{"id":7926,"date":"2015-05-08T05:52:39","date_gmt":"2015-05-08T10:52:39","guid":{"rendered":"http:\/\/olduvai.ca\/?p=7926"},"modified":"2015-05-08T05:52:39","modified_gmt":"2015-05-08T10:52:39","slug":"how-the-liquidity-delusion-leads-to-a-crash","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=7926","title":{"rendered":"How the Liquidity \u201cDelusion\u201d Leads to a Crash"},"content":{"rendered":"<h3 class=\"entry-title\"><a href=\"http:\/\/wolfstreet.com\/2015\/05\/07\/market-liquidity-delusion-leads-to-crash-when-selling-starts-buyers-evaporate\/\" target=\"_blank\">How the Liquidity \u201cDelusion\u201d Leads to a Crash<\/a><\/h3>\n<p>They were just about all there at the Las Vegas SkyBridge Alternatives Conference, or SALT: Daniel Loeb, T. Boone Pickens, and of course George Papandreou, who in March 2011 as Greek prime minister had produced one of the\u00a0<a href=\"http:\/\/wolfstreet.com\/2012\/12\/03\/ten-big-fat-lies-to-keep-the-euro-dream-alive\/\"><u>funniest official Eurozone lies ever<\/u><\/a>\u00a0when he reassured those that were being shanghaied into bailing out Greece: \u201cWe will pay back every penny.\u201d<\/p>\n<p>A couple of thousand others were there, including\u00a0John Paulson, who made billions after betting against bonds backed by subprime mortgages using credit default swaps. \u201cHedge fund stars,\u201d the\u00a0<a href=\"http:\/\/www.nytimes.com\/2015\/05\/07\/business\/dealbook\/salt-conference-draws-hedge-fund-stars-to-las-vegas.html\"><u>New York Times<\/u><\/a>\u00a0called them. One of these \u201cstars\u201d was Ben Bernanke who, in his function as Fed Chairman, has done more for these hedge funds stars than anyone else, ever, period.<\/p>\n<p>They all have one thing in common: They\u2019re going to ride this Fed-gravy-train all the way to the end. They\u2019re going to max out this rally in stocks and bonds and real estate and what not, though the oil-price crash has knocked a serious dent into their shiny veneer. And they\u2019re going to add to their gains to the very last minute, fully leveraged, fully aware that this won\u2019t last, totally cognizant that this is artificial and that its end is drawing closer. Then, at the first rate increase or whatever other sign they might see that the gravy train starts derailing, they\u2019ll jump off.<\/p>\n<p>That\u2019s the plan. In this overleveraged market, their twitchy fingers are going to hit the sell button all at once, assuming that there will still be buyers out there, that there will be enough liquidity in the markets to where they can get out without having to pay an extraordinary price, and before everyone else is trying to get out.<\/p>\n<p>&nbsp;<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>How the Liquidity \u201cDelusion\u201d Leads to a Crash They were just about all there at the Las Vegas SkyBridge Alternatives Conference, or SALT: Daniel Loeb, T. Boone Pickens, and of course George Papandreou, who in March 2011 as Greek prime minister had produced one of the\u00a0funniest official Eurozone lies ever\u00a0when he reassured those that were [&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":[175,195,238,303,305,431,481,487,534,661,662],"class_list":["post-7926","post","type-post","status-publish","format-standard","hentry","category-economics","tag-credit","tag-debt","tag-economic-crash","tag-fed","tag-federal-reserve","tag-interest-rates","tag-leverage","tag-liquidity","tag-monetary-policy","tag-qe","tag-quantitative-easing"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7926","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=7926"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7926\/revisions"}],"predecessor-version":[{"id":7927,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7926\/revisions\/7927"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7926"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7926"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7926"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}