UPDATE: El-Erian Says 'drama in the high yield market is notable in reminding us of three things that are of broader relevance'

• 1. The extent to which liquidity-dependent markets can overshoot both on the way up and the way down.
• 2. The fragility of market liquidity given limited willingness on the part of broker-dealers to provide their balance sheets in a counter-cyclical manner;
• 3. The extent to which some investors are subject to a liquidity illusion, if not delusion."

See Also: El-Erian: Rate Hike Part Of 'Loosest Tightening' In Modern History