Liquidity

One of my favorite change of pace writers is P.J. O’Rourke. He is a fellow libertarian who happens to be a great writer and humorist. In his book titled “Eat the Rich” he travels around the world examining different economic systems with the goal to figuring out why some work while some others fail. He goes to areas where socialism works, where it doesn’t work, where capitalism does not work, and naturally where it does work. Where better to go where capitalism works then to Wall Street? And so after experiencing the hectic lives and opposing points of views of traders he comes to this great epiphany:

“”What,” I asked all the Wall Street people I interviewed, “does the investment industry give to society?”
But this time they had an answer.
“Liquidity,” said the $2 billion money manager.
“Liquidity,” said the investment banker who’d described how men’s thoughts were on pecuniary B-girls.
“Liquidity,” said the other investment banker who’d told me things could move stupidly.
“Liquidity,” said the Irish specialist broker.
“It provides liquidity,” said David
Liquidity is the Wall Street word for having things you can do with your money and being able to do them. Liquidity is the essence of the free market…”

I follow economics so I understood what he was talking about but I did not appreciate it until I began to trade on tradesports. As far as gamblers go until now a liquidity problem was when you ran out of credit on all your local bookies. This is the key understanding gap that would bring in more people ot tradesports. More liquidity is good for all tradesports traders. Liquidity in tradesports provides information on future outcome of events, it provides more opportunities to trade, and most importantly it provides a convergence toward efficiency. If you are a gambler with limited experience in tradesports it is liquidity you want to focus on as it is the key to understanding how to make tradesports work in your advantage.

Had my fantasy football draft today, so I'm out of steam. Trying to win it for the 3rd straight year. In case your into Baseball Prospectus you should check out the web site by the guys who wrote Football Prospectus. It give a very interesting point of view into the sport of football.