We have seen a lot of narratives on liquidity driving the YTD rally. We think the consensus view of how to use and interpret liquidity in practice is incomplete. The below is an excerpt from our Feb 14th report to VP clients. We look at liquidity through VP’s lens of A) BCFI (business cycle financing index, a G20 policy diffusion) and B) Global Excess Liquidity (Global Real M1 Growth minus Economic Growth). Together they provide both a “quantity” and “breadth” measure of liquidity, giving a more complete picture of liquidity for the purposes of setting the cyclical (6-month) investment outlook.