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Regulators are almost feuding with hedge fund "speculators" over something called a basis trade. The former alleges it is a huge systemic risk, and they are right though for the wrong reasons. In the latter group, supporters point out funds have become necessary balance sheet warehouses for Treasuries because of a key gap. Here we'll examine what that gap really is and why it actually matters to find out who is right (spoiler: both).
Eurodollar University's Money & Macro Analysis
Bloomberg: Griffin Says Scrutiny of SEC Basis Trade ‘Utterly Beyond Me’
https://www.bloomberg.com/news/articles/2023-10-25/ken-griffin-says-sec-scrutiny-of-basis-trade-utterly-beyond-me
OFR WP 2021-01: Hedge Funds and the Treasury Cash-Futures
Disconnect
https://www.financialresearch.gov/working-papers/files/OFRwp-21-01-hedge-funds-and-the-treasury-cash-futures-disconnect.pdf
Twitter: https://twitter.com/JeffSnider_AIP
https://www.eurodollar.university
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What is Eurodollar University?
Jeff Snider will guide you through the realm of monetary science. Multiple episodes uploaded each week, discussing big news and key current events, the state of markets and what they are telling you, as well as historical summaries and deep background material so that you can understand what’s really going on in this eurodollar’s world.