Everyone is worried about the thing markets need most — but they’re not asking the right questions

People are worried about bond market liquidity. Barely a day goes by without someone adding to the chorus complaining about difficult trading conditions. Senior figures who have weighed in on the topic in the past couple weeks include former PIMCO chief Mohamed El-Erian, Federal Reserve Governor Lael Brainard, Mark Heppenstall, chief investment officer of Penn Mutual Asset Management, and Passport Capital investment chief John H. Burbank. The comments are so common that Matt Levine has a section in his daily email dedicated to detailing Wall Street's concerns with liquidity. There have even been ... READ MORE