Stock Market Playing Kick the Can with Liz Young, Jim Chanos and Danny Moses
RiskReversal Pod
00:00
Is This a Credit Transmission Device?
What happened in late 94 in the Orange County crisis and again in in the late summer of 1998 with the LTCM crisis where you had in effect highly leveraged players who had bought long duration bonds. This is really a funding problem at a select number of banks that just simply mismanaged banking 101 which is to try to at least meaningfully match your asset liability durations not stretch for yield and finance it overnight at 0%. That's what sunk the investment banks in 08 and I know Danny does it's because they ended up with a whole bunch of toxic hard to market hard to value securities at the bottom of their balance sheets financed in the basically overnight repo market.
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