When they drain liquidity from the system, will this leave some exposed to a "crisis of confidence?"
I don't expect financial implosion to occur again, but it wouldn't surprise me if when they drain liquidity from the system, some players will be susceptible to a run. Even if a few go down (including reasonably sized banks), I don't think it will take us back to the point we were at last September.
That having been said, the only question in my mind is whether the Fed will step in and protect those entities under the gun. You can bet the market will test it.
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