doing what you're supposed to do, which is why we are creating this specific sec, fully paid lending staff statement. This is massive right. The only thing that i don't necessarily like about this is that it's not a rule or regulation, meaning that they're not going to be held by law. It's not going to be a law, binding statement, saying hey! If you don't do this, you can be held legally responsible, but it is going to be enforced on april 22nd.

They made that clear as day saying hey. It is very, very highly recommended, essentially like uh - hey, if you don't, if you don't, you know, hold true to this. We're gon na find some way to probably ding you for it right now. Where does this all go? Where does this all kind of tie together? So, coming back to this slr this over leveraging the idea that the stock market is being probably pretty heavily shorted based on bond repos, based on the fact that you've got heavy heavy shorting and amc gamestop a whole bunch of different securities across the stock market.

Right. There's a good chance that this is tied together and that this staff statement on fully paid lending is saying: look. We know that you're you're freaking gambling you're gambling, so what we're going to make you do is make sure you are matching that collateral. You need to make sure that you are not putting yourself in a situation where you are putting yourself at risk and your customers at risk.

So, what's the tldr here right over leveraging right, they need to make sure, if they're going to over leverage that they have the collateral to make that match right. They need the collateral on these risky loans and these risky securities, and if they don't, you know, what's probably gon na happen, margin calls because guess what the people that are getting lent these loans, these shares, whatever it might be, if it's just liquidity, if it's shares, If it's xyz, they're, probably gon na get margin, calls from whoever the lender is, usually banks or brokers right? What happens with margin calls margin, calls lead to liquidation or covering. So if you have a short position, what does that mean? It means that you have to buy back your shares if you sold into the market right they're gon na make you buy back whether it's higher or whether it's lower. You know what that causes.

Don't you, you know what that causes? Don't you that's a short squeeze baby? Now, i'm not saying that april 22 is gon na be the day this all goes down, but nonetheless you can see all these pieces falling into place right. We talked about the slr way back in the day. We said. Look, this is a big deal and when this gets cracked down on once this expires once they start really cracking on this leveraging, they make you put up the collateral you're, going to see banks that banks and hedge funds get liquidated and it's been happening.

It's been happening, there's so many pieces falling into place right now that are all connecting this freaking interweb of crazy rulings filings short data xyz. All these things that tie together and it's making moves right so they're gon na make people cover, is going to move the stock. You've got a bunch of different confirmations across the market. Right.

You've got bonds that are selling an extreme high amount of bonds. You've got crypto that took a huge huge hit here recently it's. This is obviously speculation, there's no way to know for sure, but there's speculation that cryptocurrency took a big hit, especially bitcoin dropped like 10 000 in a single day, because of the fact that there are some margin calls happening. There are huge huge institutions and hedge funds that are pulling out of major stocks in order to put up collateral for their major stocks.

I've seen this freaking picture circulating around today of like every major large cap stock in the market, a little bit red today and then you've got amc and gamestop that are green. Do you think that's by accident? Do you think that's by accident baby? I don't think so and then you've got all working late hours this last weekend now. Why is this important? What is what is citadel work over the weekend? The market's closed the market's closed, but guess what's not cryptocurrency cryptocurrency is not closed. Cryptocurrency trades every single day.

Every single minute, every single year right, cryptocurrency, trades year-round and, lastly, i think the most huge, huge crazy piece - and this is where the enforcement i think, is gon na come into play. This is obviously speculation. I do not know, but this is gary gensler now. Why do i think this is important? Well, i'm going to show you something right, so i'm going to pull up a little piece that i showed on my live stream here earlier today, but in case you're not able to tune in this is going to be referenceable for you, and i want to show You this right check this out.

It's this piece right here. Gary gensler was sorted in saturday to be chairman of the securities and exchange commission. The sec really be president joe biden's top cop on wall street. Why do i think this is important? This guy is the enforcer this guy is going to come into this whole equation and say: look based on all this information that we have, even though it's not rule, it's not regulation.

We're gon na step in here and basically be your big dad. We're gon na, be your big brother, make sure that you are not screwing yourself, screwing banks and screwing your customers, because this is getting dangerous. They said it in plain: freaking, writing guys. This is it this is it.

Your staff has informed division staff that some broker dealers operating fpl programs have not turned over the collateral physically to the lender and therefore retain control over the collateral that is used to secure their borrowings of fully paid in excess margin securities. You know this is saying this is essentially saying you guys are not holding up. You guys are not putting up collateral, you guys are putting yourself at risk. This is the rules and regulations that we're gon na put in place, since you guys are playing stupid games.

You win, you play stupid games, you win stupid prizes and guess what this goes into place on april. 22Nd. 2021.. Now i really really want to double down on this.

This is not something that is going to be held up by rule regulation or statement of the commission right. So there is this off chance that they decide to say you know what screw this, since i'm not gon na be how legally responsible has no legal force or effect. It does not alter or amend applicable law, and it creates no new or additional obligations for any person. They may just let it slide, which is why i'm gon na say hey based on everything that we know.

I'm not saying that it's gon na go freaking to pluto this week. I'm not saying nc is going to go to pluto, but what i am saying is that this is going to play a piece in the puzzle. There are so many things tying together with all the dd that all the freaking apes out there have done all every all. The intelligent people on reddit discord, youtube, yada, yada, yada, it's all tied together.

This is huge. This is massive right. I do not want to understate the importance of the staff statement on fully paid lending and, if i had to sum this up in just a couple of senses, it would be over leveraging right. They don't have the collateral for this, which essentially leads to hey we're going to crack down on this.

You got to have the collateral if you don't likely going to get margin called likely going to lead to short positions, getting covered likely going to lead to squeezes and guess what. If this doesn't happen, you got gary freaking gensler baby that got swore in on a saturday which, by the way, hasn't happened since 1973 or 2008.. Now you guys can do the math there. You know why those days are important.

That means something to me. That should mean something to you: that's what i've got for this freaking absurd outrageous short dd video on the day, man. This is gon na, be a new record. I'd never make videos this short, but i wanted to plow through this thing just so i could get it out there.

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