{"id":42096,"date":"2018-12-30T09:20:29","date_gmt":"2018-12-30T14:20:29","guid":{"rendered":"https:\/\/olduvai.ca\/?p=42096"},"modified":"2018-12-30T09:20:29","modified_gmt":"2018-12-30T14:20:29","slug":"what-is-behind-the-markets-record-liquidity-collapse-2","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=42096","title":{"rendered":"What Is Behind The Market&#8217;s Record Liquidity Collapse"},"content":{"rendered":"<div id=\"block-zerohedge-page-title\" class=\"block block-core block-page-title-block\">\n<h3 class=\"page-title\"><a href=\"https:\/\/www.zerohedge.com\/news\/2018-12-29\/what-behind-markets-record-liquidity-collapse\"><span class=\"field field--name-title field--type-string field--label-hidden\">What Is Behind The Market&#8217;s Record Liquidity Collapse<\/span><\/a><\/h3>\n<\/div>\n<div id=\"block-zerohedge-content\" class=\"block block-system block-system-main-block\">\n<article class=\"node node--type-article node--view-mode-full\" role=\"article\" data-gtm-vis-recent-on-screen-2077925_22=\"1168\" data-gtm-vis-first-on-screen-2077925_22=\"1168\" data-gtm-vis-total-visible-time-2077925_22=\"100\" data-gtm-vis-has-fired-2077925_22=\"1\">\n<footer class=\"node__meta\">\n<div class=\"submission-wrapper\"><\/div>\n<\/footer>\n<div class=\"node__content\">\n<div class=\"clearfix text-formatted field field--name-body field--type-text-with-summary field--label-hidden field__item\">\n<p>One week ago, when we first previewed this week&#8217;s <a href=\"https:\/\/www.zerohedge.com\/news\/2018-12-21\/brace-seismic-volatility-pensions-buy-record-60bn-stocks-coming-days\">infamous $60 billion pension fund rebalancing <\/a>out of equities and into bonds which resulted in historic market gyrations, and a violent snapback in the S&amp;P from what was shaping up to be the worst December on record for stocks, we warned that while the buying would &#8220;finally be some good news for the bulls&#8221; however &#8220;<strong>the problem is that the sudden deluge of last minute buying may simply be too much for the market to handle, as <\/strong><a href=\"https:\/\/www.zerohedge.com\/news\/2018-12-20\/sp-liquidity-just-dropped-lowest-record\"><strong>liquidity has collapsed to the lowest level on record<\/strong>&#8220;<\/a> and as a result <a href=\"https:\/\/www.zerohedge.com\/news\/2018-12-20\/sp-liquidity-just-dropped-lowest-record\">&#8220;<\/a>investors and traders looking for a desperately needed respite from market gyrations may have to deal with yet <strong>one more &#8220;seismic bout&#8221; of volatility<\/strong>.<a href=\"https:\/\/www.zerohedge.com\/news\/2018-12-20\/sp-liquidity-just-dropped-lowest-record\">&#8220;<\/a><\/p>\n<p>That&#8217;s precisely what happened, and while many are still trying to understand the cause behind last week&#8217;s market violence which prompted comparisons to watching the cult classic <a href=\"https:\/\/www.zerohedge.com\/news\/2018-12-27\/investors-are-speechless-its-watching-pulp-fiction\">Pulp Fiction<\/a>, where chaos is the only constant, the bigger problem that has emerged is a far greater one: <strong>how does one trade in a market in which, as we <a href=\"https:\/\/www.zerohedge.com\/news\/2018-12-20\/sp-liquidity-just-dropped-lowest-record\">showed last week<\/a>, liquidity has dropped to the lowest on record? <\/strong><\/p>\n<p><a href=\"https:\/\/www.zerohedge.com\/sites\/default\/files\/inline-images\/barcl%20liquidity%20low.jpg\" data-image-external-href=\"\" data-image-href=\"https:\/\/www.zerohedge.com\/sites\/default\/files\/inline-images\/barcl%20liquidity%20low.jpg\" data-link-option=\"0\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.zerohedge.com\/sites\/default\/files\/inline-images\/barcl%20liquidity%20low.jpg\" srcset=\"https:\/\/www.zerohedge.com\/sites\/default\/files\/styles\/inline_image_desktop\/public\/inline-images\/barcl%20liquidity%20low.jpg?itok=9Xn2Tv9a 1x\" alt=\"\" width=\"500\" height=\"300\" data-entity-type=\"file\" data-entity-uuid=\"0a4546ee-829c-492e-bc70-27b66a6c2044\" data-responsive-image-style=\"inline_images\" \/><\/a><\/p>\n<p>Practically speaking, the problem is simple as Bertran de la Lastra, CIO at Bestinver Gestion summarized: &#8220;If you go into the large caps and you try to do a significant trade &#8211; let\u2019s say in a big fund company of $200 billion you\u2019re trying to do a $50 million clip, a $100 million clip \u2013 you should be able to do it fairly quickly.&#8221; However, &#8220;<strong>the reality is that you may have to be working on it for a few days.&#8221;<\/strong><\/p>\n<p>\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>What Is Behind The Market&#8217;s Record Liquidity Collapse One week ago, when we first previewed this week&#8217;s infamous $60 billion pension fund rebalancing out of equities and into bonds which resulted in historic market gyrations, and a violent snapback in the S&amp;P from what was shaping up to be the worst December on record for [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1849,487,7533,2773,4318],"class_list":["post-42096","post","type-post","status-publish","format-standard","hentry","category-economics","tag-financial-markets","tag-liquidity","tag-pension-funds","tag-volatility","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/42096","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=42096"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/42096\/revisions"}],"predecessor-version":[{"id":42097,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/42096\/revisions\/42097"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=42096"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=42096"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=42096"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}