There are many dates that are emblazed on investor’s foreheads. The ushering in the terrorist trend occured on September 11, 2001; the “Lehman moment” on September 15, 2008 when markets received confirmation the bank’s nontransparent derivatives were more than faulty; welcoming the world to electronic flash crashes occured on May 6, 2010; and then there is the lesser known date of October 15, 2014. This is when significant volatility, spanning a six deviation move, hit the US Treasury market. In July of the following year financial regulators and the US Treasury Department found that there was not one single cause for…
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- Banks leaving US Treasury market and causing liquidity crisis is "misleading"
- Dealer-dominated US Treasury market relies on humans to facilitate trades where "relationships" and a "club" determine market fills
- Big banks have significant advantage over small banks, Tabb notes
- Electronic markets not in vogue in US Treasuries despite investors saying they would prefer the transparency
- Banks are just playing by the rules, but the real issue is who influences how the rules are written?
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