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A comment on FDIC Takes over Silicon Valley Bank. Parent comment

Re:FDIC Takes over Silicon Valley Bank by dahfizz on Friday March 10, 2023 @02:19PM (#35099435)
Do you think MBS are always and forever a bad investment because of a bubble 15 years ago?

The MBS wasn't even the problem here. If they had 10Y corporate bonds or Treasury notes paying the same rate, they would have had the same problem.

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Re:FDIC Takes over Silicon Valley Bank by walrus01 on Friday March 10, 2023 @02:44PM (#35099810)
To be clear, I think MBS are morally wrong in how they're implemented in the market, yes.

A bubble 15 years ago? We're in a massive housing price increase bubble now.

Buying $80bn of MBS in the middle of a well-known housing price bubble is catastrophically stupid.

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Re:FDIC Takes over Silicon Valley Bank by dragonwriter on Friday March 10, 2023 @03:17PM (#35100313)
> Do you think MBS are always and forever a bad investment because of a bubble 15 years ago?

I think heavy exposure to a single type of long-term asset for a retail bank is always going to be a bad investment decisions, because risks materialize, and correlated risks tend to materialize together, and when a retail bank suddenly lacks liquidity...

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