And while global liquidity is still generous, it is rapidly shrinking as one central bank after another either phase out QE or engage in all out tightening.

However, not all is well in the markets where "rolling bear markets" have now become the norm as one asset class after another experiences a sudden, sharp liquidity shortage, and as Morgan Stanley's Hans Redeker writes this morning, often volatility divergence has been witnessed within late cycles. He recalls when liquidity concentrated in Japan from 1987-89, in the US during the 1999-2000 Nasdaq-boom, and then in the EMU just before the US subprime crisis in 2008: to Redeker, these liquidity concentrations were the result of tighter global liquidity conditions no longer covering all risk aspects.