Is Anyone Home Out There? Please Tell Me How This Ends Well

You know, when it comes to the corporate bond market and liquidity, there’s only so loud you can scream if no one wants to listen.

I’ve been in several positions over the years where I got to scream pretty loud (in terms of the size of the audience reached) and it still didn’t feel like the point was getting through to very many people.

Earlier this week, I penned what I think is a pretty damn good (not to mention pretty damn entertaining) post on the absurd contention that more trading between ETF investors somehow equates to better liquidity conditions. If you haven’t read that piece, please do. It’s well worth your time and it will hopefully induce a chuckle or three: “What Happens When You Have To Play That Piano Drunk? Or, The Most Absurd Thing I Heard All Day.”

For the purposes of this quick post, please have a look at the following two charts and tell me how in the hell this could possible end well…

(Charts: Morgan Stanley)