Alexis and Dean
Region: US
Sunday 19 March 2023 00:38:40 GMT
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DrippyDad236 :
To help simplify, if SVB could have kept the bonds til maturity they would not have lost $ but the withdrawals forced to sell at a loss
2023-03-19 03:41:45
1300
Zelda :
And yet the whole world business schools learn us that “US treasury bonds are risk free”. No they are obviously not risk free professor.
2023-03-20 15:10:17
25
coolbeans :
Why is the difference in interest subtracted from the $100?
2023-03-20 14:48:01
4
Some guy 🤷♂️ :
That was a GREAT explanation and examples! This man should be a teacher!
2023-03-19 04:51:40
867
Cat601504 :
WHAT HAPPENED TO THE REGULATIONS?????
2023-03-20 13:20:51
4
Waldina Almazan :
What if the interest goes down when they sell? For example: A person buys at 5% interest rate for 3 years and a year later sell at a 2%? The opposite
2023-03-20 11:17:29
5
LABISABAYA :
Am I the only confused guy here? If the interest went up shouldn’t that mean one gets more?
2023-03-19 19:42:14
2
🇺🇸MrsCherry2000 :
So the Fed is basically devaluing our Treasury investments by raising interest rates. Who’s making the money here?
2023-03-19 12:12:14
3
Bart :
So if I buy 1 million dollars of right before the the fed starts cutting interest rates. I get the set interest rate and my bond price goes up?
2023-03-19 17:30:05
4
AdyChe :
So losing 3% made them go bankrupt?doesn’t make sense,it smells 🐠, people shouldn’t keep cash in banks
2023-03-19 15:15:04
13
Doctor Tristan Peh - Dentist :
Nice explanation! 😁👍
2023-03-20 00:58:03
5
Gunner Mack :
The value of the bonds they bought declined because rates went up and when they had to satisfy withdrawals they were forced to sell at a loss.
2023-03-19 20:12:15
4
Awc91 :
So it’s a penalty for selling early.
2023-03-19 09:43:01
276
Socks :
So let’s say they actually held on to those bonds for the full 10 years, but the interest rate in 10 years is 7%. They’ve reached maturity.
2023-03-19 10:10:46
4
RetroArcheologist :
was there a different financial instrument they could/should have used instead?
2023-03-22 06:36:53
16
Mr. Pickles :
Can the bank not foresee this happen? i mean they should have a back up plan before this thing happens, right?
2023-03-19 10:28:29
2
Imika / Imi :
Let’s talk about Credit Suisse.
2023-03-19 20:17:40
19
Dontknowwhatiamdoin :
I understand the math, thanks for simplifying it, i don’t understand why we need to minus the difference. why doesn’t the 102, simply get 5% added to
2023-03-19 18:33:45
4
👋🏻Peace✌🏻Tok :
Simple term : it’s penalty you pay for exiting contracts early. So leftover is bond value + contracted interest earned- bank loss of interest = 💰
2023-03-19 12:16:42
1
Anonymous :
So…the Fed could THEORHETICALLY, purposely cause institutions to crash?
2023-03-19 04:47:43
6
user7110159512865 :
forget about the interest for a minute. the maturity is still $100 in the example. never less! Inflation is the only loss here. rate is not keep up.
2023-03-19 15:20:09
5
Kc_007 :
So who gains from the loss on the bonds when the interest rates goes up ?who takes the inverse decreased difference ?
2023-03-19 14:44:33
3
user99308000 :
Theoretically if there wasn’t a bank run couldn’t they just have let the bonds ride out and been fine
2023-03-22 07:25:45
7
bloomingconifers :
this was incredibly informative!!
2023-03-20 20:10:22
5
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