We have talked about today’s lack of liquidity before. For instance, The FED To Investors: Expect Panic And Illiquidity and Top Hedge Fund Manager: No Liquidity, Stock Market Shock Is Imminent.
Gary Cohn, Goldman Sachs president and chief operating officer is warning about liquidity as well. Although his view comes from a different angle, the outcome will be the same. That is precisely what has caused the 1987 crash. Watch the video below and decide for yourself.
I am maintaining my view for now. Should the market go through a rapid 15-20% correction, you will see any remaining liquidity vanish overnight. Leading to a possible flash crash. You can thank the FED for that.
Goldman Warns: Liquidity Can Quickly Become A Big Problem Google