Gyroscopic Investing

I don't think I knew about the liquidity problems for selling treasury bonds into secondary market. I was just listening to this conversation about trouble in March 2020 when foreign markets were unloading treasury bonds.

https://www.youtube.com/watch?v=LaQhyd2h974


https://www.investopedia.com/terms/o/of ... suries.asp

Liquidity problems selling treasury bonds? Yikes!

This other Investopedia entry claims that long-term investors typically get a better deal by buying off-the-run Treasuries since they avoid paying the “liquidity premium” of on-the-run Treasuries:

https://www.investopedia.com/terms/o/on ... suries.asp

For what it’s worth, I’ve bought and sold dozens of off-the-run Treasuries over the past decade, and the trades have always executed within seconds. I didn’t encounter any liquidity issues.

In the video linked in the OP, it sounds like they’re saving the explanation of the reason behind the off-the-run Treasury liquidity problem that occurred in March 2020 until part 3.

It almost sounded like they were saying the foreign banks didn't have access to sell them into secondary market and had to sell them back to dealers.

Otherwise I would sure think there would be a price point that would create some liquidity because it was such a good deal.

I just found this paper that looks to be covering the trouble with treasury bonds in March 2020. I will have to look it over to see what they say was happening.

http://faculty.haas.berkeley.edu/vissin ... ds2020.pdf