ALERT Effective Tuesday, DTC to assign 100% haircut to all crypto investments

Knoxville's Joker

Knoxville's Joker

Has No Life - Lives on TB
kyrsyan said:
I don't think it's the whole decision. But I'm thinking that there were some surprises that motivated the policy to be firmed up and announced. Because it looks like a lot of big banks have been getting into crypto.
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In an attempt to stay relevant. The problem is that crypto is worse than derivatives as far as volatility is concerned. This may be a warning to divest and basically saying since you refuse to do so we will make you do so...
 
energy_wave

energy_wave

Has No Life - Lives on TB
This will hurt a lot of start up companies. One I'm invested in is using this mechanism to begin operations.
 
D

Donghe Surfer

Veteran Member
Aside from BTC, most cryptos could be considered illiquid. So, why would any investment bank/brokerage take them as collateral. Stupid.
 
stop tyranny

stop tyranny

Veteran Member
Thieves do not like competition.

Can not allow a private owned digital currency to exist when they are rolling out the new (non)federal reserve fiat digital currency.

Not that I would have faith in a digital currency whether it be federal reserve or any of the current private offerings. But the fed fiat digital dollars will be used as a weapon against those who resist the dismantling of the U.S.A. in order to pave the way for the nwo (one world dictatorship).
 
Knoxville's Joker

Knoxville's Joker

Has No Life - Lives on TB
stop tyranny said:
Thieves do not like competition.

Can not allow a private owned digital currency to exist when they are rolling out the new (non)federal reserve fiat digital currency.

Not that I would have faith in a digital currency whether it be federal reserve or any of the current private offerings. But the fed fiat digital dollars will be used as a weapon against those who resist the dismantling of the U.S.A. in order to pave the way for the nwo (one world dictatorship).
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I expect this to fall flat on its face at some point soon. All it takes are some gnarly hacks and a bunch of politicians to become penniless digitally to change minds...
 
West

West

Senior
A 100% haircut? Sounds extreme.

Does that mean someone is going to be left bald or naked?

Just ring: 3-6-2-4-3-6 and you could probably talk to a central banker about this.
 
LoupGarou

LoupGarou

Ancient Fuzzball
Might be related...

By Stan Szymanski


…’Regulators must equip themselves with tools such as “bail-in” bonds to deal quickly with a failed clearing house for stocks, bonds or derivatives without having to call on taxpayers for cash, the G20’s risk watchdog said on Thursday.’…(Reuters 4/25/24)


Why would a Clearing House fail? Because the assets as part of large trades that are being ‘cleared’ are contracts that for some reason (like a nuclear event or World War III) cannot be fulfilled and the contract fails.


The Depository Trust and Clearing Corporation (DTCC) is an American financial services company founded in 1999 that provides clearing and settlement services for the financial markets. This includes the settlement of large and largely unknown massive quantities of derivatives trades. Some estimates place the value of worldwide OTC derivatives at over $1 Quadrillion (>$1,000,000,000,000).


What are ‘Over The Counter’ derivatives?:


…’OTC-traded derivatives generally have a greater possibility of counterparty risk, which is the danger that one of the parties involved in the transaction might default. These contracts trade between two private parties and are unregulated. To hedge this risk, the investor could purchase a currency derivative to lock in a specific exchange rate. Derivatives that could be used to hedge this kind of risk include currency futures and currency swaps.’… (Investopedia)


When you see the word ‘currency’ when it comes to the United States just think US Treasury Bonds.


According to the Reuters article:


…’More recently, the United States has adopted rules to force more trades in the $26 trillion U.S. Treasury market through clearers.’…


Previously, these OTC Derivatives were settled between the parties who made the ‘bet’ between each other and were responsible for settling with each other privately.


So why would the US adopt rules to force more of the $26 Trillion of Treasury trades through the Clearing Houses like DTCC when they were not doing this before?


It is because they know what is coming, IMHO.


_____________________________


Please refer to our proviso at the end of the article regarding any reproduction of this writing (This especially means those who have modified my writing for their benefit and own financial gain as well as even plagaristically putting their name on my work) and consider a donation to Encouraging Angels today. We need your support—————————————-


The world as a whole is abandoning the US Dollar (Treasuries) as the world reserve currency. Countries of the world are sick and tired of having the currency of their country linked to the dollar and then seeing the same dollar weaponized through sanctions against anyone the U.S. doesn’t like anymore.


They are also sick of seeing the US able to literally print money out of thin air to fund their deficits and to get cheap assets in return for its (soon to be) worthless currency.


This is why countries are falling over themselves to join the BRICS nations. The BRICS nations are right now settling trade (like for oil) in the local currency of the trading partners, not the U.S. dollar. Soon the BRICS will bring forth a true competing world reserve currency based on commodities (most likely gold; perhaps silver, oil and other commodities as well).


So as the world abandons the US dollar (and therefore US Treasuries), the demand for US Bonds, Bills and Notes will dry up and fall.


If there were a large catastrophic event, like a nuclear exchange between nation states or a massive cyberattack on our infrastructure, it would precipitously accelerate a cataclysmic fall of the dollar-perhaps all the shouting will over in one trading day.


Triggered by this kind of event the price of US Treasury obligations will then fall lower than the drippings of Joey Brandon’s ice cream cone. The new settlement of these large derivatives trades and the US Treasury market will meet in the house of DTCC.


…’The Depository Trust & Clearing Corporation is the biggest bank in the world that you have probably never heard it. They happen to be the registered owners of 99% of all paper (stocks, bonds, securities, etc.). Scary, but true. And they have a perfectly good reason for it – with electronic trading, it is impossible to make timely changes to registered ownership of the paper.’…’The banks and brokers are merely custodians for their clients. By federal law (SEC), they cannot hold any assets in the customer’s name. The assets must be held in the name of DTC’s holding company, CEDE & Co. That’s how DTC has more than $19 trillion dollars of assets in trust… or is it really in “trust” if the private Federal Reserve System is technically holding it in their “unknown” entity’s name?…Obviously, if stock and bond certificates you’ve purchased aren’t in your name, then the “holder” (the Federal Reserve System) could theoretically refuse to surrender them back to you under a “national emergency” according to the Trading with the Enemy Act (as amended).’… (Seeking Alpha 10/2/08)


Here is where this affects you and your money.


The stock that you -think- you own is registered in the name of CEDE & Co. (DTCC’s holding company). They are the REGISTERED OWNER. The only way you can be a REGISTERED OWNER is to actually have a PHYSICAL CERTIFICATE issued with your name PHYSICALLY INSCRIBED on the certificate. I called a broker about a year ago and the cost for a physical certificate was $500(!) Absolutely ridiculous-it used to be free and took about six weeks (that was two decades ago before my daughter got sick when I was in the business…).


Regarding your money (assets) at a brokerage house (the stocks/bonds etc. that you -think- you own)-You are not a registered owner of those securities…you are a BENEFICIAL OWNER.


What is a BENEFICIAL OWNER?


…’BENEFICIAL OWNER- A Beneficial Owner is nothing more than a beneficiary, “One who is entitled to the benefit of a contract”- A Dictionary of Law, 1893. All book-entry stocks and bonds you purchase make you the beneficial owner, not the registered holder. The owner of a book-entry stock or bond is the entity or name that it is registered under.’…(Seeking Alpha 10/2/08)


So if we happen to on the precipice of World War, Nuclear War, Cyber War and Invasion and push comes to shove-what do you think will happen to the assets that are -not- in your name? Will they be given back to you as the ‘beneficial owner’ or will the ‘registered owner (CEDE and Co/DTCC)’ do what is best for them which will be to settle the trades of the huge derivatives positions that are now underwater because of a collapse in the US Treasury market?


I think that the answer is quite obvious, IMHO but here is an estimation of what -could- happen:


There could be a nuclear exchange that would immediately close all financial markets. The trades that pose the biggest problems are the large OTC derivatives trades that could/would cause systemic collapse of the financial system.


The Treasury market would enter a collapse since no one would trust the ability of the US to pay its bills as no one wants US Treasuries.


In an attempt to save the western financial system, DTCC as REGISTERED OWNERS of 99% of all securities (stocks, bonds, paper etc…) use the necessary paper assets of the BENEFICIAL OWNERS (you and me) to clear the imbalances in the large derivatives trades. This is when the ‘Bail-In’ bonds would be issued. This might ‘save’ the system at the complete expense of every (alleged) asset owning American. It would also bring on the ‘Greatest Depression’ ever seen by mankind. As Klaus Schwab has famously said: ‘You will own nothing and be happy’. I just don’t know about the happy part as within days roving bands of marauders would descend on you and yours to take whatever you have left as ‘Mad Max’ ensues…


What can you do (this is -not- financial advice-consult your financial professional)? Apparently/allegedly, you can still get a stock certificate for stocks…at a cost. About bonds you need to contact your broker..treasuries look like they are book entry only (electronic).


Consider owning physical things like food, water (and filtration/storage), shelter (a place in the mountains?), energy and protection. Consider PHYSICAL (not Wall Street paper) precious metals while they can still be had. Anything you do or consider comes with risks including market risks and risks of complete loss in value or householding/storage risks of any physical asset.


It is quite scary to consider the ramifications of who is actually in control of your life savings. Pray about how to move forward. The ‘powers that be’ are moving forward with their plans and in my opinion, it probably doesn’t include you.


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All rights reserved.


Stan Szymanski (or Encouraging Angels) is not a medical doctor. This is not medical advice. In all matters pertaining to the health and care of a human being consult a medical doctor. This is not legal, financial or personal advice. Consult appropriate professionals in those fields for that type of advice
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Hfcomms

Hfcomms

EN66iq
Full article referenced in post #55....published same time as DTCC 'haircut' decision


Regulators told to be ready to handle failed clearing houses​

By Huw Jones
April 25, 20244:26 AM EDTUpdated 4 days ago

LONDON, April 25 (Reuters) - Regulators must equip themselves with tools such as "bail-in" bonds to deal quickly with a failed clearing house for stocks, bonds or derivatives without having to call on taxpayers for cash, the G20's risk watchdog said on Thursday.

After the global financial crisis of 2007-09, regulators mandated clearing for a wider range of derivatives, meaning they must pass through a clearer backed by a default fund to ensure completion of trades.

More recently, the United States has adopted rules to force more trades in the $26 trillion U.S. Treasury market through clearers.

As a result of such changes, some clearers have become vital to financial systems in more than one jurisdiction, meaning their failure could damage financial stability unless they can be stabilised or "resolved", meaning closed down, in an orderly way.

The Financial Stability Board (FSB) said its new standard, which builds on previous guidance, requires that adequate liquidity, loss-absorbing, and recapitalisation resources and tools are available to maintain the continuity of a clearer's critical functions, and mitigate adverse effects on financial stability should a shutdown become necessary.

It sets out seven resources and tools that regulators are required to pick from, such as "bail-in" bonds issued by clearers that can be written down to plug losses, resolution funds, cash calls during resolution, and equity in a first-loss position in resolution.

Regulators will have to state publicly which tools they have selected. Laws could need changing or introducing in some countries to give regulators access to such tools.

"Temporary public funding for liquidity ... should be relied on only as a last resort," the FSB said.

Exchanges such as LSEG, ICE, CME and Deutsche Boerse all operate major clearing houses that handle trades totalling trillions of dollars.

The G20 economies commit to applying regulatory recommendations from the FSB, and the watchdog said it would monitor implementation and publish its findings.


 
Dobbin

Dobbin

Faithful Steed
Knoxville's Joker said:
It would also remove central bank power. But I also warn folks crypto is the modern equivalent of stocks and bonds of the 1920/30s...
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Rent out high rise hotel rooms - by the hour?

"Does the window open for ventilation?"

"Sorry, all we have are first floor suites."

Dobbin
 
J

Johnny Twoguns

Senior Member
phloydius said:
In theory, yes. In practice, I doubt it. Nothing I've seen indicates how much crypto is being used by the banking system as collateral, but since the only ETF they could use is brand new and there are only a few crypto-adjacent EFTs (like ticker ETHE) I would think it is unlikely that there is very much.

You are correct in that the client bank (like Wells Fargo as an example) will need to replace any crypto assets used for collateral with a different collateral (most likely Treasury Bills)... unless they are not currently using that full line of credit. In which case, the line of credit would simply be reduced. Another option (in the knock-on-effects category) is if they have $X worth of crypto as collateral, and the line of credit is reduced by $X, then instead of replacing $X worth of collateral, they could sell $X value worth of other assets (like corporate or government bonds) that are on margin from the loan, effectively bringing the balance in-line.
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Banks and Central Banks are loading up on gold.
Even some US States are loading up on gold.
 
West

West

Senior
Muse..

PMs have held tight for the most part. I find this bullish at these current fiat prices.

Could of, would of, should of....
 
Hacker

Hacker

Computer Hacking Pirate
LoupGarou said:
Might be related...
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Just some thoughts (please attend, as this is possibly complicated)...

One of the most toxic aspects of the Dollar is that of attaching a lien to everything purchased via Dollars. This means that the Fed 'owns' everything purchased by the Dollar (since the Dollar is a promissory note, issued by the Fed). I believe this structure is similar to the way a deed / warranty deed (for real estate) is presently handled in this country, and for the same reason (attaching a lien).

I'm guessing securities are now handled in a similar manner, whereby you (the investor) retain a beneficial ownership (as opposed to an actual ownership).

Now, since BTC is mined from a computer, it does not have the toxic properties of a central bank currency (such as Fed-printed), is not a promissory note, and is accepted as money by free people.

Thus, it *could be* that BTC could be used to purchase securities without conveying a lien, which means that anything purchased via BTC would NOT obtain (attach) a lien. Thus, this 'haircut' might be a means of preserving the Fed's ownership of their own lien in all securities.

Does this make any sense to y'all?
 
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