> SVB has the money to pay back almost all of the depositors.
There seems to be this myth floating around that bond losses aren’t real. They are very real.
An 80 cent on the dollar (purchase price) bond is a loss of 20 cents. And it doesn’t matter if the holder holds to maturity.
Welcome to interest rates.
Edit: Fundamental fallacy here is not understanding the time value of money. Thinking of money without the time dimension is like thinking about space without time.
There seems to be this myth floating around that bond losses aren’t real. They are very real.
An 80 cent on the dollar (purchase price) bond is a loss of 20 cents. And it doesn’t matter if the holder holds to maturity.
Welcome to interest rates.
Edit: Fundamental fallacy here is not understanding the time value of money. Thinking of money without the time dimension is like thinking about space without time.
See https://www.investopedia.com/terms/t/timevalueofmoney.asp
Secondary fallacy here is equating value in the financial sense with gain/loss in the accounting sense.