The Liquidity Paradox

The inverted liquidity pyramid is a concept coming from Independent Strategy and illustrating the different levels of liquidity. Important to remember is that central banks cannot impact – or failed– on the most important layer: the top. The liquidity destruction in that department is still going on and no adequate instruments exist to stop this. As financial authorities never regulated these markets and risk appetite could flourish unbounded, nobody has an answer nor a solution ready to stop the liquidity implosion. These markets came to a practical standstill 18 months ago: no more prices, no more trades, the financial desert… and there seems no cure for the moment.
Not good at all…

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