Speaker argues that violent downward market moves are necessary to 'reset' liquidity: such moves bring in return liquidity and stop the continued organic growth of liquidity that would occur during consolidation near market tops. Without a shock, liquidity could keep building indefinitely, so a sell-off is framed as a corrective mechanism to halt that process.
This move is very, very necessary. There's so many movements, operations, calculations, algorithms, all making a composite perfection. Right? This move, what it does is it brings in the return liquidity that's needed to get back here, and it cuts off the organic growth of the liquidity. As long as the market was doing this consolidation near the top, you keep continuing to have indefinite liquidity. So at some point it has to cut off. We just can't keep building more liquidity forever. It won't do that. Right, so this violent move down shocked this new liquidity from continuing to organically grow, right?
