Read on Twitter
I may write a deeper thread on this... but in short, I seriously think that:
1. There was actually a severe systemic risk of the market collapsing last week.
2. We are unfairly placing *all* the blame on Robin Hood
1. There was actually a severe systemic risk of the market collapsing last week.
2. We are unfairly placing *all* the blame on Robin Hood
3. DTCC (a virtual monopoly) raised margin rates on certain symbols $GME $AMC ect... to by de facto halt trading on those securities to.
4. Melvin and other hedge funds were literally to big to fail, and DTCC was basically assuming ALL the risk of having to guarantee the trades
4. Melvin and other hedge funds were literally to big to fail, and DTCC was basically assuming ALL the risk of having to guarantee the trades
5. Robin hood thus scrambling for equity to have enough collateral/credit to cover the insane margins place on them by DTCC....
6. Also very possible, Ben Bernake, pulled strings in conjunction with Yellen and DTCC to ask Robin Hood to halt trading on these tickers so that Melvin and other hedgies could liquidate....
7. If DTCC had to assume all the risk (I.E GME TO 5K) of having to cover the Melvin Losses, it could have systemically collapsed the U.S securities market, or fed would have needed to immediately bail out (Similar to Lehman 2008 collapse)
8/ That's my current rough take, may delve further. Rabbit hole is deep. (very broad here, please feel free to elaborate... I did not check for mistakes at all)
Me last 24 hours researching this
