2 ms·

I tried reading a couple of articles but I'm missing the big picture. How much exactly are they in the hole? I presume they have assets and loans to call upon.

• noahtallen 4y ago
  From what I understand, they (SVB) won’t exist any more. The FDIC will give all of the depositors their money back, which will come out of the FDIC insurance fund. Then the FDIC will sell off all the SVB assets, and from their statement and other articles, they expect to get most (if not more) of the money back that they’d pay out to the depositors. That’ll go back into the FDIC insurance fund and SVB won’t exist any more. I don’t think anyone knows the exact math, partly because the assets are obviously illiquid. So you’re not like getting the full value of a bond, you’re just trying to get someone to buy it off you, which means the pricing is dynamic.
  • Gibbon1 4y ago
    I think their assets aren't illiquid, the problem is they pay out a low rate of interest. As in if I can buy a $1M bond that pays 5% interest. How much you think a $1M bond that pays 1.5% is worth. Much Less. In 2020 and 2021 about 2.7 trillion worth of mortgages were refinanced. That gives you an idea of the scale of the problem with the Fed blithely raising rates.