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Beyond the Banking Crisis: A Strategy Crisis

Umair Haque:

s what’s shaking the economic landscape just a simple banking crisis? Or is there – as so many feel, and as the tremors indicate – something more hidden just beneath the surface?

Let’s begin with a quick explanation from the ever-incisive Tyler Cowen. He notes:

"What is distinctive today is the drying up of market liquidity — the inability to buy and sell financial assets — caused by a lack of good information about asset values...Market prices have been drained of their informational value."

Bolding's mine - that's an excellent beginning.

But Tyler doesn’t talk about root causes: why have prices been drained of meaning, especially to an extent never seen before?

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