Market liquidity has reverted back to pre-global financial crisis levels, whereas liquidity risk has actually increased


market liquidity has reverted back to pre-global financial crisis levels, liquidity risk has actually increased

Source: New York Fed

  • This disparity has resulted in wider bid-ask spreads and an inability to easily sell a position.
  • In other words, liquidity is there but when you (and everyone else) need it, it may cost you.
  • Time for another bubble!

 

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