there is clearly a material difference, yes, and, to be fair, I did say it’s not *as* stupid and not *as* fraudulent.
but closer inspection doesn’t paint a much rosier picture: there is no reason to believe these assets will retain their original value, against which they were leveraged on an already razor-thin equity buffer. SVB’s book in liquid securities is marked to market, not to expected future cash flow, so we really don’t know how much money they’ll recover. which of course ties right back to the absurdity of fiat because the original value obviously reflected their monetisation on account of artificially low rates. will that return? I have no idea, but it’s hardly prudent capital allocation to blindly assume the answer is yes.
also, ~10 years is an obscene amount of time to have hundreds of billions of dollars locked up in bankruptcy proceedings. *especially* the coming 10 years, over which I would strongly wager the dollar face value will go to shit in real terms (to whit, see above). that’s before even needing to invoke time value of money - it’s not even that there might be better assets with better return profiles to swap into in markets you used to think were liquid. it’s that you just don’t want these ones at all. it has turned into a 10-year zero-coupon, illiquid fixed nominal return. ew.
so in some sense you are right on a technicality. but in another, this is the absurdity of fiat banking in a nutshell: the losses *have always already happened* - they just aren’t evenly distributed.
