[swatcoder]

That analogy only works when your gold is obviously worth a lot more than your pizza bill.

For SVB, the knock on the door is more like a loan shark coming by to call in for their return. You have gold under the mattress that is sometimes worth plenty, but it’s value isn’t determined until it sells and it isn’t looking to square up with what’s due.

[rtkwe]

Isn't the thing they got caught out on mainly TBills though? So the metaphor falls apart again because they have a practically guaranteed value just with a long time horizon.

[swatcoder]

The value at maturity doesn’t matter. It’s not like they were going to sit on them for the whole term anyway. They’re just an asset that’s usually fairly stable and that usually stays that way over a certain window, and so they’re actively traded and have a market value based on those characteristics.

In their case, the market value of the TBills that they purchased slipped too much. Because that’s just paper value and could have recovered or been been balanced for eventually, it might not have been an issue without a run of withdrawls. But buzz hit that they were in an unexpectedly and unisually fragile position, and that made people start the run that broke them.

[jefftk]

> It’s not like they were going to sit on them for the whole term anyway

Really? Most of the reporting has described them as having a crisis in part because lots of treasuries that they had classified as "held to maturity" needed to be reclassified as "available to sell" which required marking them to market.

[swatcoder]

That’s just accounting. They reclassified now because they were having a crisis, but of course they would have reclassified later when it was advantageous.

They weren’t trying to tie up their funds in extremely low-yield assets for the next decade. They were parking it somewhere that made their books work until they could move it somewhere else.