Quote:
Originally Posted by manaboutown
I received a phone call from my stock bookie at Schwab a couple days ago. He asked me if I was concerned about Schwab Bank, went on to point out about how large it was and so on. He told me he was calling all his clients. Then he asked me if I had any questions. I said not really and told him that I had a general understanding of why SVB was in trouble; it invested long at low interests rates and now was forced to borrow short at higher interest rates. As he seemed nervous I asked him if he was doing damage control. He did not take that question well. After a more or less inconsequential and somewhat strained affable conversation about the weather and such we ended the call.
Then, I got on the internet and discovered Schwab was taking some heat and its stock was down. Turned out Schwab had also gone long on low interest bond investments, was in a pickle to some extent and was assuring folks they had what it took to cover the bases.
Very interesting...
|
I believe there are more shoes to drop. I just purchased two, non-callable CD’S from my Vanguard account. I required two in order for each to be under the $250K FDIC limit of coverage.
Why take a chance? I opted for a 3-year term at 5%.
As Ron Popeil said: “Set it and forget it”. Due diligence is required and I do find it disgusting that the perpetrators of poor management often get a free pass.