EmilyMark
04-17

$Bank of America(BAC)$ The problem of Bank of American infamous investment in buying 1.2 % term 20 years of Treasuary Bonds are about $350 billion~$400 billion dollar and most of the investment money come from short-term deposit money. Now only worth about $100 billion or lesser in Bonds Market value now when 10 year Treasuary Bonds reach 4.7%.

Though no selling no loss, but keep them come due after 20 year. The infaltion will keep near $400 billion investment Zero, not to mention the loss of oppturnity cost loss.

And $Goldman Sachs(GS)$ buys all of $SVB Financial Group(SIVBQ)$ 's about 60 billion bonds which is also 1.2% for 20 years at great discount price which may be based on 3.5~3.75 % yield. How much Goldman has bought this kind of bonds its self we do not know. Sachs thinks it takes a great advantage in this deal. But now suffers big loss when 10 years Bonds reach 4.7.

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  • JustinCooper
    ·04-17
    Looks like a bit of a mess, but hey, that's how the market goes sometimes, eh?
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