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AI Driven Markets and Liquidity May Part Company!
Blain’s Morning Porridge August 17th, 2026
“Euphoria one day, the sound of banks crashing the next…”
The factor that’s enabled the extraordinary success and longevity of the AI bubble has been the willingness of the markets to finance it. What happens if the liquidity machine driving AI were to suddenly stop? As the limits of bond markets, private credit, and using insurance companies to park risk, become increasingly apparent – what would a liquidity event do to current markets? Ouch!
Key Takeaways:
Equities and bonds are diverging. Equities think the party continues. Bonds believe inflation…
The skinny
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