Are We There Yet?

If I asked you the question: When is the liquidity in a sink truly empty?
What would be your answer?

1. When the water that was at the top is gone and it’s bone dry?
2. Or, when all the that water that was at the top has drained and there’s only a small residual puddle left next to the drain?

Here’s the thing – both can be right. The issue of “bone dry” simply helps clarify that there’s absolutely no water remaining and would be needed to know if one was resurfacing the inside of the sink per se. However, if “bone dry” was just being used as a metaphor to relate that all the water that was in previous has since been drained. That too could be used and correct. Both have their place, both have their nuance for context, both are usually used by the ones knowing full well what the term is meant to convey in the situation used.

As of last night (Tuesday) the following report of liquidity via The Federal Reserve’s Overnight Repo facility, the most important facility as to whether or not markets function as intended, as I keep banging my keyboard to ever the more deaf ears, was “bone dry.” To wit:

What happens next is anyone’s best guess, just like which is correct, 1 or 2?

© 2025 Mark St. Cyr

Note: This commentary is for education purposes only and is not to be construed as trading or investing advice of any sort. These commentaries/opinions are for “big picture” discussion purposes only. Please read, or re-read the “About This Site” page for any questions or clarifications.