The news from Wall Street recently is a bit scary. The $12.6 trillion money market — yes, the pool larger than the market capitalization of the world's top 10 tech giants combined — is now down to unsettling levels.

Several investment banks have recently issued intensive reports to warn that the core meaning is one: money is almost not enough.

This sounds abstract, but the logic is actually very straightforward. The reserves in the bank's hands are being depleted rapidly, just like the cash in your wallet is getting less and less, and you can only find someone to borrow everywhere in case of emergency. The question is who lends to whom when the entire financial system is short of cash?

What's worse is that the cost of borrowing money is soaring. Overnight lending rates have been rising, and the good days of low-interest financing in the past have become memories. The cost of capital for institutions and enterprises has risen sharply, and there are fewer and fewer that can be carried.

Another detail worth noting: this is the first time since the Fed started reducing its balance sheet that it has encountered such a serious liquidity crunch. In other words, no one knows what will happen next because it has never happened before.

When everyone in the market is staring at the same number – bank reserve balances – anxiety is contagious. Once a certain tipping point is broken, the ripple effect may come faster than imagined.

The end of the year is a time of tight funds, and coupled with this structural problem, the fluctuation of risk assets may be difficult to avoid. Whether it is the stock market or the currency circle, you need to be extra careful in the next period.