Rebel Capitalist News The Derivates Market Is Starting To Crack (This Is Huge)
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Apr 17, 2025 Explore the unsettling trends in the derivatives market as negative interest rate swap spreads raise alarms. The hosts critique flawed economic models with a touch of humor, blending financial insights with practical tips. Dive into the intricacies of fixed and floating interest rates, revealing market dynamics and counterparty risks that could shake the global monetary system. The conversation highlights the importance of authenticity in financial discussions and encourages personal growth at an upcoming event.
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Negative Swap Spread Puzzle
- Negative interest rate swap spreads are unusual and cannot be fully explained by dealers' balance sheet constraints or regulatory costs.
- The patterns in swap spreads indicate deeper systemic issues beyond simple issuance or regulation impacts.
BIS Explanation Is Flawed
- The BIS explanation for negative swap spreads as high premium for holding government debt is flawed.
- Swap spreads reflect arbitrage opportunities, not just bond issuance or cost of holding treasuries.
Always Wear Collar Stays
- Always wear collar stays when wearing a collared shirt for a polished appearance.
- Good collar stays increase your chance in social and professional situations, avoiding sloppy looks.