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I strongly disagree, the current mess is largely caused because some banks didn’t anticipate interest rates going up from historic lows. That’s profoundly bad

I strongly disagree, the current mess is largely caused because some banks didn’t anticipate interest rates going up from historic lows. That’s profoundly bad risk management. A child could have done better. https://fred.stlouisfed.org/series/FEDFUNDS https://fred.stlouisfed.org/series/FEDFUNDS

G3rn0ti 4y ago
> interest rates going up from historic lows. > That’s profoundly bad risk management. Well, yes. But it's also bad economic policy. The banking sector just happened to have adapted to a decade of low interest rates. Then during the Covid crisis of 2020 the FED pumped dollars like crazy into the markets [1] -- adding fuel to the fire. If you set bad incentives you'll harvest bad behavior. That is the tragedy of FED-style economic planning in a nutshell. [1] https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm https://www.federalreserve.gov/monetarypolicy/bst_recenttren...