The bank was unable to lend out these funds at the same frantic pace with which they came in. Instead, the company invested in long-term debt securities related to government bonds and US mortgages.
Long term for the yield. But, of course, that maximises losses when rates rise. Which is actually what killed them.
BTW shows the Spudtastic value of investing in government bonds, dunnit?
What kind of genius millionaire CEO of a bank goes on a conference call with terrified clients and uses the words “don’t panic” tho?
Was his name Ford Prefect?
Steve,
The same kind of CEO who sold $3.75m is stock in the last 2 weeks.
And I’ll bet that news came to the great surprise of precisely nobody.
BiND – You’re right, it isn’t a surprise.
The bank was unable to lend out these funds at the same frantic pace with which they came in.
Clearly the journalistic filter may be to blame for the apparent nonsense but since when is a bank obliged to accept deposits and to pay interest on them? Overnight swissy has been known to fall to negative rates after all.
Story explained by Bing AI in terms of monkeys and bananas.
https://twitter.com/skirano/status/1634327114634743811?s=61&t=VX5cJ0-osgn_JSz7j-uowQ
I think I gotta get me some of the anti-cramer ETF:
2nd Feb:
Cramer promotes SVB:
https://www.youtube.com/watch?v=gdg2AD0pouY&t=431s
2nd March:
https://www.thestreet.com/etffocus/blog/inverse-cramer-etf-is-live
10th march:
SVB collapses……