[s1artibartfast]

I think you may be confusing FDIC actions.

One of the actions was a program to loan against the full value of long term assets at term price instead of current market value.

Maybe we are just quibbling over the definition of liquidity. long term treasuries and MBS can be easily sold, but you may take a substantial loss in doing so instead of holding to maturity.

[evancox100]

Not confusing the two, and maybe it is quibbling but changes in market value have nothing to do with liquidity as that term is used in finance.

Just because you can't sell a bond at par doesn't mean it is an illiquid market.