[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.