#56: Joseph Wang On How The Fed Forever Altered The Investing Landscape
Superinvestors and the Art of Worldly Wisdom
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The Base Trade and the Quantity of Tightening in 2019
The marginal buyer of Treasury securities in 2019 was actually the hedge fund community. They were buying as part of an arbitrage trade called the Cash Futures Basies. And they're seeing that there's a disallocation between the price of the two assets. The demand for that trade grew so much it basically sucked up all the market, all the money available to lend and repo.
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