File - The new European Central Bank (ECB) headquarters is pictured in Frankfurt January 21, 2015. REUTERS/Kai Pfaffenbach
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Investors used to thinking that vast quantities of cheap central bank money make financial assets a one-way bet have had a rude awakening in recent weeks, as that same conventional wisdom created frailties in the functioning of markets.It also convinced investors that prices, in both safe-haven bonds and riskier equities, would keep rising.Markets have become, in the jargon, illiquid.JPMorgan said one consequence of central bank largesse is that investors assume it ushers in a period of calm on financial markets.Investors though a 1 trillion-euro central bank bond-buying program that began in March would push yields ever closer to zero.JPMorgan estimated one investor could have traded 100 contracts of 30-year Bund futures in early 2014 without moving the market significantly.
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