Bad Banks

While the failures of Silvergate and Signature are purely crypto related and meaningless, there are two lessons to be learned from the failure of SVB. First, major risks to the financial system can come from non-money-center banks, and second, borrowing short (by holding customer deposits) to lend long (by purchasing long bonds and MBS) to slightly juice returns is a terrible idea. The Fed now raises by only 25bps.

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