How The Covid Shock Nearly Destroyed The Financial System

How The Covid Shock Nearly Destroyed The Financial System

Why the Federal Reserve had to step in again to sop runs on money market mutual funds and keep the financial system from imploding.

Topics covered include:

  • What are the differences between shocks and vulnerabilities
  • What are the four main vulnerabilities the Federal Reserve monitors
  • How deleveraging and demands for liquidity lead to market stresses
  • What are the types of money market funds and how were they impacted by the Covid 19 shock
  • How was Treasury bond trading impacted by the Covid shock
  • Why the Federal Reserve stepped in to stop the market contagion from spreading
  • What are the downsides to central bank interventions
  • What individual investors can do to protect against future shocks


Thanks to Mint Mobile and Truebill for sponsoring the episode.

For more information on this episode click here.


Show Notes

President’s Working Group on Financial Markets Releases Report on Money Market Funds—U.S. Department of the Treasury

Report of the President’s Working Group on Financial Markets: Overview of Recent Events and Potential Reform Options for Money Market Funds, December 2020—U.S. Department of the Treasury

U.S. Credit Markets Interconnectedness and the Effects of the COVID-19 Economic Shock by S.P. Kothari, Dalia Blass, Alan Cohen, Sumit Rajpal, and SEC Research Staff—U.S. Securities and Exchange Commission

Financial Stability Report November 2020—Board of Governors of the Federal Reserve System

How Vanguard Overhauled a Prime Money Fund by Bernice Napach—ThinkAdvisor

Overnight Index Swap by James Chen—Investopedia

Cash Viewpoint: What do Variable Rate Demand Notes do for Your Money Market Fund—Invesco

Related Episodes

270: Repo Rates Soared—Here’s Why It Matters

291: How To Survive the Coronavirus (COVID-19) Shutdown

305: Are Banks Safe?


See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Episoder(572)

Money for the Rest of Us Update

Money for the Rest of Us Update

This week there isn’t a regular Money for the Rest of Us episode, but David shares an update on what’s happening behind the scenes. He previews an exclusive Plus member livestream on the forces shapin...

24 Sep 20256min

Resilient Wealth in an Era of Infinite Money

Resilient Wealth in an Era of Infinite Money

What happens when the money supply grows too slowly or too quickly? From gold-standard deflation to QE-driven inflation and inequality, we trace the lessons of monetary history, and what we can do tod...

17 Sep 202525min

Forests, Fakes, and the Fight for the Real

Forests, Fakes, and the Fight for the Real

From salmon leaping along the Vancouver Island coast to fake bands on Spotify, this episode explores the divide between the physical and digital economy, and what lumber markets, managed forests, and ...

10 Sep 202522min

Why Central Banking Is So Hard and Why Fed Independence Matters

Why Central Banking Is So Hard and Why Fed Independence Matters

Central bankers set policy with incomplete information, unobservable targets, and constant trade-offs between growth, inflation, and employment. In this episode, we delve into how the fight for Federa...

27 Aug 202524min

How To Invest During a Bubble

How To Invest During a Bubble

From the dot-com boom to today’s AI frenzy, bubbles follow a familiar script. This episode explores how to recognize them, what sustains them, and how to position your portfolio without getting swept ...

20 Aug 202521min

Six Principles for Thriving Under Uncertainty and How Big Tech Is Doing the Opposite

Six Principles for Thriving Under Uncertainty and How Big Tech Is Doing the Opposite

A practical framework for making better decisions, managing risk, and finding opportunity in unpredictable environments. We contrast these principles with the massive $2.9 trillion AI data center buil...

13 Aug 202525min

Why Most Hedge Funds Fail but This One Didn’t with Dave Thomas

Why Most Hedge Funds Fail but This One Didn’t with Dave Thomas

Dave Thomas, CIO and Founder of long/short hedge fund, Atalan Capital Partners, shares why most hedge funds fail and the keys to being a long-term successful investor.Episode SponsorDelete Me – Use co...

6 Aug 202539min

How To Better Navigate Money, Risk, Time, and Uncertainty with Carl Richards

How To Better Navigate Money, Risk, Time, and Uncertainty with Carl Richards

David converses with renowned illustrator and financial philosopher Carl Richards on the abstraction of money, attention capital, distinguishing risk from uncertainty, and the importance of taking mic...

30 Jul 202538min

Populært innen Business og økonomi

lydartikler-fra-aftenposten
stopp-verden
dine-penger-pengeradet
rss-penger-polser-og-politikk
e24-podden
rss-borsmorgen-okonominyhetene
pengepodden-2
livet-pa-veien-med-jan-erik-larssen
pengesnakk
finansredaksjonen
tid-er-penger-en-podcast-med-peter-warren
stormkast-med-valebrokk-stordalen
utbytte
morgenkaffen-med-finansavisen
liberal-halvtime
rss-sunn-okonomi
lederpodden
rss-markedspuls-2
rss-pa-konto
rss-investering-gjort-enkelt