Loading ...Which in turn opens up a whole new can of worms: instead of lack of liquidity at the single name bond level, the next bond crash would likely see the ETF sector go bid- or offerless, a “phantom liquidity” danger which Howard Marks has been predicting since 2015.
*****************************************
Meanwhile, the underlying bond market continues to shrink: according to JPM, only 32% and 41% of U.S. high-grade and high-yield daily trading volumes takes place in the cash bond market.
But what is more concerning is that while at least some bond traders are keeping an eye on the exit, the vast majority of the market has been lulled into complacency, with the CFTC reporting that the net short exposure for VIX has risen to the highest level since the February VIX debacle.
*********************************
Comment=What “Market Drop?” Fucking market hasn’t dropped in 10 years now. It’s All Bullshit!!!
***********************************