the.com/liquidity
the difference between owning a yacht and selling one fast enough to make rent
means how easily an asset can be turned into cash without crashing its price — cash itself being the most liquid thing of all.
from From Latin 'liquidus' (flowing, fluid), via 'liquere,' to be liquid — the same family that gives us 'liquid' and 'liquor.' The financial sense borrows the metaphor wholesale: money that 'flows' freely is liquid, while a yacht or a building is 'frozen' or 'locked up' until someone melts it back into spendable cash. The accounting use of 'liquidity' as the cash-readiness of assets is a 19th- to early-20th-century development of that watery image.
- cash king
- Most liquid asset on Earth, no waiting required
- crisis maker
- 2008 froze when banks stopped trusting each other
- market depth
- Big trades barely move highly liquid prices
- trap word
- Liquidity dries up exactly when you need it
- spread tell
- Bid-ask gap reveals how liquid something truly is
silicon valley bank collapse — svb failed in march 2023 when depositors rushed to withdraw funds faster than assets could be liquidated
forex market — $7.5 trillion daily trading volume makes it the most liquid financial market globally