![]() The assets countervailing those deposit liabilities for the banks…. ….worth hundreds of millions of dollars a piece. ….(and right now, it looks like, they MIGHT go all the way)…. the 10-year, determine all other rates)…. ….to raise interest rates, economy-wide…. (Now, what if EVERY bank marked its Treasuries to market? Last one out, turn off the lights! Obviously, they won’t… but, what does that do, to confidence in the banking sector?)īecause of the Federal Reserve’s campaign…. ….not some crappy, circa 2005 mortgage bonds…. ….have only a token amount, with the Fed. Have much, much more on deposit with the Fed, or with other banks…. Is at risk from these “ risky (LOL) investments.”īecause the “systemically important” ones…. (In fact, Treasuries were the required, defining asset of National Banks even BEFORE the Federal Reserve Act of 1913.) ![]() ….with another bank, or with the Federal Reserve…. (It APPEARS the bottom didn’t fall out, until the bank booked an “impairment” to its equity, acknowledging the degraded value of its Treasuries by “marking them to market”, rather than keeping them on the books at original value- remember this sentence.) ….have fallen below its liabilities ( deposits, plus, any outstanding bonds issued by the bank itself)…. ….the bank’s assets ( Treasuries, and loans outstanding)…. The bank is accused of having made “ risky bets.” ….asked me to comment on the Silicon Valley Bank (SVB) situation.
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