Bond Market Liquidity Did Great
Also social responsibility, McClatchy, Robinhood and retail investors.
So you buy a bond for $100, and then the market crashes, and you decide to sell the bond because you need money or you don’t like the risk or whatever, and you look around at the market carnage and you think “well hmm the market crashed so this bond is no longer worth $100, it’s probably worth $98,” and then you try to sell it, and no one will pay you more than $95 for it. There are two possible explanations. One is that the bond is worth $95, and your desire to sell it for $98 is just wishful thinking. The other is that the bond is worth $98, and no one will buy it from you for $98 because liquidity is bad. I bet I know which explanation you prefer!
“The ability to trade close to what investors think are market prices” is the best definition I have ever read of liquidity; it properly highlights the subjective element. “Investors have still found it difficult to transact at the prices they want.” Well, yes, that happens. If you are selling stocks this week, or buying Treasurys for that matter, you are not getting the prices you want.