Loading ...The Last Time Albert Edwards Saw “Nonsense” Like This Was 2008: This Is How It Ended
POOF! THERE GOES LIQUIDITY=In conclusion, and going back to the “tsunami of liquidity” theme that made this all possible, Edwards ends where he started with a quote from his Global Strategy Weekly from 2008 when the market thought EM and commodities had decoupled from the RoW. This is what he said on 5 June 2008,
“Too often at the height of a bubble, liquidity is used as an explanation. This is voodoo strategy. Much of the ‘liquidity’ that supports markets at the height of a bubble is merely investors leveraging up on the back of long-established price momentum trades (often in cyclical risk assets). And even as the fundamentals deteriorate, investors keep borrowing and investing. But like Wile E. Coyote in the Road Runner cartoons, reality eventually catches up and the ocean of liquidity evaporates overnight until the next cycle. Poof!”