The Fed blew up a bank. Literally. SVB went broke because they were long treasury bonds!
This was not a market decision. This was a policy decision to be “tough on inflation.”
Discussion
very few understand this
And it dealt a heavy blow to “that crypto problem” too by striking the key bank to shitcoin empire.
The irony is they seemed to have initiated something much larger than they anticipated.
Tastes delicious yet tragic
They didn’t hedge the interest rates. Lots of people went bust longing bitcoin too. Hedging is a strategy you should probably use when holding other people’s funds
Obviously they are farthest out on the curve, but the fed was unpredictable enough for it to happen.
In reality, they blew themselves up by betting on interest rates