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What Will Cause The Next Market Crash?
Many Happy Returns
The Liquidity Problem in Financial Markets
Liquidity really means how much am I having to pay in terms of fees? And that goes up when the liquidity is low. It could just be that market makers are nervous, it could be that they're greedy and they can impose very high bid-off of spreads because they've got a monopoly. There are various reasons why these bid-offs of spreads blow out. So you get trillions, half a trillion traded daily for the treasury market. For example, people say it's not liquid, but all these things are relative. The liquidity problem is more to do with the cost of trading. That's always a problem. You can think of it as a kind of extractive tax on
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