21. Post Trade Clearing, Settlement & Processing

[@cc-jj1ly]

Lecture starts at 19:30

[@Justicewarrior795]

omg thanks man, i wish i saw this before getting to minute 15:00 haha.

[@trufflecappuccino]

These expensive schools, its incredible how he suddenly has 19 minutes to waste before starting

[@alexanderkristofersson2043]

Let me disagree. A concisely communicated framework for assessing the feasibility of a business idea in the securities DLT domain may be time lost for many of us, though potentially one of the biggest time and money (and grey-hair) savers I've never heard of for the MIT target group of people who will actually move forward to setting something up in reality. This chance for me to peek into their culture and Mr Gensler's mind has no small value, despite many aspects of the content having aged. (And, funnily, despite the treatment of post-trade processes not coming across as the most expert, actually. 😊)

[@lawniczakjohn]

41:25 simultaneous execution and settlement; the whole reason the market exists in its form today is because it’s structured around delay.

[@suliekhan2621]

if a short seller went bankrupt what happens then ? who covers the shorts? the clearinghouse ?

[@lawniczakjohn]

00:37 makes sense why Gary said he wanted to protect the clearing houses in 2021. Credit. Default. Swaps. CFTC needs to release the data and these oversight positions need to be voted on by the public.

[@bcaominh]

The question of why multiple parties should have access to the ledger makes sense once one realizes how much trust matters in international transactions. Trust is not always a given and has been broken back in 2008.

[@bdoggtoronto]

Try 1913 with the creation of the Federal Reserve.

[@raghupeddinti8832]

F. F😢 hi ki 😊😮

[@Bamskki]

Proponents of open blockchains and cryptocurrencies claim that a clearinghouse is supposed to be a neutral party that doesn't have skin in the game and if we remove that neutral party and instead put our trust as seller and buyers into these brokerages and banks through a private consortium of nodes then they will eventually collude with each other and do their shady shit as usual, how do you guys would you respond to this claim? I'm genuinely asking and not trying to pick any fights.

[@jasondubon8090]

would be interesting to have this class after the whole robinhood/GME problem with the clearing houses

[@mkriegs0078]

Yes 🙌🏼 I’m not the only one watching an MIT college course at home in her free time to learn from Gary Gensler 😅

[@RonitLieberman]

@@mkriegs0078 Not alone!!

[@lawniczakjohn]

1:09:45 Derivatives and swaps

[@Akhil07mnit]

Its still "Bombay Stock Exchange" and one more was opened "National Stock Exchange" at Mumbai, India

[@callmedragon5321]

This is like having a pharmaceutical lobbyist as your doctor. Even then he's like there's too many transactions, it's too hard to distribute a ledger. We don't know how...

[@lawniczakjohn]

1:00:51 DTCC against blockchain saying their customers don’t want simultaneous settlement… because then the entire DTCC’s business model would be irrelevant.

[@ewor99]

Now I'm just posting to brag I'm on video 21

[@soursmurf6498]

Savage pilot you are.

[@ARK-nb4rd]

lol me to

[@801_XRP]

Do you guys have or know someone who has video 18 or Nov 15th 2018 when Jeff sprecher was there or remeber what was said a copy of the video would be great love to watch it or hear what was discussed that thx

[@DuderScooter]

45:30 and there you go, can’t answer the question other than “because hedge funds don’t have the money nor the shares to do it honestly, and DTC is financially incentivized to NOT get in their way.”

[@campusseoul]

I enjoyed Gary Gensler’s capital management story.

[@williamchurch711]

I use to work in the Margin department and even after settlement a trade can also be extended for a certain period of time.

[@arrowb3408]

So what do you mean "extended for a certain time"? You meant the margin loan or margin call or WHAT in Option trade, eih? ................... STF from Down Under....

[@depnox]

11:57 lol... hope he made an immutable ledger for the LME's nickel market for his project.

[@jjgalletta66]

I heard that BBBY is expected to squeeze until Friday, Aug-19, when all the shorts calls are due. Is this your understanding???

[@alphach1mp]

Can Gary talk about the billions of synthetics hidden in the dark pools?

[@zhengxunwu2060]

where is jeff sprecher's talk? why is the 18th lecture missing from the lecture lists?

[@mitocw]

Note that Lecture 18 is not available. There could be a number of reason it is not available: the lecture was not recorded, the recording was bad (e.g. no audio), the instructor did not want to publish the lecture, IP issue (permission of a speaker not given), etc. No reason is given on the course.

[@dinhbacshorts]

You are so wonderful, your face is so knowledgeable and kind! Thank you for your lecture

[@joanrocagas]

what if a clearing house defaults or fails somehow?

[@samforeman3137]

robinhood and gme essentially?

[@julkiewitz]

@@samforeman3137 That's not a valid comparison. In the GME's case the clearing houses ordered Robinhood to post more collateral, which they scrambled to get but eventually did. Until Robinhood posted collateral they couldn't accept more order flow in GME. If hypothetically Robinhood went under while also having very large positions open, then it's the clearing house that would have to eat the difference. Essentially the clearing houses are supposed to manage the counter-party risk in such a way that they won't ever be at risk of going under. If a clearing house was at risk of going under they probably would get bailed out either with private or public money, hard to speculate.

[@sammyfo1]

@@julkiewitz thanks for the in depth analysis.

[@russjamison9041]

@@julkiewitz no....it was the naked shorts that fucked up the "collateral"

[@bautistabaiocchi-lora1339]

almost done!

[@RaySherbourne]

Yes the dtcc won't like instantaneous settlement. But the companies that have been destroyed by market manipulation would like it. Future Gary hasn't done much at the SEC to curb this yet...

[@callmedragon5321]

Naw markets are efficient.... lol maybe at hiding crime. How long till buisnesses realize they don't need nasdaq or nyse they should move to a new distributed ledger market. After all that's what we all want transparency. And isnt that why companies have to file prospectuses. There isnt supposed to be the risk that the're is. After all its for investing, what they have done is turn it into a lie machine. First company that does will go to the moon

[@lawniczakjohn]

38:32 he mentions the Repo markets… interesting…

[@boradirik6645]

Is Class.21 missing? Class numbers on Slides and titles on videos do not match.

[@mitocw]

There can be a number of reasons why the lecture number in the slides do not match the video titles in KZbin: instructors try to plan everything out but course material can shift when it is taught (teaching a section went long, students asked more questions, deciding to change the order of topics to improve the course, etc.). In this case, the material has a different lecture number but it is not missing... just offset in the numbering. See the calendar at ocw.mit.edu/15-S12F18 for more details on the lecture order and topics. Best wishes on your studies!

[@balisong46]

34:48 is the real gold

[@jshellenberger7876]

Counterparty == && national guard + reserves + non covered employees == racket kickbacks from French printer

[@brendanquinn6894]

RBA is the Reserve Bank of Australia.

[@lawniczakjohn]

47:00 less liquidity is a terrible argument; Gary seems to agree

[@berajpatel8081]

Wow so in the 1840s the Philadelphia Stock Exchange was significantly larger that the New York Stock Exchange ....

[@shivakumarmangina6659]

CHESS - Clearing House Electronic Subregister System

[@1tents]

It’s unfortunate that he’s unilaterally attempting to use the SEC to regulate by litigation instead of collaboration. Some say he is attempting to stifle innovation long enough for his Wall Street buddies to catch up and compete in the nascent cryptocurrency market. Competition is good for everyone, he should be working to foster this driving force, not attempting to neuter it.

[@ewor99]

It's called "assay", you got it right

[@siomokof3425]

19:30

[@RiccardoVincelli]

37:32 Fun fact: not even the most brilliant finance minds have a dollar printer at home

[@xinghuiteng9920]

this is knowledge porn, like it

[@marcbocuse]

here the head of thé SEC is searching a solution for a financial system exploding in risk every trading-day and HOPEFULLY imploding/settle later (t+Dt) at settlement to a state with risk =>0 (all margin calls can be funded thereafter) … 🤫 any comments?

[@firelordzaki1600]

Following the latest sec lawsuit the yt algorithm strategically places this video on my feed. 😃 😊 😀.

[@DiscussionPoints101Global]

The man paid off by Citadel to pretend there was no short or gamma squeeze on Gamestop LOL! What a World we live in

[@dougmorrison8468]

and we are all so sick of whats happening with so many corrupt people in the government

[@glennrollins8422]

I believe that you are correct about Citadel and Gary Ginsler. He's looking the other way while the bank is being robbed. In the SEC if your hedge fund steals $100 million selling synthetic shares he will find you $10 million but you get to keep $90 million. I wonder how much Citadel paid him to look the other way.

[@DeusDinheiroMatematica]

that was very interesting

[@XRP747E]

XRP does it better, faster and cheaper - so let's tie it up in court for a few years and let ETH dominate the market (ETH severely expensive, but supported by corrupt SEC officials).

[@samm123465]

Dope!

[@dcsgreeneyes]

I love these courses but Hugo will not shut the hell up!!!!

[@rotnmet6257]

$RVP

[@mquiroz450]

shhhh

[@stlouisix3]

Gary Gensler's an intelligent bloke-I hope he becomes a Catholic☦✝☦

[@raytrack3552]

This guy should be banned from any further guest speaker engagements--what he says is complete opposite of his actions. This guy is just as corrupt of Hedge Fund managers. Retail has lost faith in the integrity of the stock market

[@wearetheloserz]

the sec just implemented this tech. Always looking for a scapegoat, stick with Kenny not Gary