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A New Age for Liquidity

In: Investing in the Modern Age

Author

Listed:
  • Rachel E. S. Ziemba

    (Roubini Global Economics, UK)

  • William T. Ziemba

    (University of British Columbia, Canada)

Abstract

In mid 2008, I wrote an article (Chapter 8), about sovereign wealth funds and other government pools of capital - arguing that they probably were not as big as their proponents hoped (or their detractors feared), in part because many of their estimated $2 trillion in assets were already invested (i.e., not liquid). The heavy (paper) losses of many of these investors on their equities and alternative has discredited some investment strategies even as these governments now need a lot more liquidity at home. In that way, sovereign funds are but one of several groups of investors, public and private, who are increasing demand for liquid assets, contributing to a major ow of funds into US treasuries and other government bonds. The motivations for this shift are twofold: investors that moved into cash have outperformed other asset classes and the end-holders of these investments need more liquid assets. Most significantly, the highly leveraged global growth and investment model is in the midst of a rethink…

Suggested Citation

  • Rachel E. S. Ziemba & William T. Ziemba, 2013. "A New Age for Liquidity," World Scientific Book Chapters, in: Investing in the Modern Age, chapter 9, pages 95-99, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789814504751_0009
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    Cited by:

    1. He, Xiufen & Liu, Yunong & Rehman, Ali & Wang, Li, 2021. "A novel air separation unit with energy storage and generation and its energy efficiency and economy analysis," Applied Energy, Elsevier, vol. 281(C).
    2. Peng, Hao & Shan, Xuekun & Yang, Yu & Ling, Xiang, 2018. "A study on performance of a liquid air energy storage system with packed bed units," Applied Energy, Elsevier, vol. 211(C), pages 126-135.

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