Posted on 03/14/2023 3:00:31 AM PDT by PK1991
Norway's sovereign wealth fund had investments in SVB Financial Group and Signature Bank that were valued last week at a combined 2.8 billion Norwegian kroner ($263.3 million), it said Monday.
Femty kroner.....how much is THAT?
Then there’s The Gap in Rome...
That’s my apple juice!
https://www.youtube.com/watch?v=DZySt3i2qm4
No, wait...That’s another ten kroner.
The most conservative thing to do is leave cash in T-Bills. If you have a large treasury operation, you could diversify over a wide range of products like commercial paper and other short-term investments. As always, credit and diversification are absolutely key.
After that, one might consider spreading it (a large cash pile) over open-ended money market funds (after taking a very careful look at who is running and sponsoring such funds and what their investment criteria are).
Now we can see why the Biden administration HAD to make all SVB depositors “whole.”
This bank was a haven for government pension funds of OTHER NATIONS.
You can see how these nations have become “obedient slaves” to the foreign policies of the USA - especially the warmongering policies.
Our U.S. banking system is much more of a house of cards than most of us ever knew.
Our financial system is going to collapse.
Sorry, Norway. Park’s closed. Moose out front should have told ya.
[You can see how these nations have become “obedient slaves” to the foreign policies of the USA - especially the warmongering policies.]
Here comes a real World War III with NATO in open combat in Europe. /shiny side out
[Our U.S. banking system is much more of a house of cards than most of us ever knew.
Our financial system is going to collapse.]
Well, Obama DID reference ‘House of Cards’ in his “April Fool’s Joke” a few years ago.....
(Yes, it’s going to collapse - yikes)
The headline isn’t clear, but if you read the story you see they had investments in the equity and bonds of the banks themselves—not cash deposits there.
Read the article: these were equity and debt investments in the ownership of the banks, which are not part of the bailouts/bail-ins.
Thx. In fine FR tradition, I didn’t read the article.;-)
I don’t think they are supposed to get anything in the bailout. They weren’t a depositor they were an investor. So according to Yellen they are out of luck right?
SVB had a large stack of T-bills. But when they are zero percent and interest rates are north of 5% they were worthless. Norway was an investor in the banks not a depositor the way that I read it.
T-Bills have a term of less than 1 yr.
A zero-interest T-Bill in a 5% market with 1 year left to go would sell at a discount of roughly 5% (i.e., it would still be worth 95% of face value). On top of that, it is doubtful that any of those T-Bills had a year left to maturity. Most were probably 3-month T-Bills or in that range.
That's why T-Bills are cash equivalents. Their value stays near par even in bad interest rate markets.
Somewhere, in the world, bets are being made as to how soon the American economy will crash
I saw an article yesterday, maybe here. It said at the time of the collapse and before the ban was spending considerable tome organizing several woke (we are talking big) events like LGBTQ+-%/= etc.
Imagine, the idiots were spending their time on social events while the company was sinking.
But the Marxists are counting on failure...and are doing everything they can to bring it about.
Some People will bet on anything. I haven’t a clue as to when or what will happen but knowing people behave in group think and fear being a powerful tool I still do not know what will happen and that is why I never bet
He made a lot of money on Tesla in the last run-up. He didn't have the foggiest idea why he made his investment when he did (except that he's a big Elon fan).
I suggested he learn how to study the market (or take his money and run) or he would soon lose what he made.
He didn't listen...and he soon lost what he made.
I hate that, but whatcha gonna do? It's his money.
So this isn’t correct in all the articles I read about why SVB collapsed: “Why did Silicon Valley Bank collapse?
Silicon Valley Bank was hit hard by the downturn in technology stocks over the past year as well as the Federal Reserve’s aggressive plan to increase interest rates to combat inflation.
The bank bought billions of dollars worth of bonds over the past couple of years, using customers’ deposits as a typical bank would normally operate. These investments are typically safe, but the value of those investments fell because they paid lower interest rates than what a comparable bond would pay if issued in today’s higher interest rate environment.
Typically that’s not an issue, because banks hold onto those for a long time – unless they have to sell them in an emergency.”
How much are those investments valued this week?
And that was in response to my comment #3 above which spoke about companies keeping cash in T-Bills (and other similar short securities) and not bank deposits.
T-Bills are not long bonds (as I am sure you know).
But you are certainly correct in that SVB got caught in an arbitrage trap by buying long bonds with deposit monies. IIRC, that's what brought them down.
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