+ augustus Posted June 20 Share Posted June 20 (edited) 10 minutes ago, FrankR said: You are missing my point. The regulators had the information and enforcement tools. They did not have the willingness to use those tools for enforcement. They did not act because Washington told then to back off, and so they did. I know exactly the "point" you're trying to make. This happened in 2022-2023. Silicon Valley Bank used to lend out money in short durations. However, in 2021, they shifted to long-term securities such as treasuries for more yield, and they did not protect their liabilities with short-term investments for quick liquidations. They were insolvent for months because they could not liquidate their assets without a large loss. Has nothing to do with Dodd Frank as the Wharton professor stated in the New Yorker article you cited, but everything to do with regulators not doing their jobs in 2021-2022. Edited June 20 by augustus Link to comment Share on other sites More sharing options...
+ FrankR Posted June 20 Share Posted June 20 13 minutes ago, augustus said: I know exactly the "point" you're trying to make. This happened in 2022-2023. Silicon Valley Bank used to lend out money in short durations. However, in 2021, they shifted to long-term securities such as treasuries for more yield, and they did not protect their liabilities with short-term investments for quick liquidations. They were insolvent for months because they could not liquidate their assets without a large loss. Has nothing to do with Dodd Frank as the Wharton professor stated in the New Yorker article you cited, but everything to do with regulators not doing their jobs in 2021-2022. You brought up Dodd-Frank and said the failure was due to bad loans (quote below). Now you are saying it was bad investments by holding long term securities like treasuries and has nothing to do with Dodd-Frank? Which is it? 🤓 Or do you just enjoy a good rant? 5 hours ago, augustus said: It is atrocious that $70 billion of public money should have been spent on just these 3 banks, especially with the size of the National Debt. If a bank has crap loans on its books it is not the world's fault. Just liquidate the bank and let the bondholders and those depositors with over 250K eat the loss. Dodd-Frank was supposed to prevent this but apparently not. Business can protect its large deposits by investing in money market funds that invest in Treasury paper or having an account at a bank that sweeps all the money into a Treasury money market fund at the end of the day. The hedge funds had their money reimbursed with SVB! + augustus 1 Link to comment Share on other sites More sharing options...
+ augustus Posted June 20 Share Posted June 20 25 minutes ago, FrankR said: You brought up Dodd-Frank and said the failure was due to bad loans (quote below). Now you are saying it was bad investments by holding long term securities like treasuries and has nothing to do with Dodd-Frank? Which is it? 🤓 Or do you just enjoy a good rant? Ahhhhhhhhh....the immediate cause was their duration mismatch in assets and liabilities. Since then, we have learned that many of the loans were also bad HENCE THE LOSS OF $70 BILLION TO THE TAXPAYERS. Talk about rants. You are all over the place trying to shift blame for this. Link to comment Share on other sites More sharing options...
+ augustus Posted June 20 Share Posted June 20 The whole economy would have done far better by letting SVB fail, and letting the uninsured depositors, bond holders, hedge funds, VC firms etc. lose their shirts. That would have taught everybody a long-lasting lesson in how to manage risk wisely by managing your own affairs carefully. BSR 1 Link to comment Share on other sites More sharing options...
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