The clouded future of the fixed income market

Liquidity in the fixed income market has all but dried up and with no end to the crisis in sight, what does the future hold?

There is an old adage in the fixed income market - "you could get a bus through that spread!" - which is used when a salesman accuses a trader (in good humour, of course) of making a wider-than-usual bid to offer price spread. This refers to the difference between the price at which he is prepared to buy the bond, and the price at which he is prepared to sell. This expression could never have been more relevant or appropriately used than in today's environment. Indeed, in some instances, one would be fortunate to be quoted a price. Like a shallow brook in the summer, the fixed income mark...