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McSqueezyTheCow Profile picture
@McSqueezyTheCow
Dec 22, 2022 • 9 tweets • 10 min read • Read on X
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In light of misinformation being spread regarding @CEOAdam and @AMCTheatres' expressed intent for a 1:10 reverse #split, here's a quick🧵to address the #FUD, & explain why AA is still playing 3D Chess, and why this can benefit #AMC. 1/
A reverse split is a "corporate action". 2/

investopedia.com/terms/c/corpor…
Some corporate actions require a CUSIP change. 3/

finra.org/filing-reporti…
NASDAQ/SEC let us know on the Company Event Notification Form that reverse splits require a CUSIP change. 4/

sec.gov/rules/sro/nasd…
IBKR lets us know that corporate actions can lead to spikes in borrow rates.

TLDR: Bad for shorts 5/

ibkr.info/article/2880
Investopedia lists many advantages to reverse spilts, but the only disadvantages are: perception of a stock from investors and reduction in supply of the stock.

TLDR: Bad for shorts 6/
investopedia.com/terms/r/revers…
A 2011 CNBC article titled “Reverse Stock Splits Are Usually Good for Investors: Report” lets us know that only 2 of the 14 stocks that reverse-split went down, & average gain was 62.55%

cnbc.com/id/42212417

TLDR: Good for AMC 7/
As it relates to voting, the registered owner of a share is entitled to this right. Shorts with #synthetic shares/#nakedshorts will need to locate shares and determine the owner and/or buy in bulk to meet the reqt's.

TLDR: Bad for shorts. 8/

investopedia.com/ask/answers/05…
@Xx_WiReD_xX @HangLoose1337 @EduardBrichuk @POTATO_INMYASS @BossBlunts1 @AMCbiggums @unusual_whales @cvpayne @Unbearabull2 @FNez_Blogger @ApeAverage @StonksBatman @elonmusk @AMC_Apee @SalMemeLord @StockRetail @CeccottiFrank @PinoyApe @Ryan__Rigg

Feel free to #share & bust #FUD

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More from @McSqueezyTheCow

McSqueezyTheCow Profile picture
Mar 20
Let's quickly look at how JPMorgan is responsible for the ballooning precious metals derivatives contracts.

A🧵...Image
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.

-----

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…Image
2/
January 2022, huh? I wonder what precious metals derivatives looked like before this change.
Read 14 tweets
McSqueezyTheCow Profile picture
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 🧵...

-----

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

-----

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…Image
2/
Read 16 tweets
McSqueezyTheCow Profile picture
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 🧵...

-----

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…Image
Image
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)

-----
New York Fed Effective Federal Funds Rate:


February 29, 2024 McSqueezyTheCow Tweet:
newyorkfed.org/markets/refere…
Image
3/
So, why the big fuss, Squeezy?? What's a few trillion between friends??
Read 13 tweets
McSqueezyTheCow Profile picture
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" = NYCBImage
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.

-----

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

-----

February 7, 2024 Bloomberg article:
bloomberg.com/news/articles/…Image
Image
Image
Read 18 tweets
McSqueezyTheCow Profile picture
Jan 28
JPMorgan reported net investment securities losses of $743 million in the fourth quarter of 2023. These losses were "primarily driven by sales of U.S. Treasuries and mortgage-backed securities".

The amount represents an 11% increase quarter-over quarter, from the $669 million of net investment securities lost in Q3 of 2023.

-----

JPMorgan 4Q23 Financial Results:


JPMorgan Third Quarter 2023 Results:


JPMorgan Fourth Quarter 2023 Results:
jpmorganchase.com/content/dam/jp…
jpmorganchase.com/content/dam/jp…
jpmorganchase.com/content/dam/jp…Image
"Investment securities are a category of securities tradable financial assets such as equities or fixed income instruments—that are purchased with the intention of holding them for investment".

JPMorgan also lets us know in their 2022 annual report that,

"Investment securities consist of debt securities that are classified as AFS or HTM".

-----

JPMorgan Form 10-K for the Fiscal Year Ended December 31, 2022:


Investopedia - Investment Securities:
jpmorganchase.com/content/dam/jp…
investopedia.com/terms/i/invest…Image
Image
The Kansas City Fed had this to say about HTM and AFS securities

“Investment securities are designated on the balance sheet as either ‘held to maturity’ (HTM) or ‘available for sale’ (AFS). As the name suggests, HTM securities are those the bank does not intend to sell but instead expects to hold until they fully mature. AFS securities, on the other hand, are securities that the bank intends to hold for some time but may sell before maturity.

HTM securities are reported at amortized cost on the balance sheet, and changes in their market value do not affect total assets or book equity. Instead, the reported value of HTM securities changes as their underlying discount or premium amortizes over time. AFS securities, on the other hand, are reported at market value. Changes in the market value of AFS securities—that is unrealized gains or losses—are reported in book equity as part of the accumulated other comprehensive income (AOCI)account. Therefore, as the market value of AFS securities rises (falls), assets and book equity also rise (fall)”.

-----

Kansas City Fed - The Implications of Unrealized Losses for Banks:
kansascityfed.org/Economic%20Rev…Image
Read 8 tweets

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