The hottest Market Liquidity Substack posts right now

And their main takeaways
Category
Top Finance Topics

Net Liquidity

The Dollar Endgame • 299 implied HN points • 05 Dec 23
💰 Finance Market Liquidity Financial system Central Banks
  1. Liquidity is more than just central bank reserves; it's about the available cash for trading financial assets.
  2. Global liquidity, different from traditional money supply measures, is crucial for funding transactions and rolling over debt in financial markets.
  3. Increases in liquidity drive up prices of assets like equities, bonds, and cryptocurrencies as more dollars chase the same investments.

Re-Funding the Treasury

The Last Bear Standing • 68 implied HN points • 02 Jun 23
💰 Finance Market Liquidity
  1. The U.S. Treasury has financial strategies in place to address debt ceiling concerns and maintain market liquidity.
  2. The Treasury plans to issue new debt to refill its Treasury General Account (TGA) and may impact bank reserves depending on funding sources.
  3. There is caution regarding the effectiveness of the plan as Treasury auctions are not selective, and market liquidity concerns persist despite RRP usage.

Corporate finance in illiquid markets

Musings on Markets • 0 implied HN points • 29 Dec 10
💰 Finance Corporate Finance Investment strategy Debt Management Market Liquidity Dividend Policy Corporate Finance Investment Market Liquidity Dividend Policy
  1. In illiquid markets, companies find it hard to access funds, which can limit their ability to take on new investments. Instead of focusing just on net present value, using a percentage return like IRR can help maximize their value.
  2. The mixture of debt and equity that minimizes costs can change in illiquid markets. If the equity market is less liquid, companies may want to increase debt, but if the debt market is illiquid, they might choose to decrease debt.
  3. Companies facing illiquidity may decide to keep more cash on hand instead of returning it to shareholders. This can lead to higher dividends and less reliance on stock buybacks, as investors favor cash during uncertain times.

All assets are illiquid

Musings on Markets • 0 implied HN points • 21 Dec 10
💰 Finance Investing Markets Economic Theory Asset management Risk Assessment Market Liquidity Asset Pricing Investor behavior Financial Theory
  1. All assets are considered illiquid, meaning they can't always be sold quickly at their current price without costs involved. This changes how we understand and measure the value of assets.
  2. Illiquidity varies between different asset classes, like real estate being less liquid compared to stocks and bonds. Some stocks are also more liquid based on their size and price.
  3. Investors care about liquidity because it affects asset prices and returns. Illiquid assets tend to have lower prices and higher expected returns, especially during market crises.
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