Sep 30, 2019
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Creates a feedback loop - they successfully profit from an artificial set of variables – people buying ETFs pushes the market up - derives an artificial signal of future prices movements -
ETFs - their meteoritic rise - ETFs oftentimes oversell liquidity and diversification, attracting swathes of unaware, unfitting investors in the process.
Liquidity – two-fold
Signs of complacency and disconnect from fundamentals abound. So to sanity check, it may still be helpful to periodically remind ourselves of a few recent ones. In no particular order:
Easy monetary policy and bubble valuation in risky assets may similarly be at their endgame. A few more moves are left possible, but the degrees of freedom imploded, all the while as system pressures mounted on fragile markets.
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