The Fed does
not create liquidity, it onl...
My contentions are: Securitization does
not create liquidity, it only redirects it.
«@GaelicTorus It's my opinion that markets don't create liquidity; they reflect the native liquidity of the asset being traded $ $ #testidea Jun 14, 2012
They don't create liquidity, as much as steal liquidity from savers.
Not exact matches
The problem obviously is that the lack of any material
liquidity in the market combined with the recent correction
creates a risk that they may
not see the actual cash returns for the paper gains they already booked.
Not that investors seem to worry too much for now: Korean stocks hit a six - year high two days ago, riding a wave of global
liquidity created by central banks.
They do this first by depicting finance and rent - seeking privilege as part of the economy's real wealth -
creating process rather than as an extractive sector, and second, by, pretending that the financial problem is only a temporary
liquidity problem,
not a structural problem debt of debts that can't be paid — unless the government makes up the gap at the non-financial sector's expense.
What this does is give me
liquidity off my net worth whenever I need it, yet
not create any taxable income.
There are no
liquidity concerns, as you are
not purchasing any underlying assets and platforms / brokers can
create any number of different options which provides plenty of variance for traders to choose from.
The remainder of the developed world equity markets have
not fared as well even as its central banks have been very involved in
creating new rounds of
liquidity and driving their lending rates into negative territory.
The reason is that when investors are inclined toward risk - aversion, safe
liquidity is a desirable asset rather than an inferior one, so
creating more of the stuff doesn't provoke speculation.
Liquidity is
not magic; it can't be
created or destroyed — it just travels where it is needed.
Under normal circumstances, where a few defaults don't threaten the whole economic system, and the government is running close to a balanced budget, and the Fed isn't in a
liquidity trap that they themselves
created, there are relationships that are useful for analyzing value in the markets.
Eliminate Keynesian idiocy, and manage the economy sensibly, balancing the budget as a normal matter, and don't use government or central bank policy to moderate it, because that only
creates liquidity traps like the one we are in.
The result has been that the «resolution» of each of these financial crises
created massive amounts of high - grade excess
liquidity that was
not withdrawn when market order was restored and provided the fuel that would produce the next credit boom and bust.
Lower
liquidity usually results in a more volatile market and cause prices to change drastically; higher
liquidity usually
creates a less volatile market in which prices don't fluctuate as drastically.
The SEC
created this new rule because open - ended mutual funds are
not currently subject to requirements under federal securities law that requires them to manage their
liquidity risk.
Meanwhile, Merrill's Rich Bernstein has an interesting note out arguing that the Fed's 450 basis points of tightening «has
not yet severely impacted the U.S. economy» because the expanded use of credit derivatives has
created an alternative source of
liquidity.
Again, if you've known me for a while, you know that I believe that
liquidity can't be
created through securitization and derivatives.
Financing injects
liquidity, and
liquidity creates confidence in the short run, which can become self - reinforcing, until the cash flows can't support the assets in question, and then the markets become self - reinforcing on the downside, as buying power collapses.
Well, if there's
not enough
liquidity in the bond market to accommodate our desired investment, why
not create it synthetically through credit default swaps?
After all, how can all this excess
liquidity the Fed has been
creating for the last two years
not eventually translate into inflationary pressure?
As Noah Smith writes, this could
create a
liquidity crisis: «Liquidity in the ETF market might suddenly dry up, as everyone tries to figure out which ETFs have lots of junk and which ones don'
liquidity crisis: «
Liquidity in the ETF market might suddenly dry up, as everyone tries to figure out which ETFs have lots of junk and which ones don'
Liquidity in the ETF market might suddenly dry up, as everyone tries to figure out which ETFs have lots of junk and which ones don't.»
Which while providing
liquidity can cause problems, including reduced efficiency due to market spreads (paying middleman), and might
create volatility that a carbon tax does
not.
And diamond holders who have been unable to get a fair value for their stones benefit most, as the
liquidity, standardization, and transparency
created by CEDEX mean that they don't have to settle for low - ball offers from retailers and pawn shops anymore.
«Right in the middle of the Cash Flow stagnation, you have Bitcoin now,
not just
creating a new model for currency, but at the same time
creating a new
liquidity pool, that has been built on top of this vibrant, innovative economy, where now you see hundreds of startups,
creating thousands of jobs,
creating this incredible amount of innovation, in financial services, in cryptografie, in security, in distributed systems, in technology and we're only seeing the beginning of this.
Investors in a bitcoin ETF wouldn't be able to make purchases using Bitcoin but would be able to buy and sell it at its listed value, which would benefit the cryptocurrency economy by
creating more
liquidity in the market.
Exchanges have
not opened Bitcoin Cash for deposits and withdrawals,
creating liquidity issues for the coin.
An important point to note here is that Bitcoin Cash exchanges will be for - profit businesses, so if a sustainable revenue model for
creating liquidity on exchanges doesn't exist, Bitcoin Cash's future becomes less certain.
Lower
liquidity tends to result in a more volatile market (especially when large orders are placed), and it causes prices to change more drastically; whereas higher
liquidity creates a less volatile market, and prices do
not fluctuate as significantly.
Other settlement layers like Ripple, Stellar or the defunct Falcon Protocol don't actually move value and are no different than using a MySQL database... they are cryptocurrencies which may be better than bitcoin for payments but have no
liquidity and address none of the above - noted use cases regarding
creating decentralised fiat pegged cryptocurrencies, «great for banks but
not for remittance providers» says Bitspark.
The Investor's equity is trapped in the relinquished property because it is
not sold until after the replacement property is acquired which may
create liquidity or financing challenges for the Investor when structuring a Reverse Exchange transaction.