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50 sats \ 0 replies \ @optimism 1 Apr \ on: The Dangerous Hedge Fund Basis Trade econ
As hard as the article is to read, it was worth it because there's a really interesting thing further down:
The authors recommend that the Federal Reserve, in periods of extreme stress, be prepared to take over the hedge funds’ positions…the Fed could stand ready to purchase Treasury securities but it would also, as the hedge funds do, take offsetting short positions in derivatives.
pdf link of the Brookings paper quoted
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