Matt Levine, Columnist

Liquidity, Bankruptcy and Paperwork

Also overfitting, ICOs, and mayonnaise boardroom drama.

July 18, 2017 at 1:32 PM UTC

Matt Levine is a Bloomberg Opinion columnist. A former investment banker at Goldman Sachs, he was a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz; a clerk for the U.S. Court of Appeals for the 3rd Circuit; and an editor of Dealbreaker.

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People are worried about bond market liquidity.

If you are professionally worried about bond market liquidity, why not do something about it? Bond managers complain that banks are less willing to use their own capital to buy and sell bonds, which means that there is no one to buy when everyone else is selling or sell when everyone else is buying. So why shouldn't the bond managers themselves pick up the slack? After all, the banks have historically made a lot of money in the bond-dealing business. If they're getting out of it, shouldn't someone else get in?