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Comment by nerdponx | Hacker News Reader

I remember seeing a list on Reddit the other day showing other banks that also were heavily invested in MBSes similar to what SVB were invested in, and First Republic was on that list. I assume the market quickly lost confidence in all of the banks on that list.

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Was MBS (mortgage backed securities) a typo here? My understanding was SVB had a huge long term treasury position on the books from before interest rate hikes that was in the red against the market. And their second largest tier was direct loans to things like startups that weren't asset backed but instead default to warranties on the companies taking the loans (I'm not close enough to this to really say that more specifically).

They had over $80 billion of MBS as HTM.

> SVB’s mistake was investing in longer-term mortgage securities with more than 10 years to maturity, rather than shorter-maturity Treasuries or mortgage issues maturing in less than five years. This led to an asset/liability mismatch.

https://www.barrons.com/articles/svb-silicon-valley-bank-rat...

They were agency backed cash MBS, which are basically default risk free as defaults come out as prepayments and are pretty liquid. They’re not at all like the subprime credit default swaps on CDOs that were so problematic in their risk ratings.

They had several MBSes on the books, too. Both MBSes and treasuries are long-term fixed-income products. It's not as bad as they used to be in 2008 - they have largely fixed the "gamesmanship" that got everyone in trouble then.

The current 6 month crash is actually worse than 2008 https://www.youtube.com/watch?v=XMTL2XGKKpI

What crash?

Home sales, down 6 months in a row, this is only the third time it has happened. The numbers are lower than the last time, 2008.

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