11 Mar 2023 10:46 am
Unfortunately, SVB’s situation is not unique.Thanks to rapidly rising interest rates, many other banks are also sitting on mountains of Treasury bills that have lost a lot of value…Trumprules » 11 Mar 2023, 12:37 am » wrote: ↑ Actually thats the fed dip **** private banks run the fed idiot.
For an extensive break down of why this is causing so much distress for our banks right now, I would highly recommend reading this excellent article.As I have been telling my readers, our system simply cannot handle higher rates at this point.But the “experts” at the Fed assured all of us that they knew exactly what they were doing.Now they have caused one of the biggest bank failures in U.S. history, and much worse is on the way if they do not reverse course.But I don’t expect the “experts” at the Fed to listen to any of us.They are just going to keep doing what they are doing, and we are all going to have to live with the consequences.Banks are big investors in assets like Treasury bills because they need lots of safe places to park their cash. Many financial institutions piled into these investments during a period of historically-low interest rates that spanned the early years of the pandemic, as banks took in tons of new deposits and lending was somewhat restrained.But now the Fed is hiking rates at a rapid clip, with Fed Chair Jay Powell warning earlier this week the central bank may have to speed up the pace of its rate increases to cool the economy further. The problem that creates for banks is simple: higher rates lower the value of their existing bonds.
http://theeconomiccollapseblog.com/2nd- ... than-2008/