Nouriel Roubini, in one of his periodic essays in Project Syndicate, makes an argument for "severe market illiquidity." (illiquidity in italics in the original.)
Here's a worrisome paragraph: > Third, not only is fixed income more illiquid, but now most of these > instruments – which have grown enormously in number, owing to the mushrooming > issuance of private and public debts before and after the financial crisis – > are held in open-ended funds that allow investors to exit overnight. Imagine > a bank that invests in illiquid assets but allows depositors to redeem their > cash overnight: if a run on these funds occurs, the need to sell the illiquid > assets can push their price very low very fast, in what is effectively a fire > sale. > Read more at > http://www.project-syndicate.org/commentary/liquidity-market-volatility-flash-crash-by-nouriel-roubini-2015-05#0PrKfRLYfyrIVmPh.99 I've wondered about bond funds. They seem to be some sort of income averaging device, with little chance for capital gains, and with considerable risk for a bad outcome. Why not just buy a bond directly? Any bond market comments? Gene _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
