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📚 Due Diligence

Financial Stability Board releases report

Financial Stability Board releases report on Financial Stability Implications of Multifunction Crypto-asset Intermediaries. Tokens (remember all those GME crypto tokens?) called out as interconnected-contagion risk!

Wut Mean?: * MCIs generate revenue through proprietary trading and investments, including in self-issued crypto-assets. * They often operate from offshore financial centers, are privately owned, and lack transparency in corporate structure, financial accounts, and product/service descriptions. * In some cases, this opacity seems intentional, hindering understanding of their activities and risks.
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The Nonbank Shadow of Banks

New York Fed economists conclusion: "the evolution of banks and nonbanks is highly intertwined."

The Nonbank Shadow of Banks Nicola Cetorelli and Saketh Prazad Source: https://libertystreeteconomics.newyorkfed.org/2023/11/the-nonbank-shadow-of-banks/ Highlights: * "In this post, we look at the joint evolution of banks—referred to as depository institutions from here on—and nonbanks inside the organizational structure of bank holding companies (BHCs)." * "Our
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Too Damn High!

Bank Term Funding Program usage reported at $109.068B, above $100B for the 21st consecutive week! An over reliance on central bank funding that is growing faster than the rate of inflation, BTFP is a moral hazard!

Hello, happy Friday and beginning to the weekend! Borrowing from the Bank Term Funding Program hit a NEW all time high this week ($109.068 billion)--the 21st consecutive week above $100 billion! What we are reviewing: 1. Bank Term Funding Program (BTFP) 2. Discount Window/Primary Credit 3. "Other
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BGC Financial, L.P. (Respondent)

FINRA 'discipline' Alert! From December 2014 through January 2021, BGC Financial, L.P. could NOT effectively detect spoofing and layering on ~7,765,000 transactions. Penalty? Censure, $200,000 fine, with no admission of wrong doing.

Hello and happy Thursday, I hope everyone is enjoying a great week on this Friday eve! I would like to share some more FINRA 'discipline' with y'all, this time it's BGC Financial, L.P.! As these releases convey a ton of information, I hope this format makes sense: * I am
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Hedgies r Fuk: "We also note that, since the data ending date of May 9th, 2023, when this note was drafted, hedge fund short futures positions have continued to rise"

Hedgies r Fuk: "We also note that, since the data ending date of May 9th, 2023, when this note was drafted, hedge fund short futures positions have continued to rise"

"Should these positions represent basis trades, sustained large exposures by hedge funds present a financial stability vulnerability" Source: https://www.federalreserve.gov/econres/notes/feds-notes/recent-developments-in-hedge-funds-treasury-futures-and-repo-positions-20230830.html During 2018 and 2019, when hedge fund cash-futures basis trades positions were large, sponsored repo borrowing likely constituted a small percentage of total
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Yale University: 66.1% of retail investors and 56.03% of institutional investors believe the probability of a catastrophic stock market crash in the U. S., like that of October 28, 1929 or October 19, 1987, in the next six months is above 10%.

Yale University: 66.1% of retail investors and 56.03% of institutional investors believe the probability of a catastrophic stock market crash in the U. S., like that of October 28, 1929 or October 19, 1987, in the next six months is above 10%.

https://som.yale.edu/centers/international-center-for-finance/data/stock-market-confidence-indices/united-states Wut mean?: I wonder why folks may be feeling this way? Oh yeah... * Liquidity Fairy Alert! It just keeps going up... Bank Term Funding Program usage above $100B for the 12th consecutive week ($107.386B vs $107.242B 8/17). An
dismal-jellyfish 📚 Due Diligence