Planet Money How the government got hedge funded
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Oct 10, 2025 Discover how the U.S. government borrows money through Treasurys and why they've long been viewed as safe investments. Learn about hedge funds diving into Treasury trades and the risks involved in their new market strategies. The podcast explores the mechanics of Treasury auctions and the role of primary dealers, shedding light on how market dynamics shifted after the 2008 crisis. Delve into the potential consequences of a sudden unwind in these trades and what that could mean for financial stability.
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Treasuries Are The World's Safety Anchor
- U.S. Treasurys fund the gap between federal spending and revenue and are viewed globally as extremely safe.
- That reputation makes them deeply liquid and central to global finance.
Inside The Treasury Auction Room
- Dilip Singh described the auction room at the U.S. Treasury as sober, quiet, and disciplined.
- He recalled small teams and a ritualized auction process that prioritizes predictability.
Primary Dealers Bridge Government And Markets
- Primary dealers like Goldman Sachs act as official conduits between the Treasury and the wider market.
- They underwrite auctions and then distribute new Treasurys to clients to preserve market stability.