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In business, economics or investment, market liquidity is an asset's ability to be sold without causing a significant movement in the price and with minimum loss of value. Money, or cash on hand, is the most liquid asset. An act of exchange of a less liquid asset with a more liquid asset is called liquidation. Liquidity also refers both to a business's ability to meet its payment obligations, in terms of possessing sufficient liquid assets, and to such assets themselves. From Wikipedia under the
GNU Free Documentation License  static.ibnlive.com 178px x 248px | 10.10kB [source page] Market crash french banking major BNP Paribas froze three of its prime funds citing liquidity concerns  marketoracle.co.uk 418px x 680px | 77.80kB [source page] leverage that contributed to considerable improvement in margins However leverage works both ways lower sales and high fixed costs will push margins to the other extreme Exhibit 9 Financials were responsible for 22 of the excess in margins as they benefitted from tremendous liquidity hosed down by the Fed over recent years now they are drowning in it Their margins  smfg.co.jp 250px x 380px | 7.30kB [source page] only once in many years stress tests At SMBC periodic stress tests are conducted to prepare for unforeseeable swings The Corporate Risk Management Department establishes limits on allowable risk for strategic equity investments and monitors the observance of those limits to keep stock price From Yahoo Image Search: "Market liquidity"  greenfaucet.com Jeff Miller Sun, 12 Jul 2009 15:10:44 GM They add . liquidity. to the . market. , acting based upon many sources of information about all conditions. Think "The Wisdom of Crowds." The Conclusion: There is very good evidence on this point, from some excellent sources. ...  forexmaestro.com Maestro Fri, 03 Jul 2009 13:32:08 GM Bear . Market. - A . market. distinguished by declining prices. Bid / Ask Spread - The difference between the bid and offer price, and the most widely used measure of . market liquidity. . Bid Rate - The rate at which a trader is willing to buy a ...  creditriskchronicles.blogspot.com Cormick Grimshaw Fri, 03 Jul 2009 12:06:00 GM Second, it has a positive effect on . market liquidity. . Provided that the CCP clears a sufficient number of asset classes, the usage of a CCP for OTC derivatives may allow a member to free capital for other purposes, as less collateral ... From Google Blog Search: "Market liquidity"  news.google.com Plastics Today Spot- market liquidity has generally been sluggish in October, according to traders reporting, but more buyers were seen returning to the market to cover ... news.google.com BusinessWorld Online This is an indication that liquidity will prevail and government borrowing requirements won't come in the near future," said Export and Industry Bank ... news.google.com PR-CANADA.net (press release) Well managed consolidated data is a key means to help drive efficient trading and market liquidity . We are delighted to be working with Canadian ... and more » From Google News Search: "Market liquidity" USA economy in recession would have its effect ,on capital markets and liquidity? Q. in that case what should be the investment policy , should I invest in russian stocks gas and energy , eastern europe real estate ? Asked by Success & Money - Tue Feb 19 07:55:28 2008 - - 1 Answers - 0 Comments A. If the US goes into a recession, the odds of the rest of the world going into a slowdown or even a recession are fairly high, as the US is one of the major superpowers. Therefore, there isn't much added benefit to investing overseas. I would suggest purchasing typical late cycle stocks that will pay you strong dividends and not be subject to the slowdown. Utilities, consumer staples, healthcare and other non-cyclical industries would all be best in this scenario. I personally do not see a severe recession taking place, so I am buying stocks that have been beaten down due to fears of a potential recession, as their long-term outlook appears promising. Any oil-related company will lose market cap, as recessions reduce the demand for oil, [cont.] Answered by Brendan Prewitt - Tue Feb 19 10:07:26 2008 What does Liquidity in Share markets means? What is meaning of liquidity driven market? Q. What does Liquidity in Share markets means? What is meaning of liquidity driven market? Asked by vmpp - Wed Jun 14 05:40:57 2006 - - 5 Answers - 0 Comments A. a "liquid" market means that there are always plenty of buyers and sellers, so that shares can be converted to cash quickly at any time. This is a "good thing," because when market conditions are changing quickly, you may need to get out (or in) quickly to take advantage. With an "illiquid" market (some foreign markets may qualify) you may be forced to wait and accept a price that you don't want. Answered by Yardbird - Wed Jun 14 11:00:25 2006 Now that there is more liquidity in the eco what do we mean that credit spread have come down?
Q. In the financial markets we have seen liquidity situations improve significantly. We have seen the spreads come down; even the credit spreads come down to some extent at least. i dont understand exactly what is written Great answer Alvie, you clever boys make things so easy, i wish i had done eco in college, so i wouldnt be reduced to asking for help Asked by oops - Mon May 11 02:48:19 2009 - - 1 Answers - 0 Comments A. In finance, a credit spread is the interest rate spread, or difference in interest rate between different securities, due to different credit quality. The credit spread reflects the additional net interest an investor can earn from a security with more credit risk relative to one with less credit risk. Basically during difficult economic times, the risk of people and organizations defaulting on their debts goes up a lot. Which causes investors to sell the more risky debt securities and buy the less risky debt securities, such as the 3-month US Treasury bonds. And this causes the interest rates to go up a lot for risky debt securities and go down a lot for the safe debt securities. And this difference in the interest rate paid on… [cont.] Answered by Alvie - Mon May 11 08:17:31 2009 From Yahoo Answer Search: "Market liquidity" |
