"because none of the banks sell what they hold, the price goes up; because the price goes up, more people make money on their positions; because they make more money on their positions they buy more stuff and don’t sell what they hold; and on and on forever"
That is until the bubble pops, those who got in late and can't sell will make a loss. The bid-ask spread widens, in particular there is glut of people wanting to sell at high prices, whilst there are few cautious buyers willing to offer lower prices.
That is until the bubble pops, those who got in late and can't sell will make a loss. The bid-ask spread widens, in particular there is glut of people wanting to sell at high prices, whilst there are few cautious buyers willing to offer lower prices.