One dirty word keeps popping up as Wall Street weighs the next market crash — and it should strike fear into the hearts of investors everywhere

trader market crash

  • For months, one dirty word has been popping up across Wall Street commentary.
  • It relates to how difficult it’s become in certain markets for investors to transact without distorting prices.
  • Red flags have been popping up in various asset classes worldwide, and fortunately, Wall Street has some trade recommendations to help investors get in front of them.

What use is a killer trade idea if actually executing it is like pulling teeth?

This is a question investors will likely have to start asking themselves, if they haven’t already.

At the root of the issue is a dirty word that’s been showing up in Wall Street commentary with frighteningly increased regularity: liquidity.

For context, when these experts discuss the subject, they’re referring to the lack of liquidity — and the myriad problems created when investors are unable to trade without distorting markets. When liquidity is constrained, volatility increases. And when price swings get crazier, that’s when huge losses happen.

And no matter where you look in the market, liquidity is evaporating. This is especially true in the US, where Federal Reserve tightening measures are quite literally siphoning off the supply of fresh capital. As other global central banks look to end accommodation, the situation will compound.

Examples all across the global marketplace

Perhaps the best recent example of low liquidity in action comes courtesy of …

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