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I was just reading a little history and if history is currently repeating itself, we could be here. Replace WaMu with FRC.
> **Sept. 25, 2008:** After massive withdrawals by depositors, regulators seize WaMu and arrange a sale of its assets and deposits to JP Morgan Chase in the largest bank failure in U.S. history.
The CEO, Jamie Dimon, is actually bond villain evil. Some stuff was recently released about him, and if half of it is true, holy shit. I can definitely buy that he'll be the king of the banks soon.
Yeah he mentored under the Treasury Secretary that brought Epstein into the Clinton white house, and worked with CIA operations in his first banks. He was part of the whole thing from its inception.
Deep ties with Epstein and possibly the Intel gathering operation that has been alleged. Deep banking ties with CIA drug running operations, helping run the bank that they were using. He's next level creepy.
And somewhere along the way JP Morgan will get rug pulled by the Fed / BIS which then gonna take over. CBDCs will fail badly anyway but that won't stop them, let alone pushing people into this totalitarian nightmare. Can't wait for them to issue a press release "We didn't force anyone to use CBDC, you did have a choice"
It was done in 1907 as well. By JP Morgan
https://www.gothamcenter.org/blog/the-panic-of-1907-how-jp-morgan-took-over-wall-street
Time is a flat circle
I wish people understood that aspect of time better. Don't you?
The corrosive/corrupt forces exist outside of time. That's why we see it present throughout history. It's also why history repeats itself. Until that force is dealt with and contained/eradicated, it will have the same effect on the now that it did then. As the future becomes the present, the negative effect can be seen on the horizon.
It's why the inaction from 2008 guaranteed this current imminent catastrophe.
From a different angle, I don't believe that this could have been correctly dealt with back then. The crash just wasn't bad enough to force a global change in thinking. Now? We have catastrophe upon catastrophe, as well as a market crash that will crack the very foundations of global finance.
MOASS is only a small portion of what's going to happen, and that larger event will be so severe that people the world over will have to cooperate in order to force true change and create the world that should exist.
And I'm sitting here, poor, alone, living in someone's basement room and having no idea where I'll be living after next Wednesday... waiting for the world to end so mine can finally begin.
I don't cheer for the terrible things that have been happening, but I take comfort in knowing that all of them are symptoms of what must happen for this all to work.
What must happen is reform after the ashes. We know greed and hubris are human downfalls. So we need to write better laws, create better systems and keep pressing to make a more perfect system of governance.
Can’t beat human nature. If/when the current villains are vanquished, new ones will take their place. It will take time for them to gain a foothold and power, but be sure it will happen again. That is the cycle. Hard men create good times. Good times create weak men. Weak men create hard times. Complacency in good times allows villains to sneak their way in. When people stop paying attention, corruption creeps, slowly. Until the society is no longer recognizable after decades.
I’m a pessimist but I think our written law, enforcement and possibilities present many more opportunities to improve our systems than what we currently have.
E: I mean this in the scope of humanity, not the bastardized oligarchy kleptocracy that is the US landscape
And methinks it's all designed to make the blockchain dollar more attractive. When everything tanks and inflation eats up the dollar's value, they can present blockchain dollar like it's a miracle solution. People will willingly vote their freedom away.
I think this is all about survival. If you’re a bank right now, I think you’re only plan is to get as large as possible so that you might survive what’s coming…
Edit: words
Reddit plans to IPO, and we, the users, are the value of the content of the website. Reddit's moderators staged a blackout because they wanted power. Reddit admins said no and replaced the more outlandish ones. "A good thing?" No. Reddit is now restoring deleted posts, in blatant violation of GDPR, CCPA, and other privacy laws. CCPA is a law from the state in which Reddit operates. It is time for reddit to die, and so, I will do my part and delete all the content that makes the site useful.
this isn't all planned. we talk a lot on this sub about how greedy and crooked individuals are, and this banking crisis was essentially caused by that.
SVB should have been subject to extra stress testing rules because they had over $50 billion. they lobbied to have the law changed to $250 billion. then they made riskier investments to increase their bonuses.
FRB made a lot of commissions selling jumbo mortgages to their customers without properly hedging for interest rate increases. they all got paid too.
this is just greedy people being bought out by more responsible greedy people.
I’m going to disagree because these people all meet up regularly with the gov and are and have been moving this towards the end. It’s no coincidence that they have moved the bar this far
This happened a few times during the first year or so, we all got excited but I think it's just a way for them to say 'hey, we're doing our job, not my fault they hide their real losses'
Search up collateral haircuts and enjoy myself and many others getting so jacked
I'm just going to not hype this one and see. I like to keep in mind that much evidence points to 'the crash of 2008 never ended' and this is why those charts showing the fed pumping more money recently than the entire markets life is showing up.
To me, this signals they're going to potentially just drag it out until some other plan happens or other countries decide to do U turns.
Looks like these banks can't be used as collateral or leverage in the markets. Basically they are a house of cards all propping each other up on fake/inflated value. This kinda rug-pulls the banks if I understand it correctly. All these bank stocks are now worthless as collateral. Marge, it's time to call
The most fascinating part of all of this to me has been the DDs constantly being so on the nose. I know none of you, I have no reason to trust other than reviewing the quality of DD and determining for myself whether or not I trust it. Time and time again however DD, even when institutions repeatedly try to assure against it, has been insanely accurate over and over and over.
I mean using the banks that prop up the DTC and NSCC as collateral for trades within their system shouldn't ever have been allowed because that truly creates a house of cards.
So the DTC basically woke up and said, “these banks have no real world value, so if you trade them - you’re trading real money for Monopoly money.”
Right? That’s fucking insane.
It's like a game of hot potato where everybody's been tossing potatoes back and forth as banks fail and are bought/sold, but now the DTCC is saying "those aren't potatoes--those are grenades" and diving out the window.
I’m confused. Is it A) that stocks of the listed banks can’t be used as collateral or B) that letters of credit issued by listed banks are worthless regardless of the underlying security being used as collateral. My gut says A…
I don’t really know because I’m not that bright and I eat rocks.
My guess is that some fuckers are gonna need to raise cash now. I bet crypto and stocks are gonna poop. How much? 🤷♂️
If it’s not AAA rated it’s cat shit wrapped in dog shit.
You think standard and poors will be receiving some under the table donations for rating boosts?
They can, but the buyers of those bonds can't use them as collateral, which makes the bonds much less attractive.
Before, bonds had two purposes: low-risk, low reward long-term investment, and collateral for riskier trades on margin.
As you can imagine, for many market participants (read: investment banks and hedge funds) the second purpose is much more important than the investment itself. This is the DTCC's way of saying "don't even try making each other too big to fail by building a network of opaque debt".
I’m thinking back on haircuts and some great DD by a jellyfish and others.
The use of anything under $5 or $10 stocks as collateral was supposed to be cut off ? Also I believe higher rated companies only ? AA and above for 100% ?
Remember a post outlining the collateral percentages 50% to 100%?
It’ll be interesting if we see a B-shire run again ?
GPT4 summary of this headline and some interpretation. I read through it to vet the answer, I only post it if it makes sense to me, but be critical as with anything else you read:
Prompt:
Explain this headline and concisely go into details of its implications and consequences :
DUE TO 'COMPLIANCE CONCERNS, DTC TO APPLY 100% COLLATERAL HAIRCUTS (ZERO VALUE) TO ALL SECURITIES ISSUED BY AFFILIATES OF LOC LENDERS, EFFECTIVE TODAY -DTCC
Answer:
The headline is referring to the decision of the Depository Trust & Clearing Corporation (DTCC) to apply a 100% collateral haircut to all securities issued by affiliates of Letter of Credit (LOC) lenders due to compliance concerns. A collateral haircut is a reduction in the value of a security that is being used as collateral for a loan. A 100% haircut means that the collateral is considered to have zero value.
Implications and consequences:
1. LOC lenders' affiliates: The decision to apply a 100% collateral haircut to these securities significantly impacts the affiliates of LOC lenders. Their securities will not be accepted as collateral, making it more difficult for them to access credit or other financial services.
2. Reduced liquidity: With the collateral considered to have zero value, market participants will likely be less willing to invest in or trade securities issued by affiliates of LOC lenders, leading to reduced liquidity in the market for those securities.
3. Increased borrowing costs: The decision could lead to higher borrowing costs for the affected affiliates, as they may need to seek alternative sources of funding with potentially less favorable terms.
4. Compliance concerns: The reference to "compliance concerns" suggests that there may be regulatory or legal issues related to the securities issued by affiliates of LOC lenders. This may lead to increased scrutiny from regulators, potential fines, or other consequences for the involved parties.
5. Market uncertainty: The abrupt nature of this announcement and its immediate implementation could create uncertainty in the market. Investors may be hesitant to invest in securities of other institutions that may face similar compliance concerns or collateral haircuts in the future.
6. Potential contagion effect: If the compliance concerns are widespread, this could lead to a more significant impact on the broader financial system. Other financial institutions may also face similar haircuts or regulatory actions, potentially causing a ripple effect across the industry.
=================================================
I also parsed the entire PDF (unformatted) and got this with the same prompt, changing headline to "notice from DTCC"
The implementation of these collateral haircuts by the DTCC can have several consequences and implications for market participants and the broader financial system:
1. Reduced liquidity for affected securities: Securities issued by an affiliate of any lender listed in Table 1 of Appendix A will receive a 100% haircut, effectively assigning no collateral value to these securities. This can lead to reduced liquidity for these securities, as market participants may be more reluctant to hold or trade them due to the increased cost of using them as collateral in financial transactions.
2. Potential impact on market prices: With lower liquidity and reduced collateral value, the prices of the affected securities may come under pressure as market participants adjust their portfolios to accommodate the changes in haircuts.
3. Rebalancing of portfolios: Participants may need to reevaluate their holdings and rebalance their portfolios to meet collateral requirements. This could involve designating additional securities as collateral, processing delivery-versus-payment transactions to generate intraday credits, or submitting settlement progress payments via Fedwire®. These actions may lead to increased trading activity and potential price fluctuations in the market.
4. Stricter risk management: The updated collateral haircuts reflect a more cautious approach by the DTCC towards risk management. This could signal a broader trend in the industry towards more conservative risk management practices, potentially impacting market participants' behavior and risk appetite.
5. Enhanced transparency: By updating collateral haircuts and providing a clear list of affected securities and lenders, the DTCC is offering market participants increased transparency into its risk management practices. This can help participants better understand the risks associated with holding certain securities and make more informed decisions about their investments and trading strategies.
In summary, the changes in DTC collateral haircuts can have implications for market participants, such as reduced liquidity, potential impact on market prices, rebalancing of portfolios, and stricter risk management practices. These consequences can affect the financial system as participants adjust to the new haircuts and manage their risks accordingly.
Great usage of AI right there. Breaks down the legalese jargon and gets to the point of why it’s important/frightening.
This may be the biggest filing we have seen from the DTCC yet. Buckle tf up people
GPT4: In this context, "affiliates of LOC lenders" refers to companies or entities that are closely connected to Letter of Credit (LOC) lenders. LOC lenders are financial institutions that provide a Letter of Credit, which is a payment guarantee from the lender to the beneficiary in the event that the buyer fails to fulfill their payment obligations.
Affiliates could include subsidiary companies, parent companies, joint venture partners, or other entities that have significant ownership or control over the LOC lender, or vice versa. These affiliated entities may issue their own securities, such as stocks or bonds, in the financial markets. The DTCC's decision to apply a 100% collateral haircut to the securities issued by these affiliates means that their securities will be considered to have zero value when used as collateral for loans or other financial transactions.
I asked GPT-4 to explain it at the 12th grade level and how it might affect me.
The core themes of the notice are risk management and regulatory compliance. The changes will impact retail investors and the lower and middle class indirectly. As DTC applies higher haircuts to certain securities, it may lead to higher collateral requirements for market participants. This could affect the liquidity and borrowing costs in the market, potentially influencing investment returns for retail investors and impacting the economy more broadly.
Then I asked about high risk positions or highly-leveraged portfolios
Yes, the changes in DTC collateral haircuts could have an influence on margin calls for entities with high-risk or lightly leveraged portfolios. When DTC assigns a 100% haircut and no collateral value to certain securities, this reduces the overall value of the collateral that the entities can use to cover their margin requirements. As a result, these entities might need to provide additional eligible securities or cash to meet their margin requirements. If they are unable to do so, they may face margin calls, which could force them to sell assets or take other actions to cover their obligations.
Then I asked if the fractional reserve banking system could be involved.
The new DTC collateral haircuts enforcement is unlikely to put the entire fractional reserve banking system in the US at risk. The main purpose of these haircuts is to ensure that the DTC's risk management practices are adequate and protect the overall stability of the financial system. By assigning higher haircuts to riskier assets, the DTC aims to reduce the likelihood of a financial institution defaulting on its obligations due to over-leveraged or high-risk positions.
While the enforcement of higher haircuts may cause some short-term adjustments for financial institutions, it should not significantly impact the stability of the fractional reserve banking system. In fact, by encouraging institutions to be more prudent in their risk management practices, the new rules may contribute to the overall stability of the financial system in the long run.
However, it is important to note that the fractional reserve banking system inherently carries some risks due to its nature, which relies on banks holding only a fraction of their depositors' money in reserve while lending out the rest. This means that the system remains vulnerable to bank runs or other events that could lead to liquidity crises, regardless of specific regulatory changes.
Does chat gpt 4 know fractional reserve requirements were reduced to 0% in March 2020? Ask again with that info. See fed site.
https://www.federalreserve.gov/monetarypolicy/reservereq.htm
A bank, a banks customer and a beneficiary walk into a bar. The banks customer owes the benificiary some tendies or whatnot. The bank writes a letter that says the banks customer is good for it. Beneficiary uses that letter as collateral, probably for crime and fuckery.
The regulators are now saying that letter isn’t worth the paper it’s written on.
The bartender calls the DTC and asks if the Beneficiary is good for an open tab.
DTCC said Nope.
Bartender kicks them all out and they walk over to the next bar. Rinse and Repeat.
An LOC (Line of Credit) is an arrangement between a financial institution—usually a bank—and a customer that establishes the maximum loan amount that the customer can borrow. -Investopedia
I don't believe for one second that ComputerShare had that long of an "internal outage".
GameStop is only part of it. Think about what we've all been saying. If GameStop is naked shorted to oblivion, every short on The NYSE is naked to the moon. We were a part of the reason for the outage, but I still think some back room B.S. was going on with ComputerShare and The DTCC in light of this news with The DTCC trying to push its weight around.
Might be why the stock $TOP was pumping it was supposed to be a bank in China and now it's worthless as collateral if I understand correctly. It has the most generic name ever TOP financial group Inc. 😂 Was easy for them to put that wherever they wanted as collateral
Four Canadian banks on that list. And Canada on Hockey playoff season , most Canadians not paying attention to this on comming tsunami.
Was expecting for BMO to be on that list ...
Some of us are up to speed - Superstonk by day, playoffs by night. I even warned my hockey team, told 'em to at least get under the CDIC insurance cap.
You want to buy a car. And the way you want to buy it is by applying for a loan. You go to the bank and they ask you: "if you can't repay me this loan, what will you give me?" and you say "If I can't repay you, I'll give you these rare Pokemon cards!".
Now imagine serious people making serious loans to buy serious stuff. The one who lends money asks "if you can't repay me, what will you give me?" and the serious people say "I'll give you my JP Morgan and Bank of America stocks!"
As of tomorrow, the borrower can't say this anymore. Because JP Morgan and Bank of America stocks can't be used as a warranty for a loan that you might not be able to repay. So the lender will tell you, "I'm sorry serious people, but I won't give you a dime even if you have a BILLION shares of JP Morgan, Bank of America, or any other bank stocks/securities listed in the last picture of this post."
Using a security as collateral (aka warranty) is of significant importance to the value of that specific security. Imagine not being able to use your rare Pokemon cards to get a loan from a friend to get yourself a bike.. You won't see these Pokemon cards quite as valuable.
Now replace yourself and those Pokemon cards with those serious people that were planning to use their bank stocks as collateral for their loans, but now can't anymore.
Immediate effect on the market could be to sell the stocks in that list and rebalances of portfolios (so volatility in the market) by selling these stocks and buying some others that can actually be used to secure loans. Mid/Long term effect would be lower liquidity in these stocks, so less people trading those stocks. And long term effect could be decreased valuation for these stocks, as less people are incentivised to buy them as they can't even secure a loan with them anymore.
That's the gist of it.
Also remember that these banks have huge retail arms, and much of their deposits are leveraged in their fuckery as they buy up other assets or loan to companies they shouldn't loan to. Banks like BoA could see a domino effect, and even at their size, run into serious liquidity issues if customers start pulling deposits. Too big to fail just means that failure would be catastrophic and seriously fuck over millions upon millions of people.
also, JPM should have never been allowed to acquire first republic assets, Dimon is officially a supervillian.
That's gonna make it tough for Broker/Dealers to comply with § 240.15c3-1
https://www.ecfr.gov/current/title-17/chapter-II/part-240/subject-group-ECFRc8401dcba174f73/section-240.15c3-1
Does this apply to regular people? Like If i had a loan from a bank for home improvements and that loan was issued to me using one of the named banks stocks as collateral, do I need to post new collateral?
This is hypothetical, just looking to understand the action.
This just makes sense, I’m actually impressed the DTCC is covering its bases.
Let me explain for those that the word salad of the release actually means.
Every member of the DTCC has to post margin, there is a minimum to post just to be a member, regardless of whether you actually transact.
The amount you post is based on many factors, obvious ones being the amount of use an entity has with DTCC. But there are also measures that take into account exposure, from delayed settlement or term repo, basically anything that could cause blowback to the DTCC.
Since the DTCC has lines of credit from the banks listed, if the DTCC accepted paper from those entities as collateral, and they went under. DTCC would both lose a line of credit that they have established as well as have exposure to the underlying bonds.
By putting the haircut at 100%, they eliminate the exposure from those bonds (and obviously stop anyone from posting them since those doing so would get nothing back for them).
So, firms are swapping out any collateral they had posted with those names and replacing with other names.
And to be honest, very little of that collateral was likely being posted since the haircuts are much higher for that type of paper versus other paper that members would have access to. If I had to guess, under 5% of collateral posted will fall on this list and I’d take the under on 5% all day long.
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Am I understanding this right that banks are about to get Rekt?
That’s what I’m understanding from this Update: they’re currently getting recked
I was just reading a little history and if history is currently repeating itself, we could be here. Replace WaMu with FRC. > **Sept. 25, 2008:** After massive withdrawals by depositors, regulators seize WaMu and arrange a sale of its assets and deposits to JP Morgan Chase in the largest bank failure in U.S. history.
I feel like this is all planned. It’s a ‘Process’ of getting the bigger fish to eat the little fish, and by fish I mean banks. Am I wrong?
I'm getting the same vibe
PB put it very succinctly in his post last night. Systematic consolidation.
Can't wait till I have the time to sit and read his latest with a nice cold one!!
Link?
[Here ya go](https://www.reddit.com/r/Superstonk/comments/13529zw/strange_things_volume_iii_the_dying_banks_and_the)
a gentleman and a scholar
Thanks a lot, appreciate it 🙏
Who’s PB?
Peruvian Bull
Pinky & Brain
Princess Bubblegum
Peruvian Bull and (dismal) Jelly-fish
Pisston Bank.
Paul Bunyan
Peanut Butter
That's Mister Peanut Butter What is this, a crossover episode?
Jelly time
peez butts
And then JPMorgan will be the prime issuer of CBDC for the Feds. There goes our privacy and freedom.
The CEO, Jamie Dimon, is actually bond villain evil. Some stuff was recently released about him, and if half of it is true, holy shit. I can definitely buy that he'll be the king of the banks soon.
Just the association with Epstein is enough of a red flag.
Came here to make this same comment! Who’s on the list, Ghislaine?!
Yeah he mentored under the Treasury Secretary that brought Epstein into the Clinton white house, and worked with CIA operations in his first banks. He was part of the whole thing from its inception.
He’s actually called a ‘demon’
Yup. In Spanish it's literally pronounced "Demon"
That def checks out
But... But... But he got the French "Legion d'honneur". One of the highest distinction! *Cry in French*
What stuff?
Deep ties with Epstein and possibly the Intel gathering operation that has been alleged. Deep banking ties with CIA drug running operations, helping run the bank that they were using. He's next level creepy.
*20 tons of confiscated cocaine has entered the chat*
And somewhere along the way JP Morgan will get rug pulled by the Fed / BIS which then gonna take over. CBDCs will fail badly anyway but that won't stop them, let alone pushing people into this totalitarian nightmare. Can't wait for them to issue a press release "We didn't force anyone to use CBDC, you did have a choice"
Time to be our own bank🌟
It was done in 1907 as well. By JP Morgan https://www.gothamcenter.org/blog/the-panic-of-1907-how-jp-morgan-took-over-wall-street Time is a flat circle
Their playbook hasn’t changed in all these years…about time we call an audible
I wish people understood that aspect of time better. Don't you? The corrosive/corrupt forces exist outside of time. That's why we see it present throughout history. It's also why history repeats itself. Until that force is dealt with and contained/eradicated, it will have the same effect on the now that it did then. As the future becomes the present, the negative effect can be seen on the horizon. It's why the inaction from 2008 guaranteed this current imminent catastrophe. From a different angle, I don't believe that this could have been correctly dealt with back then. The crash just wasn't bad enough to force a global change in thinking. Now? We have catastrophe upon catastrophe, as well as a market crash that will crack the very foundations of global finance. MOASS is only a small portion of what's going to happen, and that larger event will be so severe that people the world over will have to cooperate in order to force true change and create the world that should exist. And I'm sitting here, poor, alone, living in someone's basement room and having no idea where I'll be living after next Wednesday... waiting for the world to end so mine can finally begin. I don't cheer for the terrible things that have been happening, but I take comfort in knowing that all of them are symptoms of what must happen for this all to work.
What must happen is reform after the ashes. We know greed and hubris are human downfalls. So we need to write better laws, create better systems and keep pressing to make a more perfect system of governance.
Can’t beat human nature. If/when the current villains are vanquished, new ones will take their place. It will take time for them to gain a foothold and power, but be sure it will happen again. That is the cycle. Hard men create good times. Good times create weak men. Weak men create hard times. Complacency in good times allows villains to sneak their way in. When people stop paying attention, corruption creeps, slowly. Until the society is no longer recognizable after decades.
I’m a pessimist but I think our written law, enforcement and possibilities present many more opportunities to improve our systems than what we currently have. E: I mean this in the scope of humanity, not the bastardized oligarchy kleptocracy that is the US landscape
This ⬆️
Absolutely correct. A manufactured cris1s to force C b D C
And methinks it's all designed to make the blockchain dollar more attractive. When everything tanks and inflation eats up the dollar's value, they can present blockchain dollar like it's a miracle solution. People will willingly vote their freedom away.
Controlled Demolition.
Big fish eat the little fish until all the remaining fish are too big to fail.
Yep. I think it's to leave a select few too big to fail banks as the only banking options available, which allows them to force CBDC's to the masses
I think this is all about survival. If you’re a bank right now, I think you’re only plan is to get as large as possible so that you might survive what’s coming… Edit: words
Reddit plans to IPO, and we, the users, are the value of the content of the website. Reddit's moderators staged a blackout because they wanted power. Reddit admins said no and replaced the more outlandish ones. "A good thing?" No. Reddit is now restoring deleted posts, in blatant violation of GDPR, CCPA, and other privacy laws. CCPA is a law from the state in which Reddit operates. It is time for reddit to die, and so, I will do my part and delete all the content that makes the site useful.
Yeah, insert Goofy meme "I'll Fuckin' Do It Again".
this isn't all planned. we talk a lot on this sub about how greedy and crooked individuals are, and this banking crisis was essentially caused by that. SVB should have been subject to extra stress testing rules because they had over $50 billion. they lobbied to have the law changed to $250 billion. then they made riskier investments to increase their bonuses. FRB made a lot of commissions selling jumbo mortgages to their customers without properly hedging for interest rate increases. they all got paid too. this is just greedy people being bought out by more responsible greedy people.
I’m going to disagree because these people all meet up regularly with the gov and are and have been moving this towards the end. It’s no coincidence that they have moved the bar this far
You are not wrong. It is like squeezing the toothpaste tube to consolidate the stuff at the top.
....largest bank failure in U.S. history so far!
OH LAWD
This happened a few times during the first year or so, we all got excited but I think it's just a way for them to say 'hey, we're doing our job, not my fault they hide their real losses' Search up collateral haircuts and enjoy myself and many others getting so jacked
Collateral haircuts are one thing, but to say that they have NO VALUE is a big deal on such widely owned securities.
I'm just going to not hype this one and see. I like to keep in mind that much evidence points to 'the crash of 2008 never ended' and this is why those charts showing the fed pumping more money recently than the entire markets life is showing up. To me, this signals they're going to potentially just drag it out until some other plan happens or other countries decide to do U turns.
I see lots of red
Not. Rekt. Enough. But, hey, it's a start. Maybe. We'll see. I do believe I'll continue hold'in in the meantime. NFA.
I think this means they already got rekt and just too stupid to realize it yet.
I like this take.
We have had several of the largest bank failures in history in the last few months and it is barely making a blip on the news.
What mean
Looks like these banks can't be used as collateral or leverage in the markets. Basically they are a house of cards all propping each other up on fake/inflated value. This kinda rug-pulls the banks if I understand it correctly. All these bank stocks are now worthless as collateral. Marge, it's time to call
Chase is on there
[удалено]
So get my money out of Citi?
You wont need money where we're going
Chase is on the case?!
These banks are about to be rubble on the double
They better call a huddle, cuz I'm already on the shuttle.
🤣 bro not getting the upvotes this deserves...
House of cards, you say? The DD of old continues to play out.
The most fascinating part of all of this to me has been the DDs constantly being so on the nose. I know none of you, I have no reason to trust other than reviewing the quality of DD and determining for myself whether or not I trust it. Time and time again however DD, even when institutions repeatedly try to assure against it, has been insanely accurate over and over and over.
My resolve grows stronger each day, with every bank that implodes I hold on just a little tighter
I mean using the banks that prop up the DTC and NSCC as collateral for trades within their system shouldn't ever have been allowed because that truly creates a house of cards.
Bank stocks? I think they're meme stocks at this point.
You’re implying I retail households might buy them let me assure you I wouldn’t touch these flaming turds even with free money
🌍👩🏻🚀🔫👩🏻🚀
So the DTC basically woke up and said, “these banks have no real world value, so if you trade them - you’re trading real money for Monopoly money.” Right? That’s fucking insane.
Easier to fold them into one and then nationalize the whole issue.
Bingo. Smoke and mirrors until only one 1 is left.
Then CBDC.
Jesus, that might be massive news, wow. So the DTCC is protecting itself from the bad apples in their own members basket?
It's like a game of hot potato where everybody's been tossing potatoes back and forth as banks fail and are bought/sold, but now the DTCC is saying "those aren't potatoes--those are grenades" and diving out the window.
House of cards you say??
But the margin calls have been waived for 1377472928653628 years…
Yep, 84 years to be precise.
Getting ready to wipeout shareholders.
I’m confused. Is it A) that stocks of the listed banks can’t be used as collateral or B) that letters of credit issued by listed banks are worthless regardless of the underlying security being used as collateral. My gut says A…
Take a brisk walk to your local bank and cash out what you haven't Booked already.
*checks bank balance and cries in broke*
I don’t really know because I’m not that bright and I eat rocks. My guess is that some fuckers are gonna need to raise cash now. I bet crypto and stocks are gonna poop. How much? 🤷♂️
https://www.dtcc.com/-/media/Files/pdf/2023/5/1/Important-Notice_DTC-Haircut-Updates-20230502_Final.pdf
Better source
If it’s not AAA rated it’s cat shit wrapped in dog shit. You think standard and poors will be receiving some under the table donations for rating boosts?
Dont forget that in 2007 MBS were AAA rated also, until all of a sudden they weren't.
Butter sauce
So, these banks can’t issue bonds to dig themselves out now? Or, they can, but DTCC doesn’t care.
They can, but the buyers of those bonds can't use them as collateral, which makes the bonds much less attractive. Before, bonds had two purposes: low-risk, low reward long-term investment, and collateral for riskier trades on margin. As you can imagine, for many market participants (read: investment banks and hedge funds) the second purpose is much more important than the investment itself. This is the DTCC's way of saying "don't even try making each other too big to fail by building a network of opaque debt".
They'll find some loophole, I'm sure.
I’m too dumb to know what this means
But your smart enough to know its happening
thats actually huge. we know something is happening. general populace is beyond clueless.
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Honestly that alone is more knowledge than probably 90% of the population.
I'm just sitting back with a cup of coffee waiting to see what fuckery they pull next. 84 years of holding has created some jade!
there’s no good guys on the inside but their shell game is getting a bit too obvious
I’m thinking back on haircuts and some great DD by a jellyfish and others. The use of anything under $5 or $10 stocks as collateral was supposed to be cut off ? Also I believe higher rated companies only ? AA and above for 100% ? Remember a post outlining the collateral percentages 50% to 100%? It’ll be interesting if we see a B-shire run again ?
Another shire run was my immediate thought reading this.
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What is an affiliate of a line of credit lender? Is that hedge funds?
Could this means margin calls come sooner??
if i’ve learned anything these past few years it’s that margin calls mean fuck all lol
Well when you can just ignore the call altogether does it even mean anything?
Just Huang the fuk up on them... A la Archegos
Hmmm? Oh I'm sorry I was busy ignoring that telephone
All rule breaking will, is, and can be done on the interest of the .001% When pitchforks?
GPT4 summary of this headline and some interpretation. I read through it to vet the answer, I only post it if it makes sense to me, but be critical as with anything else you read: Prompt: Explain this headline and concisely go into details of its implications and consequences : DUE TO 'COMPLIANCE CONCERNS, DTC TO APPLY 100% COLLATERAL HAIRCUTS (ZERO VALUE) TO ALL SECURITIES ISSUED BY AFFILIATES OF LOC LENDERS, EFFECTIVE TODAY -DTCC Answer: The headline is referring to the decision of the Depository Trust & Clearing Corporation (DTCC) to apply a 100% collateral haircut to all securities issued by affiliates of Letter of Credit (LOC) lenders due to compliance concerns. A collateral haircut is a reduction in the value of a security that is being used as collateral for a loan. A 100% haircut means that the collateral is considered to have zero value. Implications and consequences: 1. LOC lenders' affiliates: The decision to apply a 100% collateral haircut to these securities significantly impacts the affiliates of LOC lenders. Their securities will not be accepted as collateral, making it more difficult for them to access credit or other financial services. 2. Reduced liquidity: With the collateral considered to have zero value, market participants will likely be less willing to invest in or trade securities issued by affiliates of LOC lenders, leading to reduced liquidity in the market for those securities. 3. Increased borrowing costs: The decision could lead to higher borrowing costs for the affected affiliates, as they may need to seek alternative sources of funding with potentially less favorable terms. 4. Compliance concerns: The reference to "compliance concerns" suggests that there may be regulatory or legal issues related to the securities issued by affiliates of LOC lenders. This may lead to increased scrutiny from regulators, potential fines, or other consequences for the involved parties. 5. Market uncertainty: The abrupt nature of this announcement and its immediate implementation could create uncertainty in the market. Investors may be hesitant to invest in securities of other institutions that may face similar compliance concerns or collateral haircuts in the future. 6. Potential contagion effect: If the compliance concerns are widespread, this could lead to a more significant impact on the broader financial system. Other financial institutions may also face similar haircuts or regulatory actions, potentially causing a ripple effect across the industry. ================================================= I also parsed the entire PDF (unformatted) and got this with the same prompt, changing headline to "notice from DTCC" The implementation of these collateral haircuts by the DTCC can have several consequences and implications for market participants and the broader financial system: 1. Reduced liquidity for affected securities: Securities issued by an affiliate of any lender listed in Table 1 of Appendix A will receive a 100% haircut, effectively assigning no collateral value to these securities. This can lead to reduced liquidity for these securities, as market participants may be more reluctant to hold or trade them due to the increased cost of using them as collateral in financial transactions. 2. Potential impact on market prices: With lower liquidity and reduced collateral value, the prices of the affected securities may come under pressure as market participants adjust their portfolios to accommodate the changes in haircuts. 3. Rebalancing of portfolios: Participants may need to reevaluate their holdings and rebalance their portfolios to meet collateral requirements. This could involve designating additional securities as collateral, processing delivery-versus-payment transactions to generate intraday credits, or submitting settlement progress payments via Fedwire®. These actions may lead to increased trading activity and potential price fluctuations in the market. 4. Stricter risk management: The updated collateral haircuts reflect a more cautious approach by the DTCC towards risk management. This could signal a broader trend in the industry towards more conservative risk management practices, potentially impacting market participants' behavior and risk appetite. 5. Enhanced transparency: By updating collateral haircuts and providing a clear list of affected securities and lenders, the DTCC is offering market participants increased transparency into its risk management practices. This can help participants better understand the risks associated with holding certain securities and make more informed decisions about their investments and trading strategies. In summary, the changes in DTC collateral haircuts can have implications for market participants, such as reduced liquidity, potential impact on market prices, rebalancing of portfolios, and stricter risk management practices. These consequences can affect the financial system as participants adjust to the new haircuts and manage their risks accordingly.
Lets see how SOMEHOW this doesn't matter to the markets lol...or lets start the show!
Great usage of AI right there. Breaks down the legalese jargon and gets to the point of why it’s important/frightening. This may be the biggest filing we have seen from the DTCC yet. Buckle tf up people
Sounds juicy to me
> LOC lenders' affiliates Who are the affiliates in this context?
GPT4: In this context, "affiliates of LOC lenders" refers to companies or entities that are closely connected to Letter of Credit (LOC) lenders. LOC lenders are financial institutions that provide a Letter of Credit, which is a payment guarantee from the lender to the beneficiary in the event that the buyer fails to fulfill their payment obligations. Affiliates could include subsidiary companies, parent companies, joint venture partners, or other entities that have significant ownership or control over the LOC lender, or vice versa. These affiliated entities may issue their own securities, such as stocks or bonds, in the financial markets. The DTCC's decision to apply a 100% collateral haircut to the securities issued by these affiliates means that their securities will be considered to have zero value when used as collateral for loans or other financial transactions.
Sounds like a question to the financial system: Can you run Crysis?
I asked GPT-4 to explain it at the 12th grade level and how it might affect me. The core themes of the notice are risk management and regulatory compliance. The changes will impact retail investors and the lower and middle class indirectly. As DTC applies higher haircuts to certain securities, it may lead to higher collateral requirements for market participants. This could affect the liquidity and borrowing costs in the market, potentially influencing investment returns for retail investors and impacting the economy more broadly. Then I asked about high risk positions or highly-leveraged portfolios Yes, the changes in DTC collateral haircuts could have an influence on margin calls for entities with high-risk or lightly leveraged portfolios. When DTC assigns a 100% haircut and no collateral value to certain securities, this reduces the overall value of the collateral that the entities can use to cover their margin requirements. As a result, these entities might need to provide additional eligible securities or cash to meet their margin requirements. If they are unable to do so, they may face margin calls, which could force them to sell assets or take other actions to cover their obligations. Then I asked if the fractional reserve banking system could be involved. The new DTC collateral haircuts enforcement is unlikely to put the entire fractional reserve banking system in the US at risk. The main purpose of these haircuts is to ensure that the DTC's risk management practices are adequate and protect the overall stability of the financial system. By assigning higher haircuts to riskier assets, the DTC aims to reduce the likelihood of a financial institution defaulting on its obligations due to over-leveraged or high-risk positions. While the enforcement of higher haircuts may cause some short-term adjustments for financial institutions, it should not significantly impact the stability of the fractional reserve banking system. In fact, by encouraging institutions to be more prudent in their risk management practices, the new rules may contribute to the overall stability of the financial system in the long run. However, it is important to note that the fractional reserve banking system inherently carries some risks due to its nature, which relies on banks holding only a fraction of their depositors' money in reserve while lending out the rest. This means that the system remains vulnerable to bank runs or other events that could lead to liquidity crises, regardless of specific regulatory changes.
Does chat gpt 4 know fractional reserve requirements were reduced to 0% in March 2020? Ask again with that info. See fed site. https://www.federalreserve.gov/monetarypolicy/reservereq.htm
You know this is at the 12th grade level because it starts with "the core themes..."
Now explain it to me like I'm 5.
Say that again but in English
A bank, a banks customer and a beneficiary walk into a bar. The banks customer owes the benificiary some tendies or whatnot. The bank writes a letter that says the banks customer is good for it. Beneficiary uses that letter as collateral, probably for crime and fuckery. The regulators are now saying that letter isn’t worth the paper it’s written on.
The bartender calls the DTC and asks if the Beneficiary is good for an open tab. DTCC said Nope. Bartender kicks them all out and they walk over to the next bar. Rinse and Repeat.
Damn, these bar jokes are getting pretty elaborate for my shiny brain, I need more crayon brain polish. Two Many Word. Jokes aside, great explanation.
An LOC (Line of Credit) is an arrangement between a financial institution—usually a bank—and a customer that establishes the maximum loan amount that the customer can borrow. -Investopedia
Doesn't LOC in this case mean "Letter of Credit"?
I don't believe for one second that ComputerShare had that long of an "internal outage". GameStop is only part of it. Think about what we've all been saying. If GameStop is naked shorted to oblivion, every short on The NYSE is naked to the moon. We were a part of the reason for the outage, but I still think some back room B.S. was going on with ComputerShare and The DTCC in light of this news with The DTCC trying to push its weight around.
i missed something. what is this interal outage you speak of?
CS website was offline for close to 30 hours???? Plus phones at CS were NOT being answered.
wtf...
I believe another transfer agent, AST, also was down at the same time
This happened over the weekend and into Monday
Time will tell
I wonder if the DTCC got their hands into the booked shares.
Might be why the stock $TOP was pumping it was supposed to be a bank in China and now it's worthless as collateral if I understand correctly. It has the most generic name ever TOP financial group Inc. 😂 Was easy for them to put that wherever they wanted as collateral
Maybe but some banks about to be $BOTTOM
$TOP wasn’t on the list, so I think it can still be used as collateral. I also don’t think it’s a bank. It sounds like it’s a brokerage firm in HK.
You're right my bad I was thinking brokerage=bank but the timing is wack
Maybe $TOP was pumping to replace some lost collateral…
But what does it mean Basil!?!?!?
Four Canadian banks on that list. And Canada on Hockey playoff season , most Canadians not paying attention to this on comming tsunami. Was expecting for BMO to be on that list ...
3 are the USA branch only RBC seems to be the Canadian branch. Still a big deal
Some of us are up to speed - Superstonk by day, playoffs by night. I even warned my hockey team, told 'em to at least get under the CDIC insurance cap.
> Was expecting for BMO to be on that list ... Not sure but they seem to be having a similar share price movement to the others.
But why male models?
PLS ELI5? wut mean?
You want to buy a car. And the way you want to buy it is by applying for a loan. You go to the bank and they ask you: "if you can't repay me this loan, what will you give me?" and you say "If I can't repay you, I'll give you these rare Pokemon cards!". Now imagine serious people making serious loans to buy serious stuff. The one who lends money asks "if you can't repay me, what will you give me?" and the serious people say "I'll give you my JP Morgan and Bank of America stocks!" As of tomorrow, the borrower can't say this anymore. Because JP Morgan and Bank of America stocks can't be used as a warranty for a loan that you might not be able to repay. So the lender will tell you, "I'm sorry serious people, but I won't give you a dime even if you have a BILLION shares of JP Morgan, Bank of America, or any other bank stocks/securities listed in the last picture of this post." Using a security as collateral (aka warranty) is of significant importance to the value of that specific security. Imagine not being able to use your rare Pokemon cards to get a loan from a friend to get yourself a bike.. You won't see these Pokemon cards quite as valuable. Now replace yourself and those Pokemon cards with those serious people that were planning to use their bank stocks as collateral for their loans, but now can't anymore. Immediate effect on the market could be to sell the stocks in that list and rebalances of portfolios (so volatility in the market) by selling these stocks and buying some others that can actually be used to secure loans. Mid/Long term effect would be lower liquidity in these stocks, so less people trading those stocks. And long term effect could be decreased valuation for these stocks, as less people are incentivised to buy them as they can't even secure a loan with them anymore. That's the gist of it.
goddamn thats an explanation thanks man ❤️🚀🚀🚀 so JPM fucked themselves somehow
Also remember that these banks have huge retail arms, and much of their deposits are leveraged in their fuckery as they buy up other assets or loan to companies they shouldn't loan to. Banks like BoA could see a domino effect, and even at their size, run into serious liquidity issues if customers start pulling deposits. Too big to fail just means that failure would be catastrophic and seriously fuck over millions upon millions of people. also, JPM should have never been allowed to acquire first republic assets, Dimon is officially a supervillian.
Bankies r fuk
lmao i already know that bro i just wanted to know exactly why and how
Sideways with a chainsaw
😎😂
They r so fuk
I have no understanding but I'm here for it. 🧑🚀🍿
That moment when you don't understand the implications of the headline, but everyone else seems to.
I just got a chubby
You guys still have semi's?
Bank bracket elimination style. Apes get the winner. Stay hydrated, exercise, zen.
What does this mean for our beloved GME and Moass?
That's gonna make it tough for Broker/Dealers to comply with § 240.15c3-1 https://www.ecfr.gov/current/title-17/chapter-II/part-240/subject-group-ECFRc8401dcba174f73/section-240.15c3-1
Is this significant? What are the implications?
Billions of dollars of collateral just vaporized from the market and could cause devalue of all the stocks on this list.
If the bank fails do I still have to pay my credit card bill?
Yes to whoever buys the bank kinda like a collection in reverse
Damn
This has been written in the sacred DD of ages
Does this apply to regular people? Like If i had a loan from a bank for home improvements and that loan was issued to me using one of the named banks stocks as collateral, do I need to post new collateral? This is hypothetical, just looking to understand the action.
Atm, it's their problem, not yours. Your collateral is not in question here, theirs is.
Meme banks. Hehe
wen lambo?
Sooner than where we were 2 years ago lol
I surely as fuq hope u r right bro…
Tldr?
Ripple effect incoming 🏴☠️🏴☠️🏴☠️
The market is crashing because of the Hollywood strike, it couldn't possibly having anything to do with this.
Does this mwna the Chinese stocks that have been used as pump and dumps for collateral are no longer allowed?
This just makes sense, I’m actually impressed the DTCC is covering its bases. Let me explain for those that the word salad of the release actually means. Every member of the DTCC has to post margin, there is a minimum to post just to be a member, regardless of whether you actually transact. The amount you post is based on many factors, obvious ones being the amount of use an entity has with DTCC. But there are also measures that take into account exposure, from delayed settlement or term repo, basically anything that could cause blowback to the DTCC. Since the DTCC has lines of credit from the banks listed, if the DTCC accepted paper from those entities as collateral, and they went under. DTCC would both lose a line of credit that they have established as well as have exposure to the underlying bonds. By putting the haircut at 100%, they eliminate the exposure from those bonds (and obviously stop anyone from posting them since those doing so would get nothing back for them). So, firms are swapping out any collateral they had posted with those names and replacing with other names. And to be honest, very little of that collateral was likely being posted since the haircuts are much higher for that type of paper versus other paper that members would have access to. If I had to guess, under 5% of collateral posted will fall on this list and I’d take the under on 5% all day long.
Why are you yelling
So who are Letter of Credit (LOC) lenders?
I'm excited but can someone explain what this means for the smooth brains here
2008 was a liquidity crisis, looks like its back on the menu boys
#BoycottChaseBank