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How the government got hedge funded

Overview

Shownote

Highlights

Transcript

Chapters

Pins

How the government got hedge funded

Planet Money

Oct 10
Planet Money

Planet Money

Oct 10
OverviewShownoteHighlightsTranscriptChaptersPins

Shownote

The U.S. government spends a ton of money, on everything from Medicare to roads to defense. In fact, it spends way more than it takes in. So…it borrows money, in the bond market. By selling U.S. Treasurys, basically IOUs with periodic interest payments. An...

Highlights

The U.S. Treasury market, long seen as the bedrock of global finance, is undergoing a quiet transformation. Behind the scenes, a new set of players is reshaping how the government funds itself—hedge funds leveraging complex trades to profit from tiny market inefficiencies. But as their influence grows, so do concerns about what could happen if things go wrong.
11:06
The 120-second Treasury auction reveals real-time market sentiment.
16:46
Hedge funds now play a critical role in Treasury market liquidity by engaging in the basis trade.
21:00
About $800 billion is currently involved in the treasury basis trade
22:04
The Treasury basis trade collapsed in March 2020 due to pandemic-driven market stress.
27:30
Hedge funds may take bigger risks expecting government bailouts due to their critical role in Treasury markets.

Chapters

How does the U.S. government borrow trillions through Treasury auctions?
00:00
Who’s stepping in as banks pull back from Treasury markets?
13:59
What is the risky trillion-dollar game hedge funds are playing?
19:21
Could a repeat of 2020’s market meltdown happen again?
22:04
Are we setting up for the next financial rescue?
25:00

Transcript

Alexi Horowitz-Gazi: Hey, Alexi Horowitz-Gazi, here to ask you to pre-order the Planet Money book today. It's filled with great stories, just like you hear on the podcast, gorgeous illustrations, and a few surprises we will share soon. We put a lot of ener...