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McSqueezyTheCow

@McSqueezyTheCow

Jun 18

Credit Suisse AG New York Branch, a federal branch of Credit Suisse AG, is now a federally-insured bank operating under the supervision and regulation of the Office of the Comptroller of the Currency (OCC).
Pull on this 🧵...

1/

The previous banking supervisor for Credit Suisse AG New York Branch was New York Department of
Financial Services.
Agreement By and Between Credit Suisse AG New York Branch New York, NY and The Office of the Comptroller of the Currency:
occ.gov/static/enforce…

2/

According to OCC's formal agreement with the bank, which is intended to "assure the safety and soundness of the Branch and its compliance with laws and regulations" and to "address deficiencies in the branch’s compliance related to the Bank Secrecy Act and other anti-money laundering laws and regulations", Credit Suisse AG New York Branch is executing this agreement as a requirement "for the branch’s conversion to a federal license"; effective May 28, 2024.
June 17, 2024 Office of the Comptroller of the Currency - News Release 2024-63:
occ.gov/news-issuances…

Read 17 tweets

McSqueezyTheCow

@McSqueezyTheCow

Apr 20

Did you know that BNY Mellon Capital Markets reported $3,667,348,309 of "Securities sold, not yet purchased", as of June 30, 2023?!?
A Quick🧵....

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June 30, 2023 BNY Mellon Capital Markets Statement of Financial Condition:
bnymellon.com/content/dam/bn…

2/

BNY Mellon Capital Markets is a broker-dealer registered with the SEC and FINRA, and is a wholly owned subsidiary of another wholly owned subsidiary of the Bank of BNY Mellon, a/k/a "BNY Mellon".
June 30, 2023 BNY Mellon Capital Markets Statement of
Financial Condition:
bnymellon.com/content/dam/bn…

3/

Ironically, despite being able to rack up more than $3.5 billion in sold, not yet purchased, BNY Mellon Capital Markets is not a material entity within the BNY Mellon organization, as illustrated by their absence from the organizational structure chart.
BNY Mellon defines a material entity as one that is "significant to the activities of our core business lines or critical operations".

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July 1, 2023 BNY Mellon Resolution Plan Public Section:
federalreserve.gov/supervisionreg…

Read 20 tweets

McSqueezyTheCow

@McSqueezyTheCow

Mar 20

Let's quickly look at how JPMorgan is responsible for the ballooning precious metals derivatives contracts.

A🧵...

1/

Office of the Comptroller of the Currency (OCC) tells us:
"Beginning January 1, 2022, the largest banks are required to calculate their derivative exposure amount for regulatory capital purposes using the Standardized Approach for Counterparty Credit Risk (SA-CCR). Under SA-CCR gold derivatives are considered precious metals derivative contracts rather than an exchange rate derivative contract resulting in an increase in reported precious metals derivative contracts compared to prior quarters".

Translation:

Regulation changes required banks calculate and report on gold derivatives, as their classification changed from exchange rate derivative contract to being precious metals derivatives contracts. This would ultimately lead to a spike in precious metals derivatives contracts.

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Office of the Comptroller of the Currency Quarterly Report on Bank Trading and Derivatives Activities for the First Quarter of 2022:
occ.gov/publications-a…

2/

January 2022, huh? I wonder what precious metals derivatives looked like before this change.

Read 14 tweets

McSqueezyTheCow

@McSqueezyTheCow

Mar 17

March 18, 2024 marks the beginning of new standards for U.S. treasury securities. More specifically, these standards apply to covered clearing agencies for U.S. treasury securities, as well as the broker-dealer customer protection rule.
A 🧵...

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ISDA OTC Derivatives Compliance Calendar [Updated: March 2024]:
isda.org/a/O6sgE/Update…

1/

So, what's changing?
The Securities and Exchange Commission (SEC) is adopting new rules which will amend standards to covered clearing agencies for U.S. Treasury securities, which will require:

1. Direct participants of a covered clearing agency will submit eligible secondary market transactions involving U.S. treasury securities to the covered clearing agency for clearing and settlement.

2. Additional amendments to standards for covered clearing agencies, as it relates to risk management.

3. Amendment of the broker-dealer customer protection rule, which will permit any margin required and on deposit with covered clearing agencies for U.S. Treasury securities to be included as a debit in the reserve formulas.

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Federal Register - Standards for Covered Clearing Agencies for U.S. Treasury Securities and Application of the Broker-Dealer Customer Protection Rule With Respect to U.S. Treasury Securities:
govinfo.gov/content/pkg/FR…

Read 16 tweets

McSqueezyTheCow

@McSqueezyTheCow

Mar 12

FTD's at the DTCC!
There have now been $1.2 trillion in treasury settlement failures at the DTCC in 2024, bringing the daily settlement failure average to $25 billion; $25,218,279,494.
A 🧵...

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DTCC Daily Total US Treasury and Agency Fails:

New York Federal Reserve - Frequently Asked Questions: TMPG Fails Charges [Revised October 19, 2020]:

Nasdaq Trading Calendar 2024:

Nasdaq Trading Calendar 2023:

Nasdaq Trading Calendar 2023:
dtcc.com/charts/daily-t…
newyorkfed.org/medialibrary/m…
nasdaqtrader.com/content/techni…
nasdaqtrader.com/content/techni…
nasdaqtrader.com/content/techni…

https://x.com/McSqueezyTheCow/status/1763220643078664381?s=20

2/

Making matters worse is, because of an elevated effective federal funds rate, DTCC participants that have failed to deliver treasuries have not paid a penalty for these FTD's in 369 consecutive trading days.

(We discussed this in more detail previously. See the below tweet)

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New York Fed Effective Federal Funds Rate:

February 29, 2024 McSqueezyTheCow Tweet:
newyorkfed.org/markets/refere…

https://x.com/McSqueezyTheCow/status/1763220643078664381?s=20

3/

So, why the big fuss, Squeezy?? What's a few trillion between friends??

Read 13 tweets

McSqueezyTheCow

@McSqueezyTheCow

Feb 7

New York Community Bancorp (NYCB) has recently been thrust into the limelight, as negative headline after negative headline has flooded the internet.

Let's quickly recap some recent events before looking at some red flags that could help us understand where things went wrong, and why NYCB may likely be the next FDIC-insured bank to fail.

A quick🧵...

Note:

"The Company" = NYCB

1/

(Bloomberg) --

"Mounting pressure from a top US watchdog [Office of the Comptroller of the Currency (OCC)] led to New York Community Bancorp’s surprise decision to slash its dividend and stockpile cash in case commercial real estate loans go bad, according to people with direct knowledge of the matter".

While it was known the bank was building its reserves, in response to more tight regulatory controls in the wake of 2023 bank failures, things ramped up "after the lender swelled beyond $100 billion in assets while acquiring parts of Signature Bank last year"

"...investors were rattled when it [NYCB] set aside $552 million for potential loan losses — more than 10 times what analysts anticipated — and slashed quarterly dividends by 70%"

In the following days, things escalated quickly!

In addition to beefing up their increased capital requirement reserves, the bank also said...

• "...debts 30 to 89 days past due had jumped 48% last quarter compared to the quarter before..."

• "The stock dropped 45% over the two days after its announcement, leading the broader KBW Regional Banking Index of 50 companies down 8.2%, its worst two-day performance since SVB imploded..."

These investors were likely caught off guard because after the lender acquired parts of Signature Bank last year, its assets quickly rose above the $100 billion threshold to more stringent regulatory oversight. More specifically, higher capital requirements.

If there is one thing investors don't like, it is uncertainty, as they lead to fears. If there is one thing investors don't like even more, is confirmation of their fears.

The acquisition of Signature Bank ultimately led to some investors running.

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February 5, 2024 Bloomberg article:
bloomberg.com/news/articles/…

2/

(Bloomberg) --

"New York Community Bancorp has been reaching out to investors for capital to finance a large portfolio of residential mortgages as pressures on the regional lender mount..."

"The company is seeking third-party capital for a portfolio of residential mortgages held under its Flagstar Bank unit. Among the options is a synthetic risk transfer backed by a portfolio of about $5 billion of home loans originated when interest rates were lower, said the people, who asked not to be identified discussing information that isn’t public. In a synthetic securitization, banks offload their exposure to loans by effectively transferring the risk of the assets to the buyer"

"NYCB also is exploring the sale of a roughly $1 billion portfolio of recreational-vehicle and marine loans..."

NYCB is having money trouble, and is considering offloading some of its exposure to [likely] unsuspecting buyers, by way of a synthetic securitization, as well as reaching out to current investors for additional capital.

Under the pressure and weight of interest rates and poor financial decisions, NYCB is getting desperate.

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February 7, 2024 Bloomberg article:
bloomberg.com/news/articles/…

Read 18 tweets

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