Hey FAANG FIRE, Next week is is going to be different. By now you have been inundated by news that Silicon Valley Bank has failed. This is the largest bank failure since 2008. It started with SVB sharing that while their assets were larger than their liabilities, their assets were quickly losing value. The simplified reason being that they held most of their assets in the form of very long term bonds that were losing value as the Fed continued to raise interest rates. In order to maintain proper reserves, they were needing to sell those long term bonds at a loss (in the billions).
How about financial institutions like Wealth front? They also sweep balances to partner banks
Fingers crossed! I hope there's no domino effect from this one.
Another great post, thank you.
I'm not sure what you mean by "Your underlying securities held at a broker should be kept separate". Can you please elaborate?