4% to 9% in 2 years. Central banks out, hedgies in. And hedgies are levered via 5 prime brokers who own 2/3 of the funding. So the "most liquid market in the world" is now 50 funds running 20x basis trades, backstopped by 5 banks. That's not a market, that's a margin call waiting to happen. No wonder there's no natural buyer left except hedgies and stablecoin issuers.
4% to 9% in 2 years. Central banks out, hedgies in. And hedgies are levered via 5 prime brokers who own 2/3 of the funding.
So the "most liquid market in the world" is now 50 funds running 20x basis trades, backstopped by 5 banks. That's not a market, that's a margin call waiting to happen.
No wonder there's no natural buyer left except hedgies and stablecoin issuers.