Hedge fund manager J. Kyle Bass, the founder of Hayman Capital Management, made an ominous observation about the markets.

Speaking at the SALT Conference in Las Vegas on Wednesday, Bass said: “If I was to draw an analogy to where we are today, comparatively speaking, to where we’ve been in the past, I think we’re in March or April 2007 in the context of the credit and equity markets.”

This was the period that preceded the financial crisis, which led to the worst US recession since the Great Depression.

Bass, who shot to fame for his bet against the subprime housing market, noted that his fund closed all risk positions between July and December of last year in the credit and equity markets.

“It took us a long time, much longer to close some positions than I assumed we could close relatively easily,” Bass said, adding that “you better get things right.”

A number of hedge fund managers have been raising concerns about liquidity, or the lack of it. The idea is that if the market sells off, there won't be enough participants to take the other side of the trade, exacerbating the falling prices.

Fellow panelist Leon Cooperman, the founder of Omega Advisors, said earlier during the discussion that he thinks the market is not well.

“My observation is the market is reasonably fully valued, but the market is broken. The market structure that my father dealt with is different from the market structure I’m dealing with,” Cooperman said. He placed blame for the lack of liquidity on the Volcker Rule, Dodd-Frank, the elimination of the Uptick Rule, and the demise of the specialist system in the financial markets.

“I tell my people they should charge a million dollars for a marriage license and get divorced for free,” Cooperman said. “So before we do anything and buy anything we’ve got to really know what we’re doing because it can be very hard to get out. It’s a different environment.”

In other words, it's becoming harder to exit positions.

Macro fund manager Paul Brewer, the CIO of Rubicon Fund Management, said on the panel that liquidity for them has been fine, but they have seen some “peculiar air pockets” where it’s tricky to get out of positions.

“Actually, the price-makers are retreating. They don’t take risk anymore. And so, a lot of the trading is by appointment.”

Brewer later added that he thinks we’re approaching an important juncture as central bank policy is running out of traction. He thinks there will be a repricing at some point.

The question, of course, is when that will happen.

“I would say we’re sort of at equilibrium,” Ken Tropin, the founder of Graham Capital Management, said. “It doesn’t feel to me like the market is about to fall out of bed. I don’t see the psychology of the investor beings spooked. On the other hand, I don’t see anybody particularly confident.”

Tropin said he thinks we’re in a “boring cycle of waiting for information.” He added that the investment community has become more and more dependent upon quantitative easing from central banks around the world. However, there’s less ammuntion for those central bankers now.

Tropin thinks that we’ll see some risk-off trade of some significance, but he doesn’t feel like it’s on the short-term horizon.

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Julia La Roche is a finance reporter at Yahoo Finance.

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