From the monthly archives:
Barclays PLC’s Barclays Global Investors analyst Ananth Madhavan has released a report (PDF) arguing that the effects of leveraged ETFs on the markets have been underestimated. Jason Zweig has a nice writeup at The Wall Street Journal. Clearly leveraged ETFs have created some extra volatility in the markets. But have they created systemic risk? [click to continue…]
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When the economy tanks, Treasury bills become a very popular investment. The downside is, when you combine increased demand for government bonds with very low inflation, these same Treasury bills pay extremely low rates of return. So low, in fact, that their real returns would virtually wiped out (and possibly turned negative) should inflation return to its normal rate. Not a pretty picture. [click to continue…]
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