Economics
Market Liquidity and Asset Price Bubbles
Quick fact
During the 2008 financial crisis, liquidity in many asset markets virtually disappeared, causing prices to plummet far below fundamental values because everyone tried to sell at once.
Why this is interesting
Imagine you buy a stock and it’s easy to sell quickly at a fair price. But one day, the market suddenly turns—nobody wants to buy, and prices crash. What just happened to the 'liquidity'?