Monday, March 20, 2023

Dems call for more "oversight". No penalty for current, clearly complicit "regulators".-----Clarice Feldman - You Can Bank on it: A Cheat Sheet on the SVB Collapse - American Thinker

You Can Bank on it: A Cheat Sheet on the SVB Collapse - American Thinker - By Clarice Feldman
"...Over at the Wall Street Journal, William L. Silber explains this better than anyone, and in terms anyone who ever purchased a government bond can understand. They are safe. The problem is liquidity:

SVB held tens of billions of dollars in long-term government bonds. On its face, this may seem like a prudent investment for a bank, but Treasury securities are riskless only when held to maturity. If you have to sell before then, you can easily lose money if market rates have risen since you first purchased the bond. For example, buying a 10-year U.S. Treasury bond with a 2% coupon at par and holding it for 10 years earns you 2% per annum. But if you sell early and rates have jumped -- say, 4% since you bought the bond -- then the price will have declined to about $838 per $1,000 face value, meaning you incur a loss of $162 per $1,000 bond.

The bank officers know, or certainly should know that is the case...
But even so the income from the bond is listed as income, allowing the bank officers and managers to reward themselves handsomely for the “profits” on investment. 
Now you’d think federal regulators would know this, and they probably did, but looked the other way, for which they seem not to be held accountable.
...But that’s not all there is to the story.
  • Woke Lending and the Biden Role in It...

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