Zortix matched this thesis to Rates & bonds ETFs as the exposure the bearish case argues against, most actionable for readers who already hold them. Not a recommendation.
Fiscal dominance drives desperate financial engineering
The thesis argued that 'fiscal dominance' - the Treasury's massive financing needs - is forcing desperate financial engineering, like promoting stablecoins to secure T-bill buyers and twisting the yield curve, which are band-aids on a growing debt problem.
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The Callback
DTCC canonical tokens threaten third-party equity wrappers
56 weeks between these two statements.
The research argued that stablecoin inflows, which are used to purchase Treasury bills, measurably compress yields on 3-month T-bills by 2-2.5 basis points for a two-standard-deviation flow.
The thesis argued that 'fiscal dominance' - the Treasury's massive financing needs - is forcing desperate financial engineering, like promoting stablecoins to secure T-bill buyers and twisting the yield curve, which are band-aids on a growing debt problem.