Money For the Rest of Us

How The Covid Shock Nearly Destroyed The Financial System


Listen Later

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.

...more
View all episodesView all episodes
Download on the App Store

Money For the Rest of UsBy J. David Stein

  • 4.5
  • 4.5
  • 4.5
  • 4.5
  • 4.5

4.5

1,318 ratings


More shows like Money For the Rest of Us

View all
Investing Insights by Morningstar

Investing Insights

489 Listeners

Your Money, Your Wealth by Joe Anderson, CFP® & Alan Clopine, CPA of Pure Financial Advisors

Your Money, Your Wealth

773 Listeners

The Stacking Benjamins Show by StackingBenjamins.com | Cumulus Podcast Network

The Stacking Benjamins Show

1,963 Listeners

Radical Personal Finance by Joshua Sheats

Radical Personal Finance

1,878 Listeners

We Study Billionaires - The Investor’s Podcast Network by The Investor's Podcast Network

We Study Billionaires - The Investor’s Podcast Network

3,364 Listeners

Stay Wealthy Retirement Podcast by Taylor Schulte, CFP®

Stay Wealthy Retirement Podcast

557 Listeners

The Boldin Your Money Podcast by Steve Chen

The Boldin Your Money Podcast

182 Listeners

Bogleheads On Investing Podcast by bogleheads

Bogleheads On Investing Podcast

587 Listeners

Earn & Invest by Jordan Grumet (Doc G)

Earn & Invest

431 Listeners

The Long View by Morningstar

The Long View

883 Listeners

Sound Investing by Paul Merriman

Sound Investing

332 Listeners

Simple, but Not Easy by Morningstar

Simple, but Not Easy

84 Listeners

Excess Returns by Excess Returns

Excess Returns

65 Listeners

The Rob Berger Show by Rob Berger

The Rob Berger Show

151 Listeners

The Long Term Investor by Peter Lazaroff

The Long Term Investor

127 Listeners