The irony is that, as near as I can tell, they cratered their balance sheet because they were heavily into long maturity bonds (i.e. super conservative).

https://www.cnbc.com/2023/03/09/svb-financial-falls-more-tha...

That seems an odd position to allow to build given the current macro. Post-Fed changing their mind on inflation, the course was charted.

I'm guessing they held to avoid taking losses, and at some point it became untenable?

The problem isn’t what they bought it’s what they sold. It was all correlated. Loans to startups were going bad while startups were pulling deposits since they weren’t getting funded. So you’re taking losses while losing capital. Doesn’t really matter what else you’re holding at that point if it doesn’t happen to be skyrocketing right now. Long term bonds will never be that thing, but at any point in time almost nothing else would be, either.

> long maturity bonds (i.e. super conservative)

Do you think that long maturity bonds are more conservative than short maturity bonds?

> Do you think that long maturity bonds are more conservative than short maturity bonds

No. Nobody does. That’s why they typically yield more.

Maybe ethbr0 does - considering the quote about super-conservative long maturity bonds.

Why do you say that he doesn't?

> considering the quote about super-conservative long maturity bonds

Within the set of long-maturity bonds, Treasuries are conservative. That doesn’t make them conservative per se.

Full quote: "The irony is that, as near as I can tell, they cratered their balance sheet because they were heavily into long maturity bonds (i.e. super conservative)."

What exactly makes you think that the "(i.e. super conservative)" remark is not about "long maturity bonds" - which is the think that he just referenced?

He didn't mentioned Treasuries at all. I find quite difficult to interpret the "super conservative" as being about some kind of long-maturity bonds relative to another kind of long-maturity bonds.

Treasuries.