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Bruce Fenton Profile picture
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19 Jun, 10 tweets, 4 min read
DTCC is in the news

DTCC is the centralized trusted 3rd party who runs the ledger for public US stocks.
The ledger is built on antique systems & is complex. It’s comprised of thousands of members who don’t trust each other. The 3rd party is a bottleneck & full of flaws.

👇👇👇
The system is complex with many parties who need to interact with the ledgers —

due to regulations like Dodd Frank & antiquated systems, it still takes *days* for securities to transfer between firms
The flaws are massive

You would not believe how bad - in many cases they don’t even know how many shares exist of certain stocks & it doesn’t match up with the number of shares the issuer has listed
Here’s a video explaining more about how Dole foods ended up inadvertently selling more shares than they knew they had due to a clunky ledger
BTW DTCC is what’s behind the whole issue with shorting more stocks than exist

The system breaks & we have certain firms able to sell & retail locked out

it’s mostly fake & threatens the entire integrity of global capital markets

The markets are now unfair because of this!
Here’s an article explaining more about how the Reddit crowd piling into shorted stocks messes with the markets

The root flaw is not caused by Redditors but by an extremely outdated ledger system

The institutions are shorting more stock than exists!!

theregreview.org/2021/04/27/paz…
Btw

DTCC also had $1 trillion in securities damaged in a flood

Cmon
Distributed ledgers can fix this

A stock issued using a distributed ledger has no doubt about how many shares exist— there are also benefits to privacy

Using tech like Ln this is scalable as well- this is why we signed up to support the Liquid Network

blog.liquid.net/watchdog-capit…
Recently DTCC announced that within two years they want to decrease settlement time for securities to one business day after the trade date, T+1
That would still leave the old system in the dark ages relative to how #Bitcoin & crypto moves
A new & better system is coming & will change the world

If securities move easier & we can replace DTCC then we will see more capital formation and more shareholders of a lot more businesses & other securities - a long tail -it will do for securities what YouTube did for video

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More from @brucefenton

Bruce Fenton Profile picture
17 Jun
#Bitcoin as global money will change securities - There’s no way securities ledgers will exist in their current old school form - securities will exist but transform

Securities include all stocks, bonds, PE, VC, startups, public companies, small businesses, most real estate...
The current system for how securities move around is antiquated — Due to the need for multiple competing partial ledgers from brokers & clearing firms, the system relies on trusted third parties such as DTCC in the US
This can be replaced by a distributed ledger & be improved
This is one of the cases where a blockchain/ distributed ledger makes sense: to solve a variation of the Byzantine Generals Dilemma— your broker doesn’t have the full ledger of all the stock an issuer has, neither does the issuer- DLT means the chain could tell us who owns what
Read 8 tweets
Bruce Fenton Profile picture
23 May
As recently as the early 90s, investors had little idea what their portfolios were worth on a daily basis. Stock quotes were published in newspapers. Only professionals had real time stock quotes. To learn your account balance, you had to call your broker or wait for a statement.
Statements came out quarterly in most cases. Monthly statements were uncommon - and remember, this was all by physical mail.
Day trading was far more rare than today.
This created more long term thinking for many investors.
Wise investors had a plan and would stick to it.
Today we have a plethora of information we can access & act on instantly. Those who make money from this model encourage active trading, but it is antithetical to sound investing. Looking at your account daily & trading daily is more often a formula for ruin than wealth creation.
Read 7 tweets
Bruce Fenton Profile picture
21 May
Definition of a security in the US based on the 1933 Act:

any note,
stock,
treasury stock,
security future,
security-based swap,
bond,
debenture,
evidence of indebtedness,
certificate of interest or participation in any profit-sharing agreement,
collateral-trust certificate,

1/
2/
preorganization certificate or subscription,
transferable share,
investment contract, (⬅️⬅️⬅️ that’s a big one)
voting-trust certificate,
certificate of deposit for a security,
fractional undivided interest in oil, gas, or other mineral rights,
any put,
call,straddle,
option,
3/
or privilege on any security,
certificate of deposit,
or group or index of securities (including any interest therein or based on the value thereof),
or any put,
call,
straddle,
option,
or privilege entered into on a national securities exchange relating to foreign currency,
Read 7 tweets
Bruce Fenton Profile picture
4 Apr
Some don’t know:

Muslims believe in Jesus.
In Islam, Jesus Christ is considered a prophet who’s name is followed by “Peace be upon him”. Jesus is in more verses of the Koran than anyone other than the Prophet Mohammed. Muslims also believe Jesus was born of the Virgin Mary

1)
2) and that Jesus healed the sick. Many Muslims are named after Jesus and Mary.
Where Christianity and Islam differ most on this is that Christians believe Jesus was the son of God, died for our sins and was resurrected
many Muslims believe he was more of a spiritual son of God
3) and believe that his death was not for our sins. The Koran says that Jesus was crucified but not resurrected but people were led to believe this — what this means interpreted various ways- some Muslims believe Jesus did come back three days later but it
Read 7 tweets
Bruce Fenton Profile picture
12 Feb
I’ve only been out in the world less than 10 times in the last year. Worn a mask less than 10 times.
Went out yesterday.
People have gone nuts. The masks, the signs everywhere, restrictions; the general mood. Businesses closed everywhere. It’s an authoritarian hellscape.
Totally nonsensical and non-scientific wackiness in the name of “science”. I heard you can get a massage or facial but you still have to wear a mask - that’s just pure nonsense. Wearing masks when jogging or walking alone is insanity.
We have kids in schools with useless plexiglass barriers - arrows drawn on the floor telling people where to walk. People being arrested for walking down the street. Vendors refusing US dollars with the excuse of concern over inflection.
College kids are getting tested weekly.
Read 12 tweets
Bruce Fenton Profile picture
31 Jan
YES DECENTRALIZED LEDGERS CAN FIX WALL STREET

Send your champions - I will debate anyone on this.

It’s a complex topic not well suited for tweets.

But yes, much of this is solved by DLTs.

Root issue is a bad ledger & trusted 3rd parties.

A database can’t fix this.
A database is what we already have on Wall St and it’s a mess.

Understanding how to fix it first requires understanding how it works now (it’s counterintuitive). It’s a mistake to assume it’s an easy fix with “a database”.
A solution has to solve the problem of hundreds of various parties not trusting each other and complex high volume reporting and other factors.
It’s all about saying what is true in an untrusted environment.
Blockchains are actually good at that.
Read 8 tweets

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