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That's a liquidity crisis, not insolvency. They were invested in long term maturity US treasuries! The safest asset there is (arguably)
by hackernewds 4y ago
That's a liquidity crisis, not insolvency. They were invested in long term maturity US treasuries! The safest asset there is (arguably)
- readthenotes1 4y agoThe income from them is safe, but the value of them is not. Same with their mortgage-backed securities.
- JumpCrisscross 4y ago> a liquidity crisis, not insolvency Ish. On a mark-to-market basis they had insufficient reserves. That's closer to insolvency than illiquidity. The mismanaged duration is closer to illiquidity. But not of the sort a lender of last resort could save them from.
- dwater 4y agoAll they had to do was freeze withdrawals for 10 years and it all would have worked out fine.
- doubleunplussed 4y agoRight. But that is exactly the distinction between being illiquid and being insolvent.
- OJFord 4y agoNo it isn't? Not having access to enough quickly enough is a liquidity crisis; not having enough even when it is all liquidated is insolvency.