From the Fed

we get news on their TSLF, or swap market. Now the banks will sell $75 billion in Treasuries to cover their cash needs. Then, they will be even more short Treasuries. Hmmm... can we see a problem developing here?

Of course! The TSLF goes for 28 days. At the end of that, the banks, who are always short Treasuries will have to buy Treasuries to swap back for their MBS. (Actually, the Fed will probably roll over the swaps, but let's pretend they don't.) At the same time that the banks are short Treasuries, the price of Treasuries is going sky-high. This is not a good combination for the banks.

I would not be surprised if companies were hoarding cash and even drawing down bank credit facilities to do so. Theroxylandr has made the following prediction on his blog:

What I think happened last week is a true run on the banks. The corporations are tapping the credit while they can. But while they don’t
really need those money they just put them on the money market, which goes straight to short-term treasuries.

Step two. Very soon we will have a very strong vested interest of various troubled institutions for treasuries to go down, because they are short. They are short not because they gamble the market, but because that’s how they
got money.

So, who else beside banks are short Treasuries? Hedge funds? How about dollar carry traders? Other banks? Who knows, but someone will probably get caught short.