Viewing a single comment thread. View all comments

jointheredditarmy t1_jcmaumd wrote

So it’s been a while since school but I seem to remember it would not have. Treasuries are always considered risk free for capital calculation purposes. When rates go up 5 points in 9 months it’s anything but risk free. The thinking is that even if you have a duration mismatch, it will converge at some point, since the treasury will get paid back at some point, and that’s true until you have a bank run.

−19

BirdsbirdsBURDS t1_jcp4odc wrote

“Markets can remain irrational longer than you can remain solvent”. Can’t help but feel this lesson was learned before. Not too long ago.

1