SEC and Justice Department reportedly investigating SVB's collapse, including insider

[NewsFeeder]

SEC and Justice Department reportedly investigating SVB's collapse, including insider stock sales

The probes are looking into the stock sales that SVB executives' conducted ahead of the tech-focused bank's collapse.

More @ CNBC...

 

[Boghie]

Here's what apparently caused the collapse of SVB:

1. They bought Treasuries as a funding backstop - they could sell them if needed
2. The Federal Government induced inflation through various policies
3. The FED started raising rates to get control of the inflation
4. SVB started to have to sell their Treasuries at a loss
5. Large clients saw this - likely on the SVBs balance sheet - and starting pulling their money out
6. Other clients got wind and started to pull their money out
7. SVB had to sell a large traunches of their Treasuries
8. Rise and Repeat

You know, there are nations that backstop their currencies on Treasuries. That is what is meant when they say the South Korean whatever is 'pegged' to the US dollar. If I'm not mistaken, the Chinese whatever is 'pegged' to the dollar. I wonder how many other banks bought long(ish) term Treasuries because the return of short term bonds was so miserable. This could be fun for the whole family.

And, you know what - the FED will continue to fight the Treasuries inflationary actions. Otherwise, our savings will be crap. That is, our TSP will be crap when we need it.

 

[nnuut]

Is it to late to GET OUT?????

 

[Boghie]

Is it to late to GET OUT?????

Where you gonna go NNuut ;damnit

Heck, entire countries backstop their currencies on US Treasuries. As interest rates rise the value of those Treasuries drops. That is the beauty of the Bond market - it can be moved by fear/greed like equities markets, but they recover quickly because their prime factor is simple math. However, in this instance math is going against them.

Just gotta ride it out. It will be equities that will recover the firstest and the mostest. But, when Gubmint actions are inflationary then the FED has to be deflationary. Zen, Budha balance

 

[nnuut]

I'm with the "G" Fund for a long time!