Status page for SVB payment systems(moderntreasury.com) |
Status page for SVB payment systems(moderntreasury.com) |
Monday is going to be a very interesting day. If a buyer isn't found for SVB and possibly First Republic before the open on Monday, it might be a really bad day on the markets.
50% of mortgages were written (new + refinanced) between 2020 and 2022. These are all in bonds paying 3% or less. Who is holding these?
If deposits were used to buy these then so many banks are done for. Those depositors want their money back so they can get 4%+ interest now. Everyone is going to start to pull.
Contagion is here.
Fannie Mae and Freddie Mac. Most mortgage originators packaged up the mortgages and sold them immediately to the government.
I wonder if there files are read from an FTP server?
However, the Fed was actually a large purchaser of MBS if that is what you’re referring to.
So they did sell them to "a government-sponsored entity and the US government has an implied guarantee to pay any defaults."