Market Talk – April 30, 2024
ASIA: The major Asian stock markets had a mixed day today: NIKKEI 225 increased 470.90 points or 1.24% to 38,405.66 Shanghai decreased 8.22 points or -0.26% to 3,104.82 [...]
Liquidity Crisis
QUESTION: I have attended the last 2 conferences and you have said the “liquidity” in the stock market will become tighter coming into 2020 and that there will be less stocks available to buy. Does that have something to do with this inflow of capital from Europe as people become more aware? I read your article about the Emerging Market crisis with great interest and remembered what you said. Is there more information you can share with us on this topic?
CDH
ANSWER: Since Quantitative Easing has failed, capital was driven into non-traditional investments to simply try to earn income. There were institutions buying farmland just to lease it out to get 5% annual income. Others ran off into Emerging Markets. Spanish banks are heavily invested in Turkey. The problem is that this trend has caused a liquidity crisis insofar as capital has been invested in assets that are not liquid. Add to this corporate buybacks that are reducing the supply of stocks available.
All I can say is thank God for Socrates. There are so many global trends emerging that by themselves are confusing and would be impossible for a standard domestic analysts to forecast from a personal interpretation perspective. The combination of investment shifts into real estate, Emerging Markets, and corporate buybacks have created an interesting risk factor for liquidity during a financial panic.
Latest Posts
Don’t Come to Norway – Taxing Our Way into 2032
In 2021, the Extreme Left Labour Government seized power in Norway, overthrowing the eight years of Conservative rule. Labour won 48 of the 169 parliamentary seats, one less than in [...]
Milton Friedman Explains Why Stakeholder Capitalism Fails
What brought thousands of people together to create something as simple as a pencil? Some may be familiar with the late economist Milton Friedman’s popular analogy of how a mere [...]
California’s Exit Tax
People have been leaving California in droves due to Governor Gavin Newsom’s socialistic Utopia that demands everyone be taxed on every penny they earn. I’ve long warned that California was [...]
