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…

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…

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…

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…

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…
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

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/…

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.

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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… "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".

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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…

Once again, I chose #DD over sleep. On the menu for today, #DTCC, #FICC, #Liquidity tests, #MBS, #Repo, and FICC's rainy day fund.

Here's a quick🧵to discuss. DTCC sent “Important Notices” yesterday of upcoming Liquidity Facility Tests for GSD Netting Members and MBS Clearing Members. Both liquidity tests—parts 1 and 2—will take place on the same day, April 24, 2023.

1/

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/

https://twitter.com/CEOAdam/status/1605926983145181184

A reverse split is a "corporate action". 2/

investopedia.com/terms/c/corpor…