Why, one might ask, was the UK pension issue causing such a ruckus in U.S. and global markets? First, liquidity is fungible globally, with de-risking/deleveraging dynamics sparking a rush for liquidity throughout international markets. Moreover, Market Structure issues are a global phenomenon. The same financial engineering used by UK pensions has been adopted in the U.S. and worldwide. The hundreds of Trillions interest-rate swaps derivatives markets are global and tightly interconnected. If a strategy falters in one market, kindred strategies are then in the crosshairs globally. A problem structure in any country quickly becomes a concern for all markets. And when blowups and panics spark illiquidity and discontinuity in one market, immediately all markets are on guard for similar blowups. When it comes to Market Structure, it is one monstrous global speculative Bubble.
Credit Bubble Bulletin