Memorandum
I. The inversion
Liquidity describes the availability of funds over a short horizon. Solvency describes the capacity of a structure to meet its obligations across time.
Conflating the two replaces structural endurance with momentary access. The error is subtle, persistent, and rarely challenged.
II. Why the error persists
Liquidity is visible. It is quoted, ranked, and narrated. Solvency, by contrast, requires restraint, definitional discipline, and patience.
In environments dominated by cadence and commentary, immediacy is mistaken for durability.
III. Structural consequence
When liquidity substitutes for solvency, analysis proceeds under false assurance. Valuation arguments are constructed atop structures that may already be non-admissible.
The result is not merely error, but misclassification: endurance is assumed rather than established.
Boundary Statement
This memorandum does not provide operational criteria, thresholds, or computation. It establishes a categorical distinction only.
IV. Governance requirement
Distinguishing liquidity from solvency requires formal definitions and constraints. Absent governance, the substitution will recur regardless of analytical sophistication.
ABSA does not provide investment advice and does not solicit transactions. This memorandum is interpretive doctrine only.