3 ms·
You're wrong, and it's easy to show why: SVB executives did NOT have to load up on high-duration bonds! They were under no obligation to do that. They CHOSE t
by cs702 4y ago
You're wrong, and it's easy to show why:
SVB executives did NOT have to load up on high-duration bonds! They were under no obligation to do that.
They CHOSE to do it because they wanted to increase interest income and earnings in the short run.
They could have easily purchased a lower-duration mix of bonds. Instead, they gambled the bank on a bet that long-term rates would stay at historic lows.
Once they made that bet, they could have easily hedged it every year, at a cost. Instead, they chose not to spend any money on hedging.
The federal government did not cause SVB's failure. SVB executives caused it.
- bsuvc 4y agoI am not defending SVB executives. Don't you understand the difference between deposit holders (customers) and the executives and investors in the bank?
- cs702 4y ago> I am not defending SVB executives. But you're blaming the federal government for something the executives did voluntarily! Please don't change the argument. I didn't say anything about depositors in my response. The federal government did not cause this. SVB executives did.
- bsuvc 4y agoIt's only fair, because I didn't say anything about executives in my original comment. Please don't make strawman arguments.
- cs702 4y agoDon't be silly, please. There's no strawman here. You accused the federal government as causing something that SVB executives did voluntarily. It makes sense to point that it was they who caused their problems, not the government. Your arguments seem to be motivated by ideology, as opposed to facts and reasoning, so this will be my last comment on this sub-thread. Goodbye.
- bsuvc 4y agoI am only calling out your strawman. If you want to pick up your toys and go home because of that, good.