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welcome back to the channel everyone today i want to talk about how michael bury tried to warn us of the current market crash and how the market will be setting new lows over the next week and how the market will be crashing over the next few weeks so stay tuned and let's make some money and now i want to dive straight in with the key information so you may remember back before christmas michael bury tried to warn us of the coming market crash he tweeted yesterday saying at least i tried michael brewer is obviously famous from the film the big short where he profited greatly from the 2008 financial crash and tried to warn millions and millions about the impending crash he was rejected from all of the large news stations and was even investigated by the fbi in case he had some form of insider information and back in 2021 he tried to warn us of the coming market crash over the last few months the market has been falling but back in march and the first few weeks of april the market took a swift u-turn and looked like it was starting to recover but obviously over the last week the market has been falling again and is likely to set new lows over the next week and the next few weeks as well and as suburban drone points out some stocks like google are already setting these new lows breaking through those previous january february and march lows we can see here that google fell through this area of support around 2 500 per share and i set a new subscribe also set new lows we've seen stocks like coinbase paypal and even amd as well all setting new recent lows michael brewery now thinks that it's too late to warn people any longer of the coming market crash which is likely to take the s p 500 through these previous lows and could potentially even fall below the pre-pandemic error i was doing some research looking at the pullbacks from all of the major recessions and major depressions through history which seemed to range between 30 and 50 percent in each individual circumstance if the s p 500 falls by 30 from the all-time high around 480 that puts the s p 500 somewhere around 340 to 350 per share therefore we could see the s p 500 falling below these recent lows all the way down to this blue line somewhere around those pre-pandemic levels now you will have actually noticed that some stocks like netflix and facebook have already fallen far below their pre-pandemic levels i don't think it will be long until the s p 500 sets those new lows and continues to fall potentially past those pre-pandemic levels as well charlie biello pointed out on twitter the 2022 returns for some of the largest stocks in the market obviously so far this year twitter is actually doing well up 13 for this year so far based on the elon musk takeover announcement but obviously many stocks aren't faring quite as well apple is down 10 amazon down 13 google down 17 microsoft down 18 and many others we're also seeing some catastrophic losses like paypal down 54 netflix down 64 and shopify down a whopping 67 and now i don't think it'll be long until these numbers are made to look like small fry with many many stocks down 60 70 and 80 percent potentially even more and also david rosenberg tweeted saying just remember before black monday on october 19 1987 they were calling the five percent plunge the prior session black friday and the promoters were calling the low therefore we're going to see many of these major news outlets claiming that the market crashes finished and that it can't possibly get any worse but we're likely to see much much more damage before the market starts to recover cnbc posted an article saying the dow plunges more than 900 points for its worst day since 2020 and it falls for a fourth straight week the article says that stocks plunged on friday with the dow jones industrial average suffering its worst one-day loss since the throes of the pandemic some big-ticket losses put the dow down 1.9 for the week its fourth straight weekly decline and its ninth losing week of the last 11.
and importantly investors appear to be moving away from the tina which is there is no alternative but to invest in stocks the head of investment management at commonwealth financial network said this is the second straight week of significant outflows from equity mutual funds and days like today are unlikely to change the sentiment moving forward i think this is really really important because it means that massive massive institutions are withdrawing massive amounts of cash from equity mutual funds okay withdrawing cash from the s p 500 obviously going to a more cash based investment strategy preparing for a market crash but it's not only the stock market that's looking a little ropey it's also the housing market as well wells fargo has just confirmed mortgage staff layoffs for potentially up to 500 staff it said wells fargo confirmed on friday that it's laying off an undisclosed number of home lending employees due to mortgage market conditions one week after reporting a major decline in origination volume so it looks like the mortgage lending market is having a lot of trouble lots of different mortgage lenders are reporting trouble actually securing mortgages for their clients therefore mortgage numbers are down and therefore wells fargo is letting go of tons and tons of home lending employees now if big banks are tightening lending conditions it can only mean that a housing market crash is on the horizon and obviously if a housing market crash is on the horizon it will most definitely end up bleeding over into the stock market and causing a stock market crash now i do want to actually try and prepare you for this stock market crash and also for the amc mother of all short squeezes this post on reddit says that when the amc mother of all short squeezes happens make sure to protect yourself and your family move over your money into tangible assets or some type of crypto they said remember that fdic insurance is only 250 000 per bank and importantly enough it says here the dodd-frank act the law that states that a u.s bank may take its depositors funds i.e your checking account your savings account your cds your ira and your 401k accounts a u.s bank may take its depositors funds and use those funds when necessary to keep itself the bank of flow obviously the stock market does crash and if the housing market does crash as well many banks are going to run into financial difficulties and likely experience liquidity problems and therefore leaving all of your cash tied up into one singular bank account may not be the best idea especially if these banks can use its depositors funds to try and keep the bank of flow therefore i think it's important to distribute your newfound wealth across multiple different bank accounts savings accounts checking accounts and also different forms of investment potentially like gold and silver or property or crypto as well now guys many of you may not have a lot of confidence in the stock market at the moment there's all of this market manipulation and market fraud that seems to be going entirely unpunished and that's why i personally also like to invest in cryptocurrency especially now that bitcoin is trending upwards i personally like to use blockfy and right now if you sign up with blockfy using the link in the description below you can currently get up to 250 dollars in free bitcoin with boxify you can also purchase many other cryptos and not just bitcoin and that's why more than 500 000 people and 350 institutions globally use block fight to manage over 10 billion dollars in assets block fi is also an entirely free platform and requires no minimum balance block 4 also offers a rewards credit card with an introductory rate of 3.5 percent cashback on your purchases also paid in crypto so you can continue to accumulate more and more there's also no annual fee and no foreign transaction fee and the card is currently available in the united states so guys be sure to send it to block fire and make your first deposit using the link in the description below to earn up to 250 dollars in free bitcoin and i also wanted to discuss the new nscc 202203 ruling amc bighams tweeted saying good morning apes the new filing double 03 is like a reverse repo for short sellers he said i break it down on this video very easily for everyone to understand importantly he says we need to comment on the proposal and say that it's not good for retail investors he said don't swear sound professional i think it's also important to note that i think this ruling is much more than just a reverse repo for short sellers i think this ruling is more of an sft for sfts now you may say tom an sft of an sft what even is a singular sft so i want to cast your minds back to the older rulings 801 and 0.10 that originally created these sfts or securities financing transactions these rules are created to help avoid market crash and fire sale scenario when a hedge fund is being liquidated instead of being forced to sell off their assets they can instead lend out these assets to other hedge funds in return for cash collateral and they can use that cash to cover short positions this is obviously going to be incredibly important for funds like melvin capital instead of selling off their long positions they can exchange these long positions for cash and use that cash to cover their amc and gamestop shorts that means that obviously we can get paid and sell our amc and gamestop shares for the prices that we set but we can also potentially avoid a fire sale or market crash scenario but this new ruling double o3 effectively creates a securities financing transaction of that securities financing transaction i think this really just goes to show just how worried the nscc the dtcc and the sec are of a coming market crash the ruling says that in addition to creating capital efficiency opportunities for market participants the nscc believes that broadening the scope of central clearing at nscc to sfts would also reduce the potential for market disruption from fire sales in the case of securities lending transactions the primary risk of fire sales relates to the reinvestment of cash collateral by institutional firms that are the lenders in securities lending transactions those institutional firms will typically reinvest the cash collateral they receive from the borrower into other securities so obviously when these hedge funds have to exchange their long positions for cash they are going to use this cash in some way maybe they'll use that cash to buy more assets to potentially generate a larger return and dig themself out of their liquidity problem or maybe they'll use that cash to cover their existing short positions now in this circumstance you've obviously got the lender that is lending the securities for cash you've also got the borrower that is giving cash to receive these additional securities and it says if the borrower of the securities thereafter defaults the institutional firm lenders generally need to quickly liquidate the new securities they purchased representing the reinvestment in order to raise cash to purchase the originally lent securities aka when the lender lends those loan positions in exchange for cash they're then going to buy some more assets but if the borrower originally defaults they'll need to quickly sell off those new assets to get their cash back to repurchase their original lend securities and obviously it says a substantial number of disconnected and competing liquidations by multiple lenders can create fire sale conditions for the securities being liquidated which can harm not only the institutional firm lenders by potentially lowering the amount of cash they can raise in the sale of such securities but also create market losses for all holders of such securities so they effectively need to create a second sft the original sft that went wrong because the borrower ended up being liquidated so by trying to avoid a market crash scenario by lending out their long positions they may potentially end up in another market crash scenario when they have to sell off their new securities purchased using the cash that they got from lending out their original securities and on the other side of the fence it says moreover if an institutional firm lender should default and fail to return the cash collateral back to its borrowers the borrowers would typically be looking to liquidate the borrowed securities in order to make themselves whole for the cash collateral they delivered to the institutional firm lender okay if some borrowers borrowed these securities and gave the lender cash if the lender then lost that cash they would obviously want to sell the securities to get their cash back obviously by selling off all these new securities they again create a fire sale scenario and therefore you need an sft of an sft and that's why the nscc are saying that in this circumstance the nfcc and the dtcc would end up getting involved and backstopping these positions but what biggums is getting at is this part here in the new ruling it says liquidity risk may also arise if in the context of a stressed market scenario borrowers or lenders concerned about their counterparty's credit worthiness seek to unwind their securities lending transactions and obtain the return of their cash collateral or securities he says this occurred to a certain extent in 2008 where borrowers began demanding to return borrowed securities in exchange for the cash collateral the borrowers had posted to institutional firm lenders aka when blackrock requests that citadel and melvin capital return all of those lent out amc and gamestop shares and it says that these runs may require institutional firm lenders to quickly sell off assets to return and cover those shorted positions thereby potentially creating fire sale conditions for those assets that they had to sell off to cover their shorts so this ruling is saying that the nscc may backstop this scenario and therefore request that blackrock don't actually recall their lent out shares and suggest that the nfcc will cover any losses this potentially means that blackrock won't end up recalling these lent out shares from citadel and from melvin capital which is exactly obviously what we want and this is why biggums is suggesting that obviously this ruling is not good for retail and we need to comment on their proposal to let them know that we don't agree obviously this ruling so far has only been proposed and hasn't yet been set in motion and placed into law therefore while the comment period is open we should comment and let them know our thoughts so guys be sure to let me know down in the comments below what you think about michael brewery warning us about the coming market crash and also what you think about this new ruling double o3 and as always guys if you enjoyed this video be sure to check out some of my others alternatively subscribe to the channel and ding that notification bell because that way you'll be alerted when i upload a new video cheers
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