Nicholas Dunbar, Author: “Inventing Money”
Alpha Exchange
00:00
The Divergence of Counter Parties in the Markets
The Russian government defaulted on these local currency bonds called GKOs which people thought that it could hedge those because you're hedging using a non-deliverable forward but then that was also prevented by Russia's central bank. That trade is a lot of money and then that started a more serious unwind of risk trades across the board. So then that increased equity goal and then you had this question of the market of LTCM and the equity of all trades were going down in price. Then you have this market phenomenon where once people know that there's a false seller in the market then you ultimately can trade against them and equity all best were able to do that.
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