Raining Cash

If you haven't seen this "commentary" on global liquidity yet, it would be worth your time: Sam Zell. Cash continues to spur increases in many markets. However, today's WSJ mentions in column one of the Money & Investment section that perhaps "Investors might not be pushing up prices for assets like art or high-yield bonds because they have so much cash. They might be seeking out more and more cash so they can push up prices while the going is good. Once they lose faith in an asset class they'll turn tail and all of that so-called liquidity will turn with them. That's what happened in the copper market . . . [with] the price of copper [falling] 39% since May."

"By the same token, all that cash doesn't seem to be pushing up prices for Florida condos or oil anymore. 'Liquidity is an ex-post justification for why markets are going up,' says Dresdner Kleinwort's strategist Albert Edwards. 'There's lots of liquidity around -- well, there always is until there isn't, and then it just disappears.'"