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Former NY Fed trader Joseph Wang explains why the Treasury market keeps experiencing liquidity crises. The market has grown 5x since 2008 while dealer balance sheets have shrunk, creating a structural mismatch that the Fed must repeatedly backstop.
This summary was generated from show notes and public descriptions, not from a full transcript review. Details may contain inaccuracies.
Canon
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Wang advises investors to accept that Treasury market structure is beyond individual control and instead position portfolios for the inevitable liquidity crises rather than pretending they won't happen.
Highlights
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The Treasury market has outgrown its plumbing — structural mismatch between market size and dealer capacity
Wang explains that Treasury debt outstanding has grown from $5T to $35T since 2008 while primary dealer balance sheets have barely grown, creating recurring liquidity crises that require Fed intervention.Was this useful?