Banking collapses aren’t new, they’ve been happening since money was created. It’s no surprise to see Silicon Valley Bank (SIVB) and other peers taken over swiftly by regulators this week. Regulators are there for these exact same situations. The US Federal Reserve has already provided more than US$300bn in liquidity this week through its backstop facility. These are one year loans to distressed banks in exchange for collateral. We expect the same to continue as more banks fall over in the near future.
Agreed Pete. Buying bonds at a 2% interest rate for 30 years is just cray when you consider the environment we just came from. That is a lot of tied up liquidity at stupid low rates.