- Just where was the fire that caused the Federal Reserve to buy $1.3 trillion of treasury debt in a month? – John Cochrane.
Basically a bunch of hedge funds replayed an age-old strategy and got caught. Plus ça change. They bought treasury bonds and simultaneously sold them in futures markets. Since treasury bonds are great collateral they can lever up a small price difference to make a lot with little investment. But even arbitrage opportunities are not risk free.
- US stock market rally confuses liquidity with solvency – Gillian Tett, Financial Times.
Despite the massive stimulus moves around the world and the unimaginably large new rounds of money printing, there is substantial uncertainty about the future viability of a large range of businesses.
Paul Singer of Elliott Management
- April 2020 was one of the strongest months in years across numerous markets – WSJ
