Mile Wide, Inch Deep, Bond Liquidity Drying Up

Mile Wide, Inch Deep, Bond Liquidity Drying Up
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Dan Fuss likes to describe the structure of the corporate bond market as resembling an ice cream sandwich: bonds change hands between the two crispy wafers on either side, but thereâ??s a fluffy layer in between that facilitates each transaction.

â??Itâ??s a good sandwich if thereâ??s a whole bunch of ice cream on the inside,â? says Fuss, a bond market veteran who runs the $21.9 billion Loomis Sayles Bond Fund. But in recent years, that creamy inner layer, commonly known by the less appetizing title of â??dealer,â? has been melting.

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