Trimbath keeps banging the drums on FTD’s but GME has very little FTD’s going on. I do think FTD’s are a big problem and they should carry consequences but I don’t think it’s the biggest problem.
The biggest problem, and the one most relevant to GME, is infinite liquidity.
If there is infinite liquidity, then shorts can buy to close, and then immediately short two or three times more and walk away with even more money. Why FTD when you can roll over your shorts, and just keep piling them on?
When it’s time to close those shorts, you close them and short sell twice over again.
Then when it’s time to close those shorts, you close them and short sell twice over again.
And then when it’s time to close those shorts, you close them and short sell twice over again.
Repeat, repeat, repeat.
This is how Citadel Securities traded over 964 million shares of GME over the past 3 years.
https://www.reddit.com/r/GME/comments/15t09n7/the_gme_otc_conspiracy_presenting_over_3_years_of/
Someone should ask Trimbath what she thinks about infinite liquidity on the stock market, and if the DTCC should be audited?
The only person authorized to issue new shares is the company whose shares are being traded. The DTCC can not issue new shares.
In the face of infinite liquidity, arguing over FTD’s is like being worried you left your oven on when your house is on fire.
The only way this can crash is if we can prove there aren’t any more shares. When all shares are accountable outside the DTCC it’s over, no matter what.
The way I understand is that FTD are a symptom of infinite liquidity for what they are unable to close out. When there is huge action and more buys are going on this is when they lose control and we see more FTD.
In the congressional hearing they even mention that infinite liquidity is just part of the system as they try to allow everyone to buy.
They have had years to learn how to hide their crime. It’s a mix of PFOF, FTD, swaps and probably much more that we have yet to uncover that allows them to hide it all from both us and the SEC. The issue is they have the tools and with both a hedge fund and a market maker branch are able to internalize everything in their system preventing outside eyes. Are there other metrics that we are missing? Is the Consolidated audit Trail (CAT) not enough and have loop holes we have not noticed. What about the netting system?
The only way we are able to find out and take away liquidity is to DRS. Eliminate the middleman and take back ownership
I used to think FTDs were the issue and now technically I don’t think FTDs are the issue (hint colloquially FTDS are the problem). I believe the key to all of this stems from nuances and the real issue is there can be more entitlements than total shares issued by the company.
I’d like to see more discussion about this.
To extrapolate further consequences from infinite liquidity:
options are useless. Any attempt to move the price by gamma squeeze just gets washed out with a larger amount of short selling. It’s possible the hedge funds were taken by surprise in January 2021, but they’re watching closely now and they won’t let it happen again.
TA is useless. Sure we can look at short volume and options data and draw lines on a whiteboard. But any time we predict a MOASS they will just short sell more on that date and there won’t be a MOASS.
How to MOASS? Audit the DTCC. The only way we win is if there is a short selling ban on GME. The ban would have to last for years and force all short sales to close without any opportunity to roll over the short by just shorting more.
