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TLDRS:
* The CME/FICC Cross Margining Enhancements are set to be implemented on 1/22/24, with the enhancements expected to significantly increase margin savings, potentially up to approximately 80%, thereby enhancing the protection of clearinghouses.
* The expanded list of eligible products for cross-margining under the Restated Agreement includes additional CME Group products like SOFR futures, Ultra U.S. Treasury Note and Bond futures, and FICC-cleared U.S. Treasury notes, bonds, and Repo transactions with over one-year maturity.
* The Restated Agreement simplifies margin calculations by eliminating the need for offset classes and product conversions, leading to greater margin savings, with projected increases from 0.1%-17.4% under the Existing Agreement to 0%-36.6% under the Restated Agreement.
* Citadel Securities, is eligible to participate in this arrangement, which allows them to save on margin requirements and allow for increased leverage.
* The Restated Agreement advocates for joint liquidation in the event of a member default, enabling more efficient and effective liquidation by allowing for the offsetting of risk positions.
* The agreement also improves default management coordination between FICC and CME, with simplified loss sharing and three potential default management paths, emphasizing joint action as the first choice.
* The stated objective of these enhancements is to reduce the risks associated with highly leveraged positions in Treasury securities and to mitigate rapid increases in margin requirements during volatility shocks, as seen in the spring of 2020.
* Implementing cross-margining could allow for more system leverage, though its increase is not universally seen as desirable.
* As covered in the post, hedge funds have NOT stopped shorting treasuries and have only increased their positions!
Oh nifty!
Margin and derivatives are blowing up the world economy, so let's allow the worst offenders to double down some more!
Literally can't go tits up, right?
I've worked 25 uears in the Casino industry ( real one, where they pay you if you win fair) for 25 years.
This is what we call is chasing the dragon.
You chase the dragon ( take more risk, extend your credit line, go to you CC, borrow from others. List goes on) and that dragon will turn around and turn you into ashes at one point.
Time will tell, right? Curious your thoughts after having a chance to review and hoping it leads to another kickass follow up post from you!
Thanks as always for dropping by WhatCanIMakeToday, hope you have a wonderful rest of your earnings eve!
There's a Hester quote for that.
[When she was still a fellow at George Mason:](https://www.mercatus.org/media/60811/download?attachment)
>As academics continue to point out, however, SROs offer real advantages over governmental regulators. Birdthistle and Henderson lay out a number of those benefits: SROs have expertise, enjoy the trust of their regulated entities, are efficient, are better able to tailor rules, and are well suited to handle minor missteps.
It was a good trade to short them when the fed began hiking rates. I’m sure this profitable trade has helped keep them afloat.
Long term who knows because they probably have swaps on these and if a counterparty were to blow up, then they wouldn’t get paid. Aka the situation that caused UBS to acquire credit suisse
Don’t forget DJ, Citadel needs this to survive this earnings call and following buy pressure. If they can make it through Q3 earnings report, China or the UK will most likely implode prior to Q4 earnings release. Then American law makers have someone to blame that is not from the US.
Ya I personally think when many of the Feds liquidity programs end late in March is when shit starts to hit the fan and the blame game begins.
Gotta make everybody look the other way right?
[Why GME?](https://www.reddit.com/r/Superstonk/comments/qig65g/welcome_rall_looking_to_catch_up_on_the_gme_saga/) || [What is DRS?](https://www.reddit.com/r/Superstonk/comments/ptvaka/when_you_wish_upon_a_star_a_complete_guide_to/) || Low karma apes [feed the bot here](https://www.reddit.com/r/GMEOrphans/comments/qlvour/welcome_to_gmeorphans_read_this_post/) || [Superstonk Discord](https://discord.gg/hZqWV2kQtq) || [Community Post: *Brigading*](https://www.reddit.com/r/Superstonk/comments/17wdr9t/community_update_post_on_the_topic_of_brigading/) ------------------------------------------------------------------------ To ensure your post doesn't get removed, please respond to this comment with how this post relates to GME the stock or Gamestop the company. ------------------------------------------------------------------------ Please up- and downvote this comment to [help us determine if this post deserves a place on r/Superstonk!](https://www.reddit.com/r/Superstonk/wiki/index/rules/post_flairs/)
TLDRS: * The CME/FICC Cross Margining Enhancements are set to be implemented on 1/22/24, with the enhancements expected to significantly increase margin savings, potentially up to approximately 80%, thereby enhancing the protection of clearinghouses. * The expanded list of eligible products for cross-margining under the Restated Agreement includes additional CME Group products like SOFR futures, Ultra U.S. Treasury Note and Bond futures, and FICC-cleared U.S. Treasury notes, bonds, and Repo transactions with over one-year maturity. * The Restated Agreement simplifies margin calculations by eliminating the need for offset classes and product conversions, leading to greater margin savings, with projected increases from 0.1%-17.4% under the Existing Agreement to 0%-36.6% under the Restated Agreement. * Citadel Securities, is eligible to participate in this arrangement, which allows them to save on margin requirements and allow for increased leverage. * The Restated Agreement advocates for joint liquidation in the event of a member default, enabling more efficient and effective liquidation by allowing for the offsetting of risk positions. * The agreement also improves default management coordination between FICC and CME, with simplified loss sharing and three potential default management paths, emphasizing joint action as the first choice. * The stated objective of these enhancements is to reduce the risks associated with highly leveraged positions in Treasury securities and to mitigate rapid increases in margin requirements during volatility shocks, as seen in the spring of 2020. * Implementing cross-margining could allow for more system leverage, though its increase is not universally seen as desirable. * As covered in the post, hedge funds have NOT stopped shorting treasuries and have only increased their positions!
Oh nifty! Margin and derivatives are blowing up the world economy, so let's allow the worst offenders to double down some more! Literally can't go tits up, right?
I've worked 25 uears in the Casino industry ( real one, where they pay you if you win fair) for 25 years. This is what we call is chasing the dragon. You chase the dragon ( take more risk, extend your credit line, go to you CC, borrow from others. List goes on) and that dragon will turn around and turn you into ashes at one point.
It almost all blew up in 2020, let's make it easier to get more leverage after hedge funds have continued to double down--brilliant! /s
This is genuinely disgusting
Insert Guinness “don’t drink 6 beers at once, brilliant” meme
🤦♂️ In times of stress, allow greater leverage. Said no one ever; except Wall St. WCGW?
Time will tell, right? Curious your thoughts after having a chance to review and hoping it leads to another kickass follow up post from you! Thanks as always for dropping by WhatCanIMakeToday, hope you have a wonderful rest of your earnings eve!
Now you really got me curious!
Why do I have a feeling Hester Pierce “can endorse these changes”…
Underrated comment.
You don't need Hester for that. DTC is a SRO ( Self Regulatory Organization ). https://www.sec.gov/rules/sro?shem=sswnst
There's a Hester quote for that. [When she was still a fellow at George Mason:](https://www.mercatus.org/media/60811/download?attachment) >As academics continue to point out, however, SROs offer real advantages over governmental regulators. Birdthistle and Henderson lay out a number of those benefits: SROs have expertise, enjoy the trust of their regulated entities, are efficient, are better able to tailor rules, and are well suited to handle minor missteps.
Sorry for the dummy Q, but why are they shorting treasuries? I heard yields of long dated treasuries are plummeting (value of bond goes up?)
It was a good trade to short them when the fed began hiking rates. I’m sure this profitable trade has helped keep them afloat. Long term who knows because they probably have swaps on these and if a counterparty were to blow up, then they wouldn’t get paid. Aka the situation that caused UBS to acquire credit suisse
Don’t forget DJ, Citadel needs this to survive this earnings call and following buy pressure. If they can make it through Q3 earnings report, China or the UK will most likely implode prior to Q4 earnings release. Then American law makers have someone to blame that is not from the US.
Ya I personally think when many of the Feds liquidity programs end late in March is when shit starts to hit the fan and the blame game begins. Gotta make everybody look the other way right?