The shorthand that I have seen is that every actor in financial markets has a preference for cash/stocks/bonds/real estate/other things; the market equilibrium is when all of those preferences are satisfied. There can be dislocations to these preferences which cause "sloshing".

As an example - consider the sale of an owned house, where the buyer takes out a mortgage. The owner who sold now has cash, and the buyer has a liability (mortgage), meaning he has need for cash in the future. This type of mismatch can create excess liquidity (now, at the sale point), and the cash keeps moving until someone who needs to pay off a loan acquires it (cash gets "destroyed" when paying off asset-backed loans from the bank). In the meantime, that cash can go towards bidding up financial assets (until it finds the marginal need to service debt obligations)

This comment is the best explanation: https://news.ycombinator.com/item?id=34858813

Also this article could be helpful: https://www.philosophicaleconomics.com/2013/08/the-great-rot...

When there's less excess it doesn't "slosh", which is to say investments cause less damage because supply and demand reach equilibrium without as much disruption.

The metaphor is supposed to conjure an image of liquid smashing into something, as the money does when there's too much of it and it all tries to go to the same place.

I think the focus should be on the volume not the motion.

Investment moving from place to place is natural. Too much is disruptive.