Why Liquidity Matters

“The bond market will crack.”

That’s what Jamie Dimon said last week at the Reagan National Economic Forum.

“I just don’t know if it’s going to be a crisis in six months or six years… I’m hoping we change both the trajectory of the debt and the ability of market makers to make markets.”

If you don’t know Dimon, you probably have a credit card or checking account with him. He’s been the CEO of JPMorgan Chase for over 20 years. He sees the financial system—and the American consumer—more clearly than almost anyone else. So when he talks, I listen.

We’ve covered the national debt issue recently, so let’s skip that, but the second half of his quote is the one to focus on now:

“...the ability of market makers to make markets.”

If market makers can’t function, asset prices fall. Buyers disappear—and suddenly your net worth becomes temporarily theoretical.

Translation: your liquidity matters.

Liquidity is your ability to convert your assets, your time, or your talents into usable value.

When you are liquid—you feel wealthy.

When you are not—you feel tight.

It’s that simple.

Wealth isn't just about what you have—it's about how easily you can use it.

This matters for institutions like JPMorgan, and it matters for you.

Take Chipotle. Last week I wrote about how the average store generates $3 million in annual revenue at 20% margins.

Let’s say management wants to open 40 more stores across Texas—each costing about $1.3 million. That’s a $52 million expansion plan.

They could fund it entirely with cash. But more likely, they’ll put up $10 million of their own capital and borrow the rest—say, $42 million at 6.25% interest.

With strong margins, the math works. The stores generate $120 million in new revenue and about $24 million in profit. Chipotle will easily out-earn the cost of capital.

But cut those margins in half? Suddenly, bankers get nervous. The cushion is thinner. The risk is higher. The deal slows, stalls, maybe dies.

Same company. Same ambition. Different liquidity profile.

That same math applies to you—especially if your retirement plan relies on illiquid assets, unpredictable cash flow, or rising expenses.

This isn’t theoretical.

Here’s a real-world example:

Punta Gorda Listings on June 2nd, 2025

This is what current home listings in Punta Gorda, Florida look like. My three year old son, Bode, would have no problem telling me there’s a lot of red there. Sellers in this community are trying to turn real estate into liquid capital (cash). But waves of new listings are hitting the market, causing it to be one of the fast growing inventory markets in the country.

And when the market gets saturated with supply, there are only two options: cut the price to find a buyer, or wait it out.

Either way, your outcome is dictated by the market—not your terms.

Waiting costs money. Price cuts cost money. Either way, that directly impacts a person’s financial life.

The issue gets magnified when more market participants need liquidity, as we are seeing here in Punta Gorda.

Everyone is trying to get out before the bottom falls out.

Liquidity is what keeps you from being forced to act under pressure.

It lets you hold. Wait. Breathe.

When liquidity disappears, fire sales happen. That’s when good people are forced to tough financial decisions.

And the people who have liquidity, scoop up great deals on good assets.

This scenario is what Jamie Dimon is warning about. If market makers lose their ability to make markets, then liquidity in the system evaporates. And when liquidity evaporates, the people who didn’t prepare get starved for cash flow.

When liquidity dries up—whether it’s in public markets, real estate, or your own portfolio—there’s little time to adjust. The decisions you can make come from planning you’ve already done.

Liquidity is less about reacting in real time and more about preparing ahead of time.

If you want to stay in control, the work starts now.