Replying to Avatar π–‹π–Žπ–†π–™π–‰π–Šπ–“π–Žπ–Šπ–— (Β―`◕‿◕´¯)

Powell has been pumping rates for over a year. Why didn’t SVB convert their long term debt to shorter term earlier and waited till now? Doesn’t make any sense.
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preston 2y ago

I think they probably expected a recession by now, in which they would offload their longer duration debt when rates reset lower (I think all these banks are in the exact same boat, just a couple steps behind SVB).

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π–‹π–Žπ–†π–™π–‰π–Šπ–“π–Žπ–Šπ–— (Β―`◕‿◕´¯) 2y ago

SVB dumped their bonds now and took a 1.8B loss, who took the other side? If rates continue to go higher, wouldn’t they be faced with the same problem? Why would a 1.8B hole trigger a bank run on a bank with 200B in assets?

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Grand 2y ago

The person taking the other side - gets a discount.. there's lots of money out there believe it or not - but not a lot of opportunities to deploy it (bitcoin isn't an opportunity as it's the enemy of the current administration).