Post ATYfiTV6QPBiU29uts by bmc@jawns.club
 (DIR) More posts by bmc@jawns.club
 (DIR) Post #ATYeTVzEndr1tbYbLs by lauren@mastodon.laurenweinstein.org
       2023-03-13T01:47:03Z
       
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       It's worth noting that a key factor (certainly not the only one, but a key one) in the SVB and related failures is the Federal Reserve's historically aggressive interest rate rises to battle inflation. Many onlookers believe that such an aggressive path could harm the economy and individuals in ways even worse than inflation.
       
 (DIR) Post #ATYeg63oVIydFfhGm8 by bmc@jawns.club
       2023-03-13T01:49:16Z
       
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       @lauren Still, as Katie Porter noted, SVB still did not hedge against interest rate increases, as would have been simple financial prudence.
       
 (DIR) Post #ATYevMIOQMjfwpnGq0 by lauren@mastodon.laurenweinstein.org
       2023-03-13T01:52:03Z
       
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       @bmc Could be. But that doesn't change the fact that such rapid interest rate hikes are risky in many ways including ones that can't be easily compensated for by most ordinary consumers.
       
 (DIR) Post #ATYfBgCiAnVIKGv1U0 by bmc@jawns.club
       2023-03-13T01:54:59Z
       
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       @lauren I'm uncomfortable laying this at the feet of the Fed, when SVB lobbyists and the SVB president pushed Congress (successfully) to exempt them from the kinds of stress tests that might have prevented this mess. See, for instance, https://theintercept.com/2023/03/11/silicon-valley-bank-used-former-mccarthy-staffers-to-weaken-regulations-lobby-fdic/
       
 (DIR) Post #ATYfWGfYJ2kbDEE4ae by lauren@mastodon.laurenweinstein.org
       2023-03-13T01:58:46Z
       
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       @bmc You seem to be bending over backwards to justify reckless interest rate hikes.
       
 (DIR) Post #ATYfiTV6QPBiU29uts by bmc@jawns.club
       2023-03-13T02:00:53Z
       
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       @lauren Not at all. I'm bending over backwards not to excuse malfeasance on the part of the bank executives. Whether one agrees or disagrees with the interest rate hikes, it's not as though the banking executives didn't have plenty of warning -- and, yet, they failed to hedge. Nearly ALL their "protection" was in bonds, which fall when interest rates rise.That's financial negligence, at best.And it's quite independent of whether one agrees or disagrees with the Fed's approach to inflation.