Systemic Liquidity Risk and Bipolar Markets: Wealth Management in Today's Macro Risk On / Risk Off Financial Environment
“Clive does a great job of outlining the changes in investor behaviour in financial markets and volatility as a result of the financial crisis which started in 2007. He highlights clearly the changes in investor behaviour as a result of the skewing caused by central bank intervention and some of the breakdowns in the traditional risk on/risk off behaviour of previous eras. He also looks at how the policy response to the current crisis has led to a change in the concept of what we used to call safe haven assets in this new era of (ZIRP) zero interest rate policy and argues quite correctly that for capitalism to work properly the only solution to the current problems manifesting themselves around the world is for policymakers to make the hard decisions and let bankrupt institutions fail, and for bondholders to bear the consequences of their ultimately erroneous investment decisions.”—Michael Hewson, Senior Market Analyst, MSTA, CFTe CMC Markets UK PLC“Clive Corcoran has opened a door to the future of investment management.  With this book he has made the fat tailed Black Swan of the Great Financial Crisis into an understandable creature of logic.  He shows with objective analytical detail, yet with subjective clarity, how the assumptions of economic theory have failed to perceive the essential dynamics of markets.  This dynamism involves the rapid variation of correlations among asset classes, leading to repeated incidents of potential financial disasters, not just in the Great Financial Crisis but in more recent everyday market activity.  Clive shows with examples from current markets exactly the type of behavior which indicates the potential for dramatic market discontinuities such as the Flash Crash of 2010 and how the factors that make such events possible can be monitored in real time.  This is a book that will be an eye opener for hedge fund and investment managers, institutional asset managers and retail investors.”—John B. LounsburyPh.D. CFP, Managing Editor, Econintersect.com / Senior Contributor, TheStreet.com / Author, Seeking Alpha"Clive Corcoran's book is a rarity in finance. Most criticisms of conventional approaches to finance go no further than criticism. Corcoran's book also contains practical ideas about how to manage a portfolio in this most chaotic of markets."—Professor Steve Keen, Author, Debunking Economics: The Naked Emperor Dethroned“Clive Corcoran provides compelling empirical evidence that ‘market risk’ should not be disassociated from ‘liquidity risk.’ The reader may be surprised to learn that many market risk models used by institutional investors may not give sufficient attention to the probability of a rise in liquidity premiums. Through a myriad of real examples, Corcoran makes the case that, in a ‘risk-on/risk-off’ environment, those models may be insufficient. The financial system that has emerged after the 2008 crisis may benefit from a broader toolkit.  Rather than relying on any single approach, Corcoran presents many interesting analyses that may signal when it is time to load or unload risk.”—Marcos López de Prado, Ph.D., Global Quantitative Research, Tudor Investment Corporation CIFT, Lawrence Berkeley National Laboratory