The Downside of Complacency: Illiquidity Evaporates Stocks and Real Estate
Confidence / complacency doesn't map the real world, in which liquidity dries up and markets go bidless.
When Alan Greenspan issued his mea culpa in late 2013 about missing the subprime mortgage implosion and the resulting Global Financial Meltdown (Why I Didn't See the Crisis Coming Foreign Affairs), he started by noting the complete and utter failure of everyone's sophisticated models to predict the collapse of confidence.
The core failure, he suggested, …
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