A New Age for Liquidity

Rachel E. S. Ziemba and William T. Ziemba
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Rachel E. S. Ziemba: Roubini Global Economics, UK
William T. Ziemba: University of British Columbia, Canada

Chapter 9 in Investing in the Modern Age, 2013, pp 95-99 from World Scientific Publishing Co. Pte. Ltd.

Abstract: AbstractIn 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…

Keywords: Hedge Funds; Sovereign Wealth Funds; Investment Agglomerations; Endowment Investing; Stock Market Crashes and Their Prediction; Global Economic Situation; Global Investment Strategies; Kelly and Fractional Kelly Wagering Strategies; Calendar Anomalies; Political Party; Time of Year Effects (search for similar items in EconPapers)
Date: 2013
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