3 ms·
The FDIC has taken control of the bank. In their last bond offering SVB lost 1.8bn$ from a 21bn$ sale. 8.5% seems like more than a haircut... and 8+% to get the
by omgJustTest 4y ago
The FDIC has taken control of the bank. In their last bond offering SVB lost 1.8bn$ from a 21bn$ sale. 8.5% seems like more than a haircut... and 8+% to get the money you need now is a steep cut that will result in larger consequences.
8% might seem like a stubbed toe, but these are _bonds_. You aren't suppose to lose anything. 8% inflation, 8% from bank failure and add-on the additional losses from non-bond related issues... S&P500 at 1% for the year but from mid-2021 it is down nearly 10%.
- phphphphp 4y ago8% represents, what, a month of runway for most startups? That’s not an extinction level event, it’s a stubbed toe.
- deleted 4y ago[deleted]
- JohnFen 4y ago> but these are _bonds_. You aren't suppose to lose anything. If you hold them to maturity. If you sell them early, not so much.
- geraldwhen 4y agoHuh? Bond prices fall in response to rising rates, and it’s pretty clear why. The mechanism is straightforward.