Liquidity Quotes

“[T]he ABCP market was built on a fatal flaw: a significant mismatch between the duration of the underlying assets (long-term) and the duration of the paper itself (short-term). While this structure is not unusual -- banks use it all the time -- the crucial difference is that banks have a strong liquidity provider in the event of a problem: the Bank of Canada. The trusts, however, were left in limbo.”

“So why didn't ABCP investors -- at least the large institutional investors -- have a better grasp of the uncertain nature of market disruption triggers as defined under Canadian-style liquidity? Probably because the contracts were not available for review to investors wishing to purchase ABCP -- yet another example of the lack of transparency surrounding the distribution and sale of this product.”

“The failure of Lehman Brothers demonstrated that liquidity provision by the Federal Reserve would not be sufficient to stop the crisis substantial fiscal resources were necessary. ”

“Five hundred years ago the notoriously savvy Henry VIII discovered an elegant way to solve both his theological problems and his personal liquidity crisis —he dissolved the monasteries and nicked all their land.”

“I never use hedge funds because I am well aware of what drives future performance, and hedge funds start out with a great disadvantage in every major category: taxes, fees, risk management, transparency and liquidity.”

“Since the 1970S, financial innova­tions such as the securitisation of mortgage debt and the spreading of investment risks through the creation of derivative markets, all tacitly (and now, as we see, actually) backed by state power, have permitted a huge flow of excess liquidity into all facets of urbanisa­tion and built environment construction worldwide.”