Ablin had expected liquidity, the amount of money to borrow, spend in addition to also invest, to break down — yet of which never did. Instead, of which has actually enhanced.
“I thought was going to go negative about two months ago, yet, remarkably, largely on the back of these earnings reports, I suppose, liquidity reversed course. We’re actually square back within the middle of easy money again,” Ablin said.
He views slowing liquidity as an early warning sign of market trouble — giving the example of the indicator going negative four quarters before the 2008 financial crisis erupted.