Still think TITNC3: Return of the Iceberg was peak

Looking forward to more statistical data forthcoming from these apparently as yet unreleased federal reserve polls I've just been made aware of...

 

Brokerages make more than enough on active management/advisory fees, front loads, banking services, and shitty annuities that they can leave trades commission free without PFOF and remain very profitable.

Now, what behavior would they *attempt to excuse* with PFOF going away? Good question.

 

Also if we're doing red now can some shit please drop to the point where it's worth buying? I'm gonna need either VTI 195 or SPYD 42.50 please.

 

Moass please go so I can just get a knee replacement.

Gonna buy more gme if it somehow goes sub 100. Keeping an eye on NVDA and SPOT next couple weeks. Making small list and prices I’ll buy some stuff at. Still on the buy and hold plan.

I’ll randomly buy gtii if it’s sub 1.30, then hopefully let it run and do another 20% gain as I’ve done a few times w it.

I haven’t followed the BBIG story so I’ll sit that one out.

While back in Dallas for summer I’ve been to ASO a couple times. Still love that store.

ok bye I’ll pop in in couple months

 

ACL?

Tendon repair?

Cartilage repair?

 

MCL and MPFL repair. Tore both 3 years ago when I shattered the kneecap as well. Haven’t ran since. Have had often and random kneecap dislocations since. This repair will stop that. I’ve got significant cartilage damage to the point that is irreversible.

 

I shattered my patella 2 years ago, Suprised to hear you had ligament damage. They said usually with that amount of force to the bone, there isn't rotational injury... Curious how yours happened

 

Do tell, if I may ask.

 

Our discussion today of profits and income for brokerages reminded me of these two GREAT articles..
https://impersonalfinances.com/fidelity-401k-fees/

 

And this one
https://impersonalfinances.com/edward-jones-fees/

 

Good read: https://old.reddit.com/r/Superstonk..._interest_shares_borrowed_and_cost_to_borrow/

So I’m sure you’ve all noticed the rapid increase in short interest, shares borrowed, and cost to borrow recently. There will probably be a bunch of FTDs soon too.

Why?

The obvious answer is that SHFs are shorting the hell out of the stock. But it’s wrong. In the past they shorted the hell out of it without increasing these metrics. And our stock’s price movement doesn’t really feel like it’s being shorted to hell right now, not anymore than it usually is. A more likely answer is that one of the retail brokerages is exiting its swap positions with a short hedge fund.

What do I mean?

Remember back during the sneeze when short interest was way above 100% and FTDs were all the rage? But hedge funds needed to convince the public that they had “closed” so they needed to fix the short interest and FTD data. Swaps were the secret to that.

How does a swap hide short interest?

Short interest reporting accounts for a firm’s net position. It doesn’t account for positive or negative balances within a firm’s internal accounts. Suppose that Shitadel short sells 75,000,000 shares of GME to apes with Fidelity accounts. That causes Fidelity to have a net +75m shares and Shitadel to have a net -75m shares. This gets reported as a short interest of 75 million shares.

Suppose that instead of Shitadel, it’s Fidelity that is shorting the stock. Fidelity sells 75,000,000 shares to apes with Fidelity accounts. That causes Fidelity to have (75,000,000 - 75,000,000) net 0 shares. This gets reported as a short interest of 0 shares.

But this isn’t really Fidelity’s game so why would they take open this huge short position? The answer is that Shitadel is paying them for an equity return swap position that gives Shitadel equivalent exposure to being short the 75m shares. Fidelity’s side of the swap makes them equivalently long to 75m shares, which isn’t their game either, so they short shares to their own customers to hedge the long position so that they’re effectively neutral. This is how the short interest disappeared after the sneeze.

What else does a swap do?

These swaps do a few other cool things for the short hedge funds, beyond just hiding short interest. Let’s talk about stock borrowing and delivery.

Stock delivery occurs at the NSCC when a broker sells a stock to another broker. They net up all their transactions, realize that Smellvin Capital owes 69,000,000 shares to Vanguard, and that creates a delivery obligation. Smellvin doesn’t actual have 69,000,000 shares to deliver so they need to borrow 69,000,000 shares to deliver. Well, turns out they can’t do that either. That’s how you end up with Smellvin not being able to deliver those shares, resulting in a failure to deliver (FTD).

But what if Vanguard short sold stocks to its own customers. There’s no stock to deliver to another broker at the NSCC, it’s just an accounting thing in their own books. So no delivery occurs. And because no delivery occurs, no fail to deliver happens. This is how the FTDs disappeared after the sneeze.

Likewise because Vanguard doesn’t have to deliver to itself, there’s no need to borrow the stock to make delivery. So the number of borrowed shares plunges.

Another “benefit” of this is that there’s a lot of rules about which customer-owned shares a broker can lend out. You can only lend out shares in margin accounts, and then only up to 140% of the value of the amount of margin being used. A margin account might have no margin actually being used, in which case the broker is not supposed to lend out the shares because they are considered fully-paid, like a cash account. This really limits the ability of a broker to lend shares to shorts when apes are conscientiously keeping their accounts off margin because they think their broker will actually have their shares.

It’s different if the broker is shorting to its own customers. Again, there’s no need to lend, or borrow, or deliver. +1 offsets -1 and the brokers net position is 0. So even if you’re in a cash account, they don’t actually need to have a share for you if it offsets their own negative position.

How can a broker not have my shares?

SEA 240.15c3-3 covers when a broker is required to hold a share for you. It’s about 200 pages long. About 5 of those pages are “you need to own the stocks your customers think you own”. The other 195 pages all start with “unless”.

The most important sections of this law for us are (d) and (n). In (d) the SEA requires that a broker possess the security for a fully-paid customer (that means they can’t use margin as an excuse to not possess it) who has held the stock for at least 30 calendar days. There’s a bunch of “unless” clauses surrounding that which give the broker room to wiggle out of that responsibility.

If you’re curious (d) is why the shares borrowed is always higher than the short interest. Shares borrowed = short interest (firm to firm shorting) + internal firm shorting to its own customers where the firm has needed to obtain custody of a share to meet the requirements of (d). The broker doesn’t buy the stock to meet (d), that would change their position. They just borrow the stock to meet the custody requirement.

Like I said the requirements of (d) are surrounded by “unless” clauses. My favorite is (n) which allows endless time extensions at the discretion of industry self-regulators for things like “the market isn’t liquid enough for us to obtain custody of these shares but we’re doing our very best, pinky promise!”

So what exactly does this mean?

This shows how swaps can be used to hide short interest, FTDs, and allow the creation of CFDs in a market where we think we’re being promised real shares. This is how the massive short position against GME was hidden after the sneeze.

So what about the rising short interest, borrowed shares, and cost to borrow?

The most likely reason these metrics are increasing is because one of the retail brokers is closing its swap agreements with a short hedge fund. Because the broker no longer has a long exposure from the swap, they buy to close their short position against their own clients. This causes the broker to become net long. At the same time because the swap is being closed the hedge fund loses its short exposure it was getting from the swap. In order to maintain its overall short position the hedge fund is selling (short) shares to the broker. This causes the hedge fund to become net short.

Because the hedge fund is becoming net short in actual shares, this gets reported as short interest. Likewise they need to borrow shares for settlement on T+2 resulting in an increase in shares borrowed and cost to borrow. Depending on the extent of how much of the short position is being moved from shorts hidden by swaps to an exposed short position, this may end up causing an increase in FTDs.

DRS may also be having an effect here, as every share that gets DRSed is a share that brokers lose the ability to turn into a CFD.

TL;DR: The increase in short interest, stock borrowing, and cost to borrow is most likely primarily a result of a retail broker closing swap positions with a hedge fund, forcing exposure of a previously hidden short position.

 

Both good for people to know.

In most cases, your 401k is still worth it as long as fees + expense ratios < employer match + taxes saved, which they almost always are, but an employer that cares can help their employees out by looking at and optimizing these things.

My current job has our 403b and 457 through fucking AIG, and the index selections are through state street and have horrific .5% expense ratios, which are unconscionable for index funds.

The math makes it technically worth participating for full match, but that's all. I do urilize the 457 a bit more though, just because of the flexibility it offers after separation.

 

hyper extended playing soccer. Guy rolled over my foot while I was at full sprint. Then while it was being extended I was rotating on it in a way that’s not supposed to happen. Doc said it was sorta a freak injury. I wish my club team took game film because friend said it wasn’t just a slight hyper extension either, he was about 15 yards away and said he instantly got queasy. It popped me up into the air as well. Was very odd and I instantly knew I was fucked up. Cartilage damage is partially due to cap not growing back together in an identical shape as before it broke, partially because the groove the kneecap is supposed to slide through is not deep enough.

Doctor gave me the option to do an osteotemy(cut and rotate the tibia/shin bone, whatever you wanna call it, and then shave down the bone to deepen the groove). But the issue is my cartilage is already so damaged he said even doing that I would still have grinding and discomfort. So I opted to just repair the ligaments. This surgery is just to fix instability. The osteotemy was wayyy longer recovery as well as a lot more potential for things to go wrong, and the doctor told me it wouldn’t do anything for pain. He’s had a good record of fixing this type of issue with just the MPFL, however he said the groove in my knee is the most severe issue he’s personally dealt with.

The past year anything more than walking, or a constant pressure with no sideways motion/twisting(like a leg press) would cause it to start to slide. Two days ago on my buddies boat I stepped to keep balance while it was rocking, and I planted with my foot angled out slightly too far, and I could feel it start to slide and was close to popping. Same thing happens any time I try to play soccer or basketball and make any kind of lateral movements on the slightest of jog.


It’ll look like this for about a month after a full dislocation. And It’ll be very sensitive to hobble around on. Full dislocation has happened 4 times past 9 months. And many many scares where I felt it sliding and I’d pick up my leg to take pressure off the joint, which usually results in me falling down lol.

The doctor who did the initially surgery was in Phoenix, and I had two more after on that knee. One to clear out scar tissue(was locked at 90), and one to take out a dart that shifted and ground down cartilage.

i came back to Dallas this summer to the doctor who repaired my right knee about 8 years ago(dislocated cartilage), and my elbow(built up acid in the joint due to over use playing baseball, killed the cartilage and part of the bone).

unfortunately with so much cartilage damage, I was told I can’t be a candidate for a biopsy treatment unless technology improves. Doc went ahead and harvested some cells while he was in there today.

Or if TL;DR - freak hyper extension injury, repairing ligaments now. Cartilage r fuk. Need replacement in the future. This is just to stop random dislocations but it’s still gonna hurt like a bitch any time I do strenuous activity. Might have to join treefart on the elliptical for my cardio.

 

Yikes. Mine was far less complicated in comparison.

 

Nice work.

<---- physical therapist of 14 years with tons of experience on this kind of thing.

Unequivocally, it's gonna be a very long rehab road post op and I hate to say it, but people are almost never 100% after a trauma that severe. Your intertrochanteric groove abnormalities are not helping you either - just one more area for joint instability to lurk and interfere with your day. But you knew all this already.

Regardless of what you *want* to do, yeah, low impact cardio once you're released to that level of activity is going to minimize issues with pain, swelling and, later in life, arthritic symptoms. The elliptical ain't a bad choice.

Good luck on the path. I don't envy you, but I do wish you well!

 

Poor bastard's not even 20 yet lol. Tall and spindly like a stork too

(He goes to school in Reno, I've helped him with his truck a couple times)

 

And with that injury rap sheet, at 45 he's gonna feel 60

If you're gonna get injured though, do it young for sure. The body can comp you a couple decades before things get really uncomfortable in terms of arthritic changes. Youth is a gift.

 

Too bad almost no one realizes that until it's gone. lol

 

My brain seems to perpetually stay around 25. Some days the body feels either 20 or 60, and you might not know which until you get out of bed. Past results are no indication of future performance.

*puts feet on desk and continues enjoying beer*

 

--All of us mid 30's lazy fucks