Loading ...SEC Cracks Down On Basis Trades, Will Force Top Hedge Funds To Register As Dealers, Resulting In Collapsing Treasury Market Liquidity
After the latest Quarterly Refunding presentation by the TBAC dedicated a substantial portion of the prepared materials to the risk of a basis trade exploding, leading to catastrophic damage to the Treasury market, it should not come as a surprise that moments ago the SEC revealed that going forward hedge funds and prop trading firms that regularly trade US Treasuries – often with 20x leverage or more to greatly magnify moves as little as one basis point (here LTCM flashbacks should come flooding in)- are set to be labeled as dealers by the US regulator, a tag that will bring with it unwelcome scrutiny and attention not to mention greater compliance costs and scrutiny.
This sounds ominous …. what’s the real objective??
“This sounds ominous …. what’s the real objective??” The Biden Administration(Obama and most of the people pulling the strings are former Obama people) are hell bent on collapsing the current system. They will succeed in doing so. It will happen before the election. What happens and whether or not there actually is an election will decide what replaces it.