How The Crisis Nearly Blew Up One Of The World’s Safest Trades
Odd Lots
00:00
Navigating the Levered Treasury Market
This chapter examines the intricate dynamics of the levered U.S. Treasury trade, emphasizing the roles of hedge funds and dealers in the repo market amidst post-2008 regulatory changes. It highlights the complexities arising from leverage limitations imposed on banks, operational risks during crises, and the challenging balance traders must maintain between profitability and market stability. The discussion underscores how perceptions of risk and liquidity necessities continue to shape trading strategies and market behaviors.
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