Timeline for What happens to depositors at Silicon Valley Bank?
Current License: CC BY-SA 4.0
7 events
| when toggle format | what | by | license | comment | |
|---|---|---|---|---|---|
| Mar 14, 2023 at 21:11 | comment | added | Mark | @mbrig, the time value of money is not the same thing as the cash value of money. The fact that better investments exist does not change the fact that if you purchase one of the SVB bonds you will get the full value when the bond matures. | |
| Mar 14, 2023 at 4:18 | comment | added | mbrig | @Mark the time value of money doesn't change just because the government can afford to hold them to maturity. There's plenty of other people/companies/etc that could hold them to maturity, but they're still not going to pay par value for them, because "coupons+1000$ in 10 years" is worth less than "$1000 right now". Now, they're not actually buying them, they're offering loans with them as collateral, pretending the collateral is worth more than its current market value.... not the craziest thing, but not nothing either. | |
| Mar 14, 2023 at 3:44 | comment | added | Mark | @mbrig, the bonds are worth full value -- if you can afford to hold them to maturity. The thing that crashed SVB is that they had an abrupt need for the money locked up in those bonds. | |
| Mar 14, 2023 at 1:31 | comment | added | mbrig | @Harper-ReinstateMonica "works" is a maybe tenuous word for business's money being saved by the government hitting its emergency override button out of fear of contagious collapse. And the new the long-term alternative, "the Fed will loan you money pretending your depressed value bonds are worth full value" is not exactly the most confidence inspiring solution ever. Moral hazard, anyone? | |
| Mar 13, 2023 at 14:22 | comment | added | Fattie | Particularly if you're a bank! | |
| Mar 13, 2023 at 6:00 | comment | added | Harper - Reinstate Monica | LOL saw that coming. Like I said in my answer. Our banking system works. | |
| Mar 13, 2023 at 0:01 | history | answered | MTA | CC BY-SA 4.0 |