In this environment, market liquidity declined for a number of assets. This was most obvious for the markets directly related to the core of the current turmoil, namely the market for subprime asset-backed securities (ABS).
During the turmoil, the problem of illiquidity however spread much further, first affecting other ABS and asset-backed commercial paper (ABCP), then mortgage-backed securities (MBS) and basically all structured credit instruments, such as collateralised debt obligations (CDO). The market for government bonds is the only fixed income market in which liquidity has remained fairly good.