I wonder how many others did similar?
The government printed a ton of money and demand for loans crashed after the pandemic started. People even paid loans down. Many companies weren't borrowing much because of supply chain issues - why borrow if you can't use it? I'm not blaming the government - unemployment went through the roof for awhile and they had to protect people. But this is a side effect that no one really saw. That the treasuries would lose a lot of value because of super rapid interest rate increases while companies start eating away at their runway because no new investment is coming.
It all makes sense today but literally no one saw this coming a couple weeks ago.
No one said SVB is going to be insolvent on 3/10, but lots of people thought SV and investors were making bad decisions in general over the past several years.
SVB is a victim of its own culture. You would never be hired as an exec at SVB is you said "Lets keep all these deposits in 1-month Tbills and cash since most of these startups are garbage and are going to need to take withdrawals within a couple years."
The short interest in SVB would indicate that alot of people saw this failure moths ago.
That and SI have been two of the most crowded trades by hedge funds since December. Borrow has been 50%+ for the banks. That would indicate that alot of people saw this coming 4 months go.
The risk has been discussed for almost a year at least:
https://www.fitchratings.com/research/banks/us-banks-face-hi...
> But this is a side effect that no one really saw.
Literally everyone except SVB saw that long term bonds would decrease in value post pandemic when interest rates increase. Interest rate increases lowering the value of bonds is quite literally the most basic rule of bonds.
