/biz/ - Business & Finance

[Anonymous No.57897294]

https://youtube.com/watch?v=dk3AVceraTI

Someone posted this video a couple months ago and I’ve been trying to deboonk it since. His main thesis seems to be that banks will use your funds to collateralize derivatives transactions which ultimately up the ladder the CCP is the highest entity that coalesces this collateral, and that they reserve the right to demand more collateral from the banks and haircut or negate any profits the banks might receive from that transaction, so in a collapse scenario you might think you’re raking in the cash but actually you own nothing, or realistically banks who have collateralized your unencumbered funds with hedged trades to collect a free spread will find their hedges reduced to nothing, further putting the pinch on everything.

Some things to consider for me are 1, his basis of this seems to be Lehman Vs. JP Morgan in 2008 in which the default of Lehman caused JP Morgan to liquidate in the money CDS contracts and redistribute the collateral on an accelerated payment schedule to the counterparty with priority over Lehman, despite Lehman being in the money. This does not seem to jive with the “great takings” theory that it means the CCP’s can scoop up everyone’s assets legally, it seems you can still try the CCP in court if you do not have a qualifying early termination or advancement clause trigger from your contract. 2, this already seems to be the suggested “end of waterfall” default resource, per ISDA they believe all clearing members with net VM gains should be liable to have those gains clawed back. https://www.isda.org/a/jTDDE/ccp-loss-allocation-waterfall-0807.pdf

So really, I’m not entirely convinced if a CCP were to start on the default waterfall that they have any legal recourse to claw back VM actually.

Thoughts appreciated

[Anonymous No.57897350]

Certainly there might be provisions to becoming a clearing member that allow the CCP legally to haircut your contacts is something to keep in mind. But I also presumed the basis of “the great taking” to be around the CCP’s going default as well. Also I guess an oversight from my OP is that those were bilateral contracts under a netting agreement, cleared contracts will not have such a netting agreement like an ISDA.

[Anonymous No.57897487]

Ok maybe one last point is that it would be implied if the CCP defaulted that you would get a full haircut on your contracts anyway, so it’s better to have a partial haircut ect. But you should be able to have a pro-rata claim on the full value of the contract in bankruptcy of the CCP was what I understood

[Anonymous No.57898796]

>>57897294
sure but the vast majority of my wealth is tied up in self custodial assets.
anyone whose isn't and is under the age of 40 is retarded and not paying attention
thats 50% their fault.

[Anonymous No.57900375]

>>57898796
You’re an outlier though. Most people are solely dependent on collateral striping banks, their job is dependent on it, their assets are tied up in it, ect.

[Anonymous No.57900399]

>>57898796
Also anyone with real money isn’t self custody, look at the ETF’s Coinbase is their custodian because if Coinbase loses the crypto they have an insurance claim on it. You’re both an outlier and not the future, complex crypto storage and custody solutions that can be claimed in court if misappropriated or lost are the future.

[Anonymous No.57900875]

I keep 90% of my assets in BTC on a cold wallet, as does everyone with a brain

[Anonymous No.57900921]

>>57897294
I did this one as an audiobook after seeing that same thread.
https://youtu.be/b4-IC2rQ-gE

[Anonymous No.57900959]

look what the gamestop community has been paying attention to in regards to this-ish. a new rule that will reduce margin requirements and lets the fed pick who goes under and who doesnt when shtf. say what you want about the gamestop pplz, but the amount of info they've uncovered on how the market actually works has been astounding and fucking scary.

https://www.reddit.com/r/Superstonk/comments/1aocvao/crafting_comments_for_srocc2024001_a_simple_easy/?utm_source=share&utm_medium=web2x&context=3
The stock market is full of an unknown amount of counterfeit shares created by illegal naked short selling
https://x.com/Cancelcloco/status/1745253518876004748

[Anonymous No.57900982]

video explaining the new rule as well.

https://www.tiktok.com/@cancelthisclothingco/video/7330780639349853483?_r=1&_t=8jY8M9ZCfx1&social_sharing=1

[blastbro !!YMNmFoXet3u No.57901027]

Good thread

[Anonymous No.57901059]

>CCP
Chinese Communist Party?

[Anonymous No.57901712]

when will they rug is the question? rrp keeps sinking nd btfp is soon to expire. i doubt the fed will let banks fail. theyll be another lifeline.

[Anonymous No.57901832]

>>57900959
>gme baggies
>uncovered how the market actually works
Kek. You think like a woman. There is no great reset, no great taking, no heckin MOAS, your enslavement is not in the future, it's in the past, but you filthy wagie slaveminds refuse to see the world as-is instead inventing narrative explanations to provide storyline to the world

[Anonymous No.57902118]

>>57901832
Yeh and bank bailouts never happened right?

[Anonymous No.57902375]

The author suggests that peoples houses will be taken if there is a mortgage on it, but in practical terms i can't see that happening on a larger scale. The very agents supposed to enforce such a pressure would themselves be subjected to the same effects.
However they can surely just directly take IOUs and there is nothing stopping them.