[sgbuffett]

Understand this new crisis clearly.

1. Banks big and small when they take in depositors money use it for lending and also buying treasuries e.g govt and non govt bonds when are safe and gives a return

2. Fed hike rates at record pace to fight inflation. These rate hikes cause the market value of treasuries and needs to go down. How much are the losses ? $600B

3. For SIVB Bank because of slowdown in state up activity companies were withdrawing there deposits at a fast rate. This forced the bank to liquidate its bonds at a loss resulting in collapse.