VIDEO M QUOTE: I think what sunk SVB is that they don't have to mark Treasuries to market, but can be kept at "cost" if they intend to hold to maturity.The problem is that once you sell a certain bond, then all the bonds of that maturity have to be marked to market.As the withdrawals came, they were forced to sell some of their bond portfolio - but those sales generated massive mark-to-market losses on the Treasuries (and agency bonds) still left on the balance sheet. And when your balance sheet is geared 7-1 or higher and then you take a 20%+ haircut on a large portion of your assets, then your balance sheet is upside down. That's how I understand it. Correct me if I'm wrong. From the WSJ below. Best, M UNQUOTE wsj.com Washington Is the Systemic Risk - WSJ G wrote: but what sort of world lets then not mark to market and what analysts thought this was sane to think banks would not show losses hold to maturity is great concept when have a match book of same duration. but when have a mismatch , especially one like overnight vs multi year , better make sure you have it right ! as other god help you when someone calls the hand ! so my guess this week will see more peeling away of the onion as others ask same question for other banks and in fact the fractional reserve banking model , gets called into question ! since the assets they have on the books are not the value of what the banks and regulators would make people think they are ! and depositors flock to buy bonds (if they can and if yield matters ) ! or just take cash and out it under their bed or safety deposit box ! or put money with big banks how did the fed think this was going to end ! and all the fault of leaving out the punch bowl far too long like all good parties , and the after shots of easy covid money did not help ! R wrote: I understand Japan plays the arb game by buying US treasures with low to no cost debt in yen. I wonder if they too are suffering losses if they have to mark to market. T wrote: G here you go SVB's woes explained in 1 slide 60% of its deposit base came from the same unprofitable companies it lent to - 75% of its assets were to those companies Sure sounds like a good business model to me However it does once again confirm the old adage that the FED always raises until breaks something Let's see what else it can break D wrote: SP500 futures opened UP $12. No fear outside this board. Gold +$12 T wrote The fed backstopped everything as usual Market rallied for 6 months after bear Stearns before finally caving This is a storm in a teacup Next one maybe not And gold is rallying because it understands the fed is done hiking Got my first buy signal in gold on Friday since my sell on 2/2 G wrote surely this issue of no marked to market on held to maturity assets is across board for all banks and all those long term bonds bought at 1-2 % rates are now deeply under water if forced to sell . so model holds together is depositors accept low deposit interest rates (maybe for small depositors this logic holds as difficult to find alternatives, but even here it is easier and easier for retail to access bond markets direct or via synthetics ) but as soon as depositors seek alternatives to gain higher rates , surely the run start ! this is laugh of the stress test it focused on quality not yield ! and no more line up at bank , the digital transfer system does it much more efficient so which banks did not do the same as slb over last 5 years ? as liquidity of fed went somewhere ! and someone bought all those treasuries (well mot the chinese , russians or other similar countries) so someone sitting on hundreds of billions of losses ? whether marked to market or not ! the instruments in peoples portfolios are worth less ! signature bank real or regulators trying to crush crypto by cutting off banks that service it ! effective way to get a lot of information and try to break one of potential competitors to usd D wrote: Bitcoin +10% SP550 futures are up 1.4%. I'm not a conspiracy freak, but this smells to me like PPT. Bitcoin is irrelevant so it allowed to jump 10% or 2,000 points. Gold is suppressed so it's up minuscule $10. J wrote: am agnostic but concerned, stirred and bothered, but cerebral process I believe still functioning and not panicked. perhaps I do not yet understand the situation. we must have enough gold to do a zero-state systemic reset should gold hit 5000, or to survive one. mr Putin might put in a few words should the situation re Team USA devolve into financial panic, now that the Team is in crisis, and done with mania what might Putin say, connecting the current happenings to, oh, say, "financial economy", "fairer world order", "destruction of the middle class" and such choice words what might core comrade Jinping say? or more importantly do? like, oh, for starters, GetMoreGold by CancellingMoreT-Bills, before shoulder-to-shoulder brother Putin announces repricing of Gold upwards to $3600-4000 by further weaponisation of energy in effort to save the Global South and Global East, that which would be welcomed by the South, Southeast, and East. Let us hope that Team USA refrain from doing Afghanistan-esque rug-pull on Ukraine and therefore UK, Norway, and Poland ... would not be good, even if the cost of refraining is rising, the opposite of dropping. Team China is reckoning that Ukraine episode shall end sometime coming summer and is acting accordingly, presumably to offer reconstruction help, namely that help which must be gladly accepted and gratefully thanked. In such a situation, the optics would be very extremely bad in the eyes of some, as bad as or much worse than the Saudis and Persians making good in Beijing, city of Son of Heaven. The FED must go all-in to stop the contagion because such financial variety moves much faster than Covid this SVB issue might evolve into an Ukrainian loss, and is so, a 2024 issue as far as I can figure out, Shenzhen still all-good even if a few bad actors jailed Re the mark to market issue, at so many levels and across likely all sectors, a suspension of critical doubts and exercise of incredible foolishness, but let us not judge until 2023 is over with 
