
With all the news of bank failures, just how fragile is the banking system today and what, if anything, can you do about it? If you're one of my clients, you already know that interest rates, when they rise, cause bond values to fall. Long bonds fall a lot. This is why for the last two to three years, we have been putting our clients in short-term bonds to protect them from the ravages of the bond market in a rising interest rate environment. Somehow, to my great fascination and to the consternation of regulators, the Silicon Valley Bank, Signature Bank, First Republic Bank*, and probably more to come broke that most fundamental rule, and when loaded up with cash post-COVID because everybody got disbursements, they got bailout money, they got PPA money, they wanted to put that money somewhere and they decided that treasuries weren't yielding enough, "We'll...
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