“The GameStop ShortSqueeze is Much Bigger than you realize” by Max Marmer [REPOST]

I think I speak for a large number of people when I say that I only read a few of the newsletter emails that I receive in my inbox every day. Most of the ones I don’t go straight to the trash.

Today my attention was caught by Max Marmer and his amazing Sunday review of the previous week. I personally really appreciated his points and the whole detailed analysis. Great work Max! 💪

I thought y’all would appreciate it if I shared it, so here we go:

THIS ARTICLE WAS ORIGINALLY POSTED BY Max Marmer IN HIS NEWSLETTER AS WELL AS IN HIS Multi Dimensional Money & Investing Facebook group.

Hi Federico,

If you have been tuned into the news this week, you have likely seen the rabble-rousing headlines about retail traders on Reddit and Wall Street Bets organizing to inflict maximum pain on a few Wall Street Hedge Funds — causing them to lose billions of dollars in the process via a short squeeze of a stock called GameStop ($GME).

Many veteran market analysts and traders called last week one of the most entertaining of their entire career.

The short squeeze organized by these small retail traders exerted so much surprise pressure on the financial system that many brokerages had to temporarily restrict trading of GameStop (and other short squeezed stocks) for fear it could cause a liquidity crisis that could trigger a daisy chain of failures.

A surprise liquidity crisis is a legitimate reason for brokerages to issue restrictions, but the exact way in which they enacted these additional regulations wreaks of coordinated fraud to save the wounded hedge funds and turn the tables on the little guy on the brink of a historical David vs. Goliath upset. Dave Portnoy (aka. Davey Day Trader Global) delivered a few excellent smashing interviews on his own channel and on financial news networks (1,2)

The CEO of Interactive Brokers, Thomas Petterffy, in this CNBC interview gave great insight into what was going on behind the scenes from a liquidity perspective.

Essentially, as Gamestop was taking off to $500 the zero sum option payout if Gamestop closed at that price at that week’s market close was $15B to the winners, paid by $15B in losses from the losers.

This math from Petterffy does not even take into account the gains and losses of those long and short the stock.

Brokerage firms were worried their clients wouldn’t be able to pay the $15B in losses and they would go bust first.

When that happens, the Clearinghouses and Brokerage firms themselves become liable to cover the missing capital not re-coverable from their clients losses to pay out the winning option holders.

The losses were potentially so large that it could cause some of the brokerages and clearinghouses to have insufficient reserves to pay out the winners, triggering a daisy chain of counterparty risk that could blow up the whole financial system like the subprime loan crisis did in 2007/2008.

If GameStop was squeezed above $500, the $15B zero sum Win/Loss bet settling likely increases geometrically, amplifying the counterparty risk scenario..

Now here’s the kicker…

I don’t see how Thursday’s surprise restrictions changed anything but delayed the inevitable.

The short sellers and the market makers are still trapped.

Gamestop stock rebounded 60+% on Friday on news of Robinhood’s (the most popular retail brokerage app where a significant portion of this action has taken place) reversal in policy — and data shows the stock is still 140% sold short.

Side note: short interest over 100% of float is probably something that should have never been allowed to happen and will likely be regulated heavily in the future. It appears short sellers doubled down today rather than covering.

The supply/demand equation is nearly on tilt to infinity until something structurally changes.

With existing shareholders smelling blood, they don’t want to sell till much higher prices. On forums, I’m seeing many wanting to hold out till $2000+. So there’s no supply. Unless and until Gamestop does an offering of more shares (a common corporate maneuver, where an executive team elects to raise more money from the public for the internal operations of their company at the market share pice) — But if GameStop can read the writing on the wall why would they not wait for prices to climb much higher and effectively get paid out by trapped hedge funds as ransom? And if that type of forced buyout/settlement by hedge funds at ransom level price ($2000+) occurs then GameStop will effectively be an extremely well capitalized holding company with billions of dollar to deploy towards future endeavors. Who knows — WSB may even have enough shareholder control by the end of this to organize within a trust and direct the future of GameStop and how these billions are spent — with an incredibly loyal customer base ready to buy any and all future products and services.

Meanwhile, while Supply of GameStop shares is gravely constrained, Demand for GameStop shares is streaming in from many constituents:

1. Retail who want in on the mania and who want to crush Wall Street Hedge Funds who have long taken advantage of the little guys.

2. Short sellers who need to cover bets gone wrong before it blows up their whole firm.

3. Market Makers who sold Out of the Money Options to retail clients who are algorithmically programmed to ‘delta-hedge’ by buying stock as the price increases.

Large institutions and hedge funds who also see the writing on the wall with multiple trapped multi-billion dollar hedge funds, who relish the opportunity to pile on the damage on the trapped Wall Street Funds and profit from this special situation. Their participation is arguably why GameStop and many other temporarily restricted stocks held up so well until the B.S. restrictions of only allowing selling and no buying (rather than simply halting) were lifted.

The GME WSB/Reddit crowd has only grown hungrier with more conviction that they have a powerful Wall Street animal wounded on the ropes.

This has become about much more than profit.

This is the Rebirth of the Occupy Wall Street Movement.

Only now protestors aren’t ineffectually rambling around in parks with loud speakers but beating professionals for Billions at their own game. They found an area where a number of Hedge Funds got too greedy, built an incredibly effective counter-attack strategy and now they’re trapped with two options: Cheat or Beg for Mercy.

However, the actions by Brokerages to buy more time may have opened up a few scenarios:

1. Gives everyone (Hedge funds, Clearinghouses, Brokerages) time to secure loans so losses can be handled by the system.

2. Gives central banks ready to open emergency lending facilities to supply liquidity — reminiscent of the Long Term Capital Management blow up in the 1998.

3. Gives regulators a chance to intervene and bail out the system by finding a way to shut down this squeeze mechanism.

The scary/exciting thing is this likely doesn’t end with GameStop.

Now that the ReOccupy Movement has tasted their power and potency, they are being encouraged to direct their energy to other overly shorted stocks.

This may not end until every stock with a short float over 20% has its holders preemptively cover their shorts in fear.

And when the force of this movement directs its energy on the Paper Silver Market — as is being encouraged by many thought leaders…then watch out!

If the Paper Silver Market is targeted with the same gusto as Gamestop, it has the potential to blow up the entire Financial System by revealing Fiat Currency for the fraudulent debt-enslaving scam Central Banksters have constructed it to be as Silver and Gold shoot to the moon, effectively triggering hyperinflation as confidence in unbacked paper currencies is shattered.

And if you think this has nothing to do with the elaborately planned Multi-Decade White Hat Military Operation I’ve been telling you about in recent weeks (aka Q Anon disclosures) designed to take down the Cabal and trigger the Great Awakening backed by a new Gesara/Nesara White Hat Financial System… then I’ve got a few more Flatten the Curve Lockdowns to sell you.

The Corrupt Game Stops Here.

(You see what I did there, right?)

Their Symbolism will be their Downfall.

And it will be your Awakening.

The Universe is Synchronistically Speaking to you in every moment.

Nothing can stop the Societal Transformations that await us.

Enjoy the Show.

Next Steps:

Join my free facebook group: Multi Dimensional Money & Investing where I will be tracking this unfolding saga in depth and will continue to do extensive Q&A along the way — about what’s happening at the systemic level and how you can participate and contribute for fun and profit.

See the original post in the Multi Dimensional Money & Investing Facebook group with many more sources and references for the essay in this email and what’s continued to unfold.

Stay tuned for follow on posts on the epic #silversqueeze now trending worldwide on Twitter and how you can participate. In the meantime, the quick trade tip is: buy physical silver wherever you can find it — Silver Bullion Dealers Are Running Dry. Here is a spreadsheet with a list of recommended Silver Bullion Dealers from around the globe.

If you’re a more experienced trader — the Reddit / WSB community is organizing around generating another gamma squeeze by buying call options on SLV at the 35 Strike with April expiration. There’s also a great opportunity to generate a short squeeze in leading silver miner stock First Majestic (AG) due to their historically high 20+% short interest. I’ve owned a boatload of call options in First Majestic and many other silver mid majors for many months now. The silver mining trade has been our highest position since last summer, as the global macro set up is perfect. This Reddit / WSB movement is explosive gas on a fire that was lit long ago.

After positioning myself and my small set of existing clients in this massive opportunity in Silver and Gold and their respective mining stocks, that allowed us to effectively be a top 1% performing asset manager in 2020 — I’ve been working on setting up structures to support others in the realms of wealth management, financial education and unique private equity investments. I can currently offer portfolio consultations on larger portfolios (though I currently have a waiting list) and am working on creating more scalable ways to support the long tail of smaller investors who want my support right now. If the Silver Squeeze is successful, it will send massive shockwaves through the entire financial system triggering dislocations in nearly every asset class (stocks, bonds, commodities, currencies etc.) due to both a swift regime shift to a new era of inflation — potentially hyperinflation — and a massive deleveraging due to both this rapid shift and many firms triggering a daisy chain of counterparty risk induced busts in the process. This won’t necessarily happen, but it is prudent everyone has at least some prepared gameplan should this scenario unfold. You can inquire about how I, my team and extended network can support you here: https://trueself.typeform.com/to/udIw0OmP

I’ve identified and built a partnership with whom I consider to be the top hedge fund in the precious metals space. They opened up a new fund in August and its returned 155% in the time since — and looks poised for massive gains. The fund has a 250k minimum, which is prohibitory for many, so I’m working on setting up a Special Purpose Vehicle that would let others come in minimums potentially as low as $1,000. You can find out more in this post. Let me know if you’re interested in either opportunity. Going through the same type form link listed above is a good way to stay in touch.

Stay tuned and stay attentive — this is an incredibly exciting moment in financial history and world history at large, signifying a potential turning point in the epic time honored battle between the Light and Dark in the Grand Game of Existence.

To your multi-dimensional expansion and awakening,

Max