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Im still reading Yesterdays AFR, and there are a few very interesting articles about all the fear and the non liquid state of the markets at present.
Here is a just a short extract about the non liquid markets.
Drumbeats of a Looming Meltdown
from the AFR 20 oct 2014
Alan Mitchell
Economics Editor.
Public servants are not allowed to shout to get your attention, so they just keep repeating the message in the hope it will sink in.
The RBA Guy Debelle warned on Tuesday that low volatility would not last in the markets.
His warning follows a strong warning from IMF about the risks building in the Global financial markets which followed warnings from the RBA and other CB's.
This is strongly reminiscent of the repeated warnings from Central Bankers and other members of the Global Official Family about securitised SUB-PRIME- LOANS in the period before the GLOBAL FINANCIAL CRISIS.
We hope the counterparties know what they are doing , they repeated. Unfortunately , many did not. Debelle said the sell off could be violent not just because market makers will pull back rather than catch the falling knife as they have done before. Many investors he said have been buying assets on the presumption of market liquidity but that liquidity is not there.
