6 ms·

The value of those bonds is less than what it says on the balance sheet. They were not able to sell them at price X meaning they are no longer worth that much.

The value of those bonds is less than what it says on the balance sheet. They were not able to sell them at price X meaning they are no longer worth that much. The rate on those bonds is less than inflation, meaning keeping them to maturity won't recover original value.

Waterluvian 4y ago
What’s the delta though? Nobody seems to be able to quantify how much this is, but still are able to muster outrage over some unknown amount of harm done to them as bank users.
- JumpCrisscross 4y ago
  > What’s the delta though For the Treasuries, this is known but not public. For the MBS, a theoretical value is known but not public. (The federal government has to sell these securities. It doesn't make sense to announce the holdings so they can be front run.)
  - s1artibartfast 4y ago
    This is a lie. It says on their SEC filings. They state clear as day that they had 91 billion of securities, currently worth 76 billion in their hold to maturity portfolio. In their avalable for sale (AFS) portfolio, they had 28 billion, currently worth 26. They break it all down by asset type, MBS, treasuries, foreign debt, ect. They break it down by the duration, eg <1yr, 5-10, 10+ yrs There is no mystery. I dont know why people keep saying this. Check out page 124 onward if you are curious: https://d18rn0p25nwr6d.cloudfront.net/CIK-0000719739/f36fc4d7-9459-41d7-9e3d-2c468971b386.pdf https://d18rn0p25nwr6d.cloudfront.net/CIK-0000719739/f36fc4d...
    - JumpCrisscross 4y ago
      > break it all down by asset type, MBS, treasuries, foreign debt, ect. They break it down by the duration, eg <1yr, 5-10, 10+ yrs Yes, categorically. No, not specifically. 5 and 10 years produce different answers, particularly with current convexity. (It is fine if you're trying to get broad-grained answers.) Potential buyers over the weekend got a list of CUSIPs. The public does not get that until ex post facto.
      - s1artibartfast 4y ago
        The public does know the current value of all securities, and of several different buckets. Yes, these market values will change at different rates for individual assets, and we dont have a list of every stock, bond, and loan. We still have a very good understanding of the "delta" and the magnitude of the loss, if not with crystal clarity. Nearly all of the unrealized loss was in securities more than >10 years. They had 15.1 billion in unrealized HTM losses. 14.7 billion of this had a maturity >30 9 billion is agency MBS 2 billion in agency collateralized mortgage obligations 2.3 billion in commercial mortgage backed securities, and 1.2 in municipal bonds and notes. They actually have relatively few treasuries, and none in their HTM portfolio. Unrealized losses on treasuries are ~1 billion, And mostly treasuries from treasuries less than 12 months ( contrary to what most people report). I really recommend actually looking at their filing. It is extremely detailed. https://d18rn0p25nwr6d.cloudfront.net/CIK-0000719739/f36fc4d7-9459-41d7-9e3d-2c468971b386.pdf https://d18rn0p25nwr6d.cloudfront.net/CIK-0000719739/f36fc4d...
        JumpCrisscross 4y ago
        We can estimate the delta as of filing dates. We don’t know what the delta is. That doesn’t matter, because they’re federally backed. But it’s a crucial difference to appreciate less than one week after a run.
        s1artibartfast 4y ago
        Like I said above, you won't have a crystal clear number but you have some brackets on the fair market value. The assets under management belong to the account holders so you can zero them out. You can zero out the shareholder value which is zero. This mainly leaves there other cash assets and physical assets. I'm not willing to do it to win a hn debate, but there's enough public information to estimate the size of their hole within a billion or two. Claims that they were evasive or hiding things in their financial reportings are off base. Claims that it would be impossible to get an idea of their Financial losses are also off base.
rhaway84773 4y ago
You know what else is below inflation? The rates SVB has to pay its depositors. As long as the rate is > 0, which is the rate SVB will pay its depositors, there’s no reason the Feds should take any hits. As long as the rates on the bond are > than the rates SVB is paying its depositors it will be fine.

Waterluvian 4y ago

What’s the delta though? Nobody seems to be able to quantify how much this is, but still are able to muster outrage over some unknown amount of harm done to them as bank users.

JumpCrisscross 4y ago
> What’s the delta though For the Treasuries, this is known but not public. For the MBS, a theoretical value is known but not public. (The federal government has to sell these securities. It doesn't make sense to announce the holdings so they can be front run.)
- s1artibartfast 4y ago
  This is a lie. It says on their SEC filings. They state clear as day that they had 91 billion of securities, currently worth 76 billion in their hold to maturity portfolio. In their avalable for sale (AFS) portfolio, they had 28 billion, currently worth 26. They break it all down by asset type, MBS, treasuries, foreign debt, ect. They break it down by the duration, eg <1yr, 5-10, 10+ yrs There is no mystery. I dont know why people keep saying this. Check out page 124 onward if you are curious: https://d18rn0p25nwr6d.cloudfront.net/CIK-0000719739/f36fc4d7-9459-41d7-9e3d-2c468971b386.pdf https://d18rn0p25nwr6d.cloudfront.net/CIK-0000719739/f36fc4d...
  - JumpCrisscross 4y ago
    > break it all down by asset type, MBS, treasuries, foreign debt, ect. They break it down by the duration, eg <1yr, 5-10, 10+ yrs Yes, categorically. No, not specifically. 5 and 10 years produce different answers, particularly with current convexity. (It is fine if you're trying to get broad-grained answers.) Potential buyers over the weekend got a list of CUSIPs. The public does not get that until ex post facto.
    - s1artibartfast 4y ago
      The public does know the current value of all securities, and of several different buckets. Yes, these market values will change at different rates for individual assets, and we dont have a list of every stock, bond, and loan. We still have a very good understanding of the "delta" and the magnitude of the loss, if not with crystal clarity. Nearly all of the unrealized loss was in securities more than >10 years. They had 15.1 billion in unrealized HTM losses. 14.7 billion of this had a maturity >30 9 billion is agency MBS 2 billion in agency collateralized mortgage obligations 2.3 billion in commercial mortgage backed securities, and 1.2 in municipal bonds and notes. They actually have relatively few treasuries, and none in their HTM portfolio. Unrealized losses on treasuries are ~1 billion, And mostly treasuries from treasuries less than 12 months ( contrary to what most people report). I really recommend actually looking at their filing. It is extremely detailed. https://d18rn0p25nwr6d.cloudfront.net/CIK-0000719739/f36fc4d7-9459-41d7-9e3d-2c468971b386.pdf https://d18rn0p25nwr6d.cloudfront.net/CIK-0000719739/f36fc4d...
      - JumpCrisscross 4y ago
        We can estimate the delta as of filing dates. We don’t know what the delta is. That doesn’t matter, because they’re federally backed. But it’s a crucial difference to appreciate less than one week after a run.
        s1artibartfast 4y ago
        Like I said above, you won't have a crystal clear number but you have some brackets on the fair market value. The assets under management belong to the account holders so you can zero them out. You can zero out the shareholder value which is zero. This mainly leaves there other cash assets and physical assets. I'm not willing to do it to win a hn debate, but there's enough public information to estimate the size of their hole within a billion or two. Claims that they were evasive or hiding things in their financial reportings are off base. Claims that it would be impossible to get an idea of their Financial losses are also off base.

rhaway84773 4y ago

You know what else is below inflation? The rates SVB has to pay its depositors. As long as the rate is > 0, which is the rate SVB will pay its depositors, there’s no reason the Feds should take any hits. As long as the rates on the bond are > than the rates SVB is paying its depositors it will be fine.