Reply to SVB Bank Run: Fed Calling Emergency Meeting

Forum Index » Political Discussion

Reply to "SVB Bank Run: Fed Calling Emergency Meeting "

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]The taxpayers will ultimately backstop these bad bonds owned by banks without proper hedging protocol

[twitter]https://twitter.com/RepThomasMassie/status/1635316221108449280?t=TcxsbRBSNzolPcDVpeVkZw&s=19[/twitter][/quote]

Uh, only if the fed turns around and tries to sell the bond on the open market.  If they just hold it to duration (which they almost certainly will), then they haven't lost anything.[/quote]

Exactly.

It is amazing the legnths the right is going to right now to cause misinformation and uncertainty in our financial markets.

It's like they want a crash to hurt Biden.[/quote]

While there’s clearly right-wing noise (and a few folks yelling ‘fire’), fact is that they were going to be taking loses on long-dated assets regardless. HTM was never a viable path out of this, at least absent lower rates.[/quote]

I still don’t understand SVB’s strategy. They had a robust corporate treasury….wtf were they thinking? Everyone knew the Fed was about to embark on a long journey of interest rate hikes and SVB decided to load up on long dated assets after 3x their deposits in 18 months. They didn’t even try to hedge their interest rate risk with derivatives.

It like they did all of this on purpose. I still can’t figure it out. [/quote]

IME, solid finance knowledge (especially risk management) has been increasingly marginalized within a lot of financial institutions. This predates the 2008 collapse, but has actually gained additional traction since then.

And Silicon Valley (the place) has been in total denial about zero interest rates role in their putative boom. A local bank getting caught out isn’t all that surprising.

[/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics