Andrew Ross Sorkin writes in NY Times DealBook:
"So far, Silicon Valley Bank seems like an outlier, given its unique circumstances and unusual client base — it had very few typical retail customers, as JPMorgan’s Michael Cembalest wrote in a note to investors on Friday. But there is already nervousness about some other small and regional banks."
"In the immediate term, the most pressing problem this presents is for Silicon Valley itself: Venture capital firms that used the bank may struggle to gain access to their money — and possibly that of their limited partners, including pension funds, that had forwarded money intended for investments. This, in turn, may make it hard to fund current and new investments — or to rescue other companies inside and outside their portfolios.
DealBook is already hearing about secondary sales of private shares to fund both businesses and individuals."
Link (paywalled)

https://morningstar.com/articles/1143550/which-funds-are-taking-the-biggest-hit-on-silicon-valley-bank-and-other-bank-stocks
It's one thing for a fund in general to hold bank stocks. It's another for an active fund with a manager to bet big on SVB. Did these managers not look at the bank's capital/balance sheet and see that it was heavily invested in long-term bonds in a rising rate environment, while also facing tech sector depositor withdrawals? In this regard, Diamond Hill Mid Cap, usually a careful risk-conscious shop, deserves to be dinged. As do, BBH and Sound Shore and Franklin Mutual. From the article:

In [Diamond Hill Mid Cap's] shareholder commentary from the end of 2022, manager Chris Welch acknowledged the stock was facing difficulties. “Regional banks First Republic and SVB Financial were pressured amid a rising rate environment, which is weighing on net interest margins.”
Welch singled out the unique position of Silicon Valley Bank. “SVB Financial faced additional headwinds given its exposure to the innovation economy, its primary area of focus—though we believe such an environment offers the company an opportunity to add tremendous value for its clients and cement its leadership position in a lucrative space,” he wrote.

I just received this from First Republic Bank:

To Our Valued Clients,
In light of recent industry events, the last few days have caused uncertainty in the financial markets. We want to take a moment to reinforce the safety and stability of First Republic, reflected in the continued strength of our capital, liquidity and operations.
Our capital remains strong. Our capital levels are significantly higher than the regulatory requirements for being considered well capitalized.
Our liquidity remains strong. In addition to our well-diversified deposit base, we continue to have access to over $60 billion of available, unused borrowing capacity at the Federal Home Loan Bank and the Federal Reserve Bank.
We are here to fully serve you. We stand ready to process transactions and wires, fund loans, answer questions and serve your overall financial needs — as we do every day.
For almost 40 years, we have operated a simple, straightforward business model centered on taking extraordinary care of our clients. We have successfully navigated various macroeconomic and interest rate environments, and today we have among the industry’s highest rates of client satisfaction and retention.

FWIW...

BBG: "Dick Bove at Odeon Capital Group LLC notes “that reduction in bank deposits and the sharp negative reaction in the financial markets to the SVB developments suggest a deeper discontent with the banking industry’s treatment of their clients and investors.”
I don't often listen to Bove, but I think he's on to something here -- when individuals see that they're being offered pissant amounts of interest on their money by the bank in an age where can get 4 or 5% from treasuries (and that fact is making frontpage news daily), is it any wonder folks are feeling 'discontented' and looking to move their money?

Many were puzzled late last year when Silvergate tapped the FHLB for multibillion dollar liquidity loan, and not the Fed Discount Window. Of course, The FHLB was easier then. But there was a lot of questioning of the FHLB's action because it is supposed to support housing, and what was it doing providing support for a crypto bank under a bank run. As it happened, the FHLB called its loan few days ago, just before Silvergate collapsed, and may very well have been the trigger for Silvergate.
SVB Bank's capital raise filing and efforts hit the market on the day of Silvergate collapse, and that just became DOA.

@Old_Joe : Now we know why they call it adventure capital !

@LewisBraham
Why did you jump subjects? Local news never did longform journalism of the sort we're discussing, at least not small papers, even in their postwar heyday (to the 1990s or a bit before). Newsday maybe, if we call that 'local'.
Roger about their demise and vulture-capital evisceration, sometimes in that order. It's horrible. J-prof Dan Kennedy is an expert and historian in the field (also a successor to me at an alt-weekly looooong ago):
https://www.bostonglobe.com/2023/02/10/opinion/local-news-startups-are-overcoming-evils-corporate-chain-ownership/
@linter, I don't know if you are involved in any way, but RS sure as hell has stepped up its investigative / political / digging game the last year or three. A real surprise.
Your work on your great-aunt makes me think you might be at least a little interested in my slightly similar initiative (filmable bio-novel is the goal) of this grandfather:
https://davidrmoran.wordpress.com/
+++
As I type, PK has just tweeted a smart succinct summary of SVB, 8 parts thus far, comparing it w Madoff affinity fraud in the crypto-bogo era:
https://twitter.com/paulkrugman/status/1634908696806592518

Snippet of article written by ALFONSO PECCATIELLO (ALF) -substack
"banks with assets below $250 billion (and a few more requirements) are not subject to the tighter regulatory scrutiny like big banks: no liquidity ratios (LCR), no net stable funding requirements (NSFR) forcing you to diversify your funding base and light stress tests. This allowed SVB to run wild with its investment portfolio and funding base concentration.
SVB’s management repeatedly lobbied to increase the cap for lax regulatory scrutiny and conveniently remained 20-30 billion below the $250 billion threshold?
It is hard to deny a decent amount of moral hazard was at play here
SVB was not applying basic risk management practices, and exposing its investors and depositors to a gigantic amount of risk.
Economically speaking, a $120 bn bond portfolio with a 5.6y non-hedged duration means that every 10 bps move higher in 5-year interest rate lost the bank almost $700 million.
100 bps? $7 billion economic loss.
200 bps? $14 billion economic loss.
Basically the entire bank’s capital wiped out.
As the tech/IPO boom faded, deposits stopped coming in 2022.
Recently, depositors started taking their money away and forced SVB to realize this huge losses on bond investments to service deposit outflows.
The concentrated nature of the deposit base and awful risk management meant SVB went belly up real quick. Many people are now calling for a blanket bailout.
But the evidence that moral hazard was at play are too big to be ignored.
And we should not reward moral hazard."
Author speaks to incompetence and/or moral hazard. Notes that in DEC 21, SVB DID HEDGE their portfolio but NOT in DEC 22.
Oy Vey.
what other banks are being run like this? Whiskey Tango Foxtrot.

Well, I'm not the only one who questions the present banking oversight/systems failure situation.
Edited excerpts from a current Wall Street Journal article:

Silicon Valley Bank’s failure boils down to a simple misstep: It grew too fast using borrowed short-term money from depositors who could ask to be repaid at any time, and invested it in long-term assets that it was unable, or unwilling, to sell.
In addition, nearly 90% of SVB’s deposits were uninsured, making them more prone to flight in times of trouble since the Federal Deposit Insurance Corp. doesn’t stand behind them. The Federal Reserve was the primary federal regulator for both banks.
“A $200 billion bank should not fail because of liquidity,” said Eric Rosengren, who served as president of the Federal Reserve Bank of Boston from 2007 to 2021 and was its top bank regulator before that. “They should have known their portfolio was heavily weighted toward venture capital, and venture-capital firms don’t want to be taking risk with their deposits. So there was a good chance if venture-capital portfolio companies started pulling out funds, they’d do it en masse.”
To be sure, banks regularly borrow short-term to lend for longer periods of time. But SVB concentrated its balance sheet in long-dated assets, essentially reaching for yield to bolster results, at the worst possible time, just ahead of the Federal Reserve’s rate-hiking campaign. That left it sitting on big unrealized losses, making it more susceptible to customers pulling funds.
The banking industry as a whole had some $620 billion in unrealized losses on securities at the end of last year, according to the Federal Deposit Insurance Corp., which began highlighting those late last year.
Another regulatory issue: accounting and capital rules that allow banks to ignore mark-to-market losses on some securities if they intend to hold them to maturity. At SVB, the bucket holding these securities—consisting largely of mortgage bonds issued by government-sponsored entities—is where the biggest capital hole is.
The idea behind such a bucket is that it insulates an institution from short-term price volatility. The problem this poses is two-fold.
First, a bank may not be able to hold such securities to maturity if it faces a cash crunch, as happened at SVB. Yet selling the securities would force the bank to recognize potentially massive losses.
Second, the treatment of the securities means banks like SVB are discouraged from selling when losses emerge, potentially causing problems to fester and grow. That appears to have been the case at SVB and many other banks as rising interest rates in 2022 caused large losses in bond markets.
Banks have an additional incentive to pile into Treasurys. They have to hold less capital against such holdings, supposedly because they are risk-free. However, this means banks are holding less capital to absorb losses, and Treasurys can lose value due to changes in interest rates.
Others said monetary policy over the past decade played a role. The Fed “suppressed the yield curve and made it very clear to the banking industry that [it] would do this for a considerable period,” said Thomas Hoenig, former president of the Federal Reserve Bank of Kansas City and former vice chairman of the FDIC. “So bankers are making decisions based on that message and based on that policy, and they fill their portfolio up with government securities of varying maturities, and they say they’re going to hold them to maturity.”
That suggests the need for regulators to take a broader view of the risks in the financial system.

Related from early Friday after the FDIC seizure:
Former Treasury Secretary Lawrence Summers warned that there will be “severe” consequences for the innovation sector of the US economy if regulators don’t smoothly work out the collapse of Silicon Valley Bank.
“It certainly is going to have very substantial consequences for Silicon Valley — and for the economy of the whole venture sector, which has been dynamic — unless the government is able to assure that this situation is worked through,” Summers said on Bloomberg Television’s “Wall Street Week” with David Westin.
Earlier Friday, regulators stepped in and seized the bank known as SVB after it mounted an unsuccessful attempt to raise capital and saw a cash exodus from the tech startups that had fueled its rise. The lender had plowed the tens of billions of dollars it took in from venture-capital-backed startups into longer-term bonds, a move that led to massive losses.
The Federal Deposit Insurance Corp., which has been appointed as SVB’s receiver, only insures bank deposits of up to $250,000. But a large share of the money deposited at SVB was uninsured: more than 93% of domestic deposits as of Dec. 31, according to a regulatory filing.
“There are dozens, if not hundreds, of startups that were planning to use that cash to meet their payroll next week,” according to Summers, a Harvard University professor and paid contributor to Bloomberg Television. “If that’s not able to happen, the consequences really will be quite severe for our innovation system.”
Summers said he hoped that regulators will be “aggressive about containing the problem and containing possible contagion.”
“I don’t think this is a time for moral-hazard lectures or for talk about teaching people lessons,” he said. “We have enough strains and challenges in the economy without adding the collateral consequences of a breakdown in an important sector of the economy.”
The sudden implosion of SVB delivered a deep blow to a sector already reeling from layoffs, falling stock prices and diminishing funding for startups. The bank is most known for its financing in the venture capital community but also serves as a financial supermarket for tech executives, providing mortgages on mansions, personal lines of credit and financing for vineyards.
Treasury Secretary Janet Yellen earlier in the day convened a meeting of top regulators, after which she issued a statement saying that the US banking system “remains resilient” and that regulators “have effective tools” to address developments around Silicon Valley Bank.
For his part, Summers said, “I don’t think this is likely to be a broadly systemic problem.”
The hammering of SVB’s stock triggered a broader selloff in US lenders, with the KBW Bank Index tumbling 16% for the week — the worst selloff since the March 2020 Covid shock to the financial system.
Summers said it doesn’t now look like the biggest banks had the kind of mismatch between the kind of deposits SVB had and “the ways in which they had invested their money in longer-term bonds.”
Earlier Friday, Summers said that “there may be a need for some consolidation” in the banking sector as a result of the latest developments. That could then pose a test for regulators, he said.
A number of Democrats have pushed to limit bank mergers. For example, Senate Banking Committee Chair Sherrod Brown last year called for “ensuring that bank mergers, if approved, serve American families, small businesses, and communities – not Wall Street and big corporations.”
Summers warned that “one of the mistakes the authorities could make would be — out of a fear of consolidation coming from some kind of populist concern about concentration — blocking combinations that would ultimately operate in the direction of financial stability.”
“That’s something I think that we’re going to need to be attentive to going forward,” the former Treasury chief said.
--

Bloomberg's Authers and Matt Levine have very good pieces about what went wrong, but they require a subscription ( which I pay as their articles are very good)
In summary, the tech industry in a low interest rate world had gobs of money, which they deposited at SVB. Most Banks make loans with their depositors money, and get paid back with interest, taking on credit risk; some loans are adjustable so interest return may go up, too.
Most of SVB customers ( most of them companies with accounts far in excess of $250,000 FIDC limit) didn't need loans so SVB had to do something with the money. They bought Government bonds in a low interest rate world. (They could have used them to lend for mortgages but they didn't). SVB had far far more bonds on their books than loans compared to most banks, and almost all of those bonds were fixed rate.
So SVB was exposed, not to credit risk ( from loans as a typical bank) but to interest rate risk. When interest rates shot up, and venture capital started to dry up the start ups needed their money so they started withdrawing their deposits.
Eventually to meet this demand for cash, SVB had to sell the bonds which were worth a lot less than they paid for them. Then the panic started and they ran out of things to sell.
Compared to a typical bank, SVB had far fewer loans and more Bonds, far more fixed rate bonds at low interest rates, a customer base all in one industry and therefore subjected to the same economic conditions all at the same time and far far more exposure to interest rate risk in a rapidly rising interest rate world.
They also were just under the asset level that would have designated them "too big to fail" and required government stress testing. The limit was lower before Trump, and SVB growth would have pushed them past it and required stress testing. But Trump raised the limit dramatically because it was "too much regulation" and they were just under the new limit too.
So here we have a train derailment in the banking world that could have been prevented.
Hard to know how many other banks are in same shape. The impact on tech startups may be more profound.

I do have linked Schwab Bank account with my Schwab Brokerage account. I don't know too much specifically about the Schwab Bank, but Charles Schwab is #8 bank holding company (it is also included in annual Fed stress tests). Schwab Bank is also an important profit center for Schwab and it is integrally tied to its robo-advisors. So, I doubt that "Chuck" would let anything bad happen to it and have heaps of eggs on him. I am not worried. https://en.wikipedia.org/wiki/List_of_largest_banks_in_the_United_States
There is good coverage of Silvergate/SI, SVB Financial/SIVB and banks in the current Barron's:
TRADER. The STOCK market has been hit by rising RATE expectations (after POWELL’s 2-day testimony) and falling BANKS/financials (after the failures of SI and SIVB). The problem faced by SIVB – a forced sale of Treasuries at huge loss – isn’t that unusual for banks facing runs (if there is no help from the Fed, FHLB, etc). These events may cause the FED to go slow on rate hikes. In a soft-landing scenario, the SP500 of 4,600 is possible.
UP AND DOWN WALL STREET. Silicon Valley Bank/SIVB is the 2nd largest bank failure in history; it was in part due to losses on forced sale of a huge portfolio of Treasuries. The fed fund futures projections were all over – up after POWELL’s 2-day testimony, and then down on the failure of 2 CA banks, the crypto-friendly Silvergate/SI and the venture-capital (VC)-friendly SIVB. The financials were stressed (KRE, KBE, XLF); credit conditions have tightened. As SIVB lent to tech startups and others burning cash, the prospects of those companies became gloomy. The 2-yr fell 48 bps from Wednesday and similar moves were seen in the past during 10/1987 crash, Lehman failure in 09/2008, 9-11 terrorist attacks. In all this drama, the jobs report was a minor sideshow. But coming are the CPI (Tuesday) and PPI (Wednesday).
All BANKS/FINANCIALS sold off last week (KRE, KBE, XLF). But most differ from SVB Financial/SIVB (and Silvergate/SI). The problem with SIVB was a large loss on huge forced-sale of available-for-sale (AFS, market-to-market) Treasuries, and its efforts for raising capital failed (and the Fed or the FHLB didn’t step in for the rescue). Most large banks have diversified businesses, are well capitalized and can tap multiple sources of funding. While rising RATES are generally good for banks, some overleveraged banks with poor quality loan-books get squeezed. DEPOSITS are also moving from banks into higher-rate Treasuries and money-market funds. SIVB was really a bank for venture-capitalists (VCs) who are sophisticated investors that can move large amounts of money (its sudden closure during the business hours may have been to limit that flight). In better times, SIVB just parked excess deposits into Treasuries that it had to sell suddenly at depressed prices (due to higher rates now). All banks now have large unrealized losses that may be hidden within their hold-to-maturity (HTM, not marked-to-market) portfolios – really, a permissible accounting trick. (In a bank run, the distinction between HTM and AFS basically disappears) Large banks also have tougher regulations and undergo annual stress-tests by the Fed. So, this general selloff offers opportunities in banks now – FITB, HBAN, JPM, KEY, MTB, PNC, RF, USB, etc.
https://www.barrons.com/magazine?mod=BOL_TOPNAV
See also open access LINK1 LINK2

Riders on the Storm, March 6 - 10, 2023
Song titles that may apply for this write:
--- Riders on the Storm, The Doors, 1971
--- Dazed and Confused, Led Zeppelin, 1969
--- I Can see Clearly Now, Jimmy Cliff, 1993
Bonds mostly in a funk until the Silicon Bank melt on Friday, March 10. Then, IG bonds performed as normal for a flight to safety. I suspect some of these price gains will be pulled back next week. 'Course, this may put a pinch on the FED plans for rate changes coming March 26; and I imagine numerous folks in the FED and Treasury departments do not have the weekend 'off'. As noted in a thread by @Old_Joe, Silicon Bank's UST collateral had to be dumped at market rates without benefit of maturity. Contagion towards other FDIC banks may be a problem at some point 'IF' their portfolio is concentrated within their customer base. I only note this now, as I imagine some bank portfolios will find a deep analysis of 'where is your money', being loans and deposits.
An example could be: a bank catering to sub-prime used auto loan.
The 2007-2008 melt was the result of too many folks with their fingers inside the sub-prime mortgage loans areas, and a lot of fancy quasi guarantees layered to protection against default of the mortgage borrower. As the dominoes fell, not many could cover one another's butts with the heavily margin monies. Default city X 10. So many of these sub-prime mortgages were packaged and sold as 'good', with a nice yield. A lot of lying by the peddlers and failure to verify from buyers. I recall pension funds in Finland and other places one would not think about who found their money 'up in smoke'.
There will likely by some more banks with problems, but not to the point of a FDIC grab; but with impact to a stock price and withdrawal of deposits. Any of this could be highly modified with 'social media', which was not a concern in 2007 - 2008. Some companies having monies with SVB may have problems. ROKU (online digital streaming) reportedly had $500 million parked at the bank. What will be their fate with this money recovery?
One may suggest that poor bank management, high interest rates, improper regulatory monitoring and the poor decisions by companies having a concentration of their monies at one bank helped cause a 'perfect storm' for a bank run.
I feel that the appropriate and timely actions with SVB were performed properly, which should add assurance.
If you're curious; a list of failed banks 2009 - 2023. I last posted this list in 2010 or there about. Scroll down for names.
I digress.
IG bonds will likely find favor until the dust settles. IMHO.
Those MMKT's. Stagnant yields again this week, as they've hit a plateau; but most still having a yield between 4.2 and 4.5%, unless it's a magic sauce MMKT. Perhaps another bump up in yields when the FED raises rates again.
--- U.S.$ DOWN -.32% for the week, +.86% YTD
*** UST yields chart, 6 month - 30 year. This chart is active and will display a 6 month time frame going forward to a future date. Place/hover the mouse pointer anywhere on a line to display the date and yield for that date. The percent to the right side is the percentage change in the yield from the chart beginning date for a particular item. You may also 'right click' on the 126 days at the chart bottom to change a 'time frame' from a drop down menu. Hopefully, the line graph also lets you view the 'yield curve' in a different fashion, for the longer duration issues, at this time. Save the page to your own device for future reference.
--- The NAV's list below had a few small positive moves on Thursday, and of course; big positive price moves on Friday, with exceptions; as yields had large down moves from a flight to safety from the failure of SVB. The longer duration were in favor.
A good day to you.....
----------------------------------------------------------------------------------------------------------------------------------------
---Several selected bond funds returns since October 25, 2022. I'll retain this date, as it is a recent inflection point when bonds began to have positive price moves. We'll need to watch if this was just a 'blip'.
NOTE: I've kept the prior dated reports in the beginning of this thread; and have added YTD to this data.
For the WEEK/YTD, NAV price changes, March 6 - March 10, 2023
***** This week (Friday), FZDXX, MMKT yield continues to move with Fed funds/repo/SOFR rates and ended the week at 4.46% (flat lined now). The core Fidelity MMKT's have continued a slow creep upward to 4.22%. The holdings of these different funds account for the variances at this time.
--- AGG = +1.04% / +1.63% (I-Shares Core bond), a benchmark, (AAA-BBB holdings)
--- MINT = +.11% / +1.26% (PIMCO Enhanced short maturity, AAA-BBB rated)
--- SHY = +.56% / +.44% (UST 1-3 yr bills)
--- IEI = +.4% / +.91% (UST 3-7 yr notes/bonds)
--- IEF = +2.27% / +2.05% (UST 7-10 yr bonds)
--- TIP = +.07% / +1.55% (UST Tips, 3-10 yrs duration, some 20+ yr duration)
--- VTIP = -.19% / +.62% (Vanguard Short-Term Infl-Prot Secs ETF)
--- STPZ = -.2% / +.46% (UST, short duration TIPs bonds, PIMCO)
--- LTPZ = +.97% / +5.15% (UST, long duration TIPs bonds, PIMCO)
--- TLT = +3.63% / +6.6% (I Shares 20+ Yr UST Bond
--- EDV = +4.48% / +8.98% (UST Vanguard extended duration bonds)
--- ZROZ = +4.63% / +9.92% (UST., AAA, long duration zero coupon bonds, PIMCO
--- TBT = -7.% / -11.8% (ProShares UltraShort 20+ Year Treasury (about 23 holdings)
--- TMF = +10.9% / +16% (Direxion Daily 20+ Yr Trsy Bull 3X ETF (about a 3x version of EDV etf)
*** Additional important bond sectors, for reference:
--- BAGIX = +1.25% / +1.83% (active managed, plain vanilla, high quality bond fund)
--- LQD = +.61% / +1.99% (I Shares IG, corp. bonds)
--- BKLN = -.81% / +3.09% (Invesco Senior Loan, Corp. rated BB & lower)
--- HYG = -1.71% / +.83% (high yield bonds, proxy ETF)
--- HYD = +.41%/+1.63% (VanEck HY Muni)
--- MUB = +.67% /+1.04% (I Shares, National Muni Bond)
--- EMB = -.33%/+1.29% (I Shares, USD, Emerging Markets Bond)
--- CWB = -3.1% / +2.41% (SPDR Bloomberg Convertible Securities)
--- PFF = -4.08% / +3.28% (I Shares, Preferred & Income Securities)
--- FZDXX = 4.46% yield (7 day), Fidelity Premium MMKT fund
*** FZDXX yield was .11%, April,2022.
Comments and corrections, please.
Remain curious,
Catch

@Hank. Have you ever tried a custom benchmark from however many component ETF’s you choose and assemble to your desired asset allocation. Then put in Portfolio Visualizer. I don’t think it will work for daily but by months it’s fine. Compare with your balance from any start date. Like when you retired to now.

I appreciate your response Larry. I’m not really in search of some performance benchmark. Just wondered how you would go about it. As one who has always eschewed holding cash what I really concern myself with is the inherent short term volatility of the riskier things I invest in. I figure if I’ve invested in what seem to me sound investments with risk offsetting characteristics, than the performance part will take care of itself. (You may assume that like most I keep yearly performance records - now dating back some 25 years.)
Those holdings contain as of now:
6 individual stocks
1 traditional 60/40 balanced fund
1 traditional 40/60 conservative allocation fund
1 non-U.S. equity index fund
1 gold miners fund
1 commodities basket (metals) fund
1 capital allocation CEF using derivatives / leverage
1 infrastructure fund
1 long-short fund
1 risk premia fund
1 global real estate fund
1 EM stock fund
1 GNMA fund
1 global bond fund
1 intermediate HY fund
1 market neutral convertible bond fund
1 inverse S&P 500 fund
- negligible % in money market funds
Friday the entire collection ended down 0.22%. I made 3 purchases throughout the day as a stock was falling, so that number is a bit exaggerated to the high end. That’s reasonable daily volatility. Of course there are occasional off-days when the portfolio falls more than 0.50%. It’s the roughly 8-10% commitment to precious metals / mining that affects volatility the most. Also, individual stocks affect volatility, especially two which represent close to 5% of portfolio each..
If you are beyond 70, and if you hold close to 0 cash reserve, then daily / monthly / year-to year volatility may concern you a great deal. The “close your eyes and invest for the long-run” approach ceases to work at some point.
I know you’ve been looking at a simplified approach. Makes sense. I’d likely recommend that to many our age. Unfortunately, it’s hard to teach an old dog new tricks. I’ve always enjoyed investing. Am reasonably informed. Lived through some horrendous inflation during the 70s & 80s period and came to distrust holding much cash. Other than for ballast, I’ve not liked bonds that much. Albeit - under Paul Volker you could pull 15% or better in money market funds. But it wasn’t always that way. There were stretches where cash didn’t keep up with rising prices. And, as we learned in 2008, some of those money market funds were riskier than we thought.
Re the 3 funds I track daily for volatility: They are all conservative allocation type funds, selected primarily for their diverse investment approaches:
ABRZX from Invesco spreads risk equally among equities, bonds and commodities. It does so largely through the derivatives markets. A stated goal of the fund is “reduced volatility”.
PRSIX is an actively managed 40/60 allocation fund run by T. Rowe Price, one of the best managers in the business - notwithstanding this fund’s recent lackluster performance. Until the bond wipe-out of 2022, it was considered one of the best conservative allocation funds in its class.
AOK is a 30/70 allocation ETF from Blackrock with an appealing 0.15% management fee. It appears to rely partially or wholly on various market index funds. I like that it includes some domestic mid-caps, some foreign equities and even a small exposure to EM stocks. As far as I can tell it’s not actively managed, so the return - for better or worse - represents how the varied assortment of global / domestic indexes perform.
As I’ve stated, I do not own any of the 3 tracking funds above. Just enjoy watching their daily behavior. I did find it unusual - and a bit funny - that they managed to break-even on one of the most volatile trading days I can remember - and with a bank failure thrown in for good measure.

@Sven "I agree that quality journalism has decline significantly and I try to read as much as I can from our local library’s online subscription to major newspapers". =+1
@Old_Joe From your wrap up. "Hopefully we all know or understand that holding bonds or CDs of various types can easily lead to a capital loss if we are required to sell those types of instruments before maturity, and if their value has meanwhile deteriorated due to overall financial market conditions.
So they held short term T-bills paying ? , while paying their customers 20 times less than the T-bills on the customers accounts !! 2% T-bill & customer gets paid .1% !?
Over extended I'd say.
Have a good day, Derf

@LarryB- There's this, from the WSJ:
Following are selected excerpts from a current article in the Wall Street Journal-

First Republic shares fell 52% in early trading before storming back to near the previous day’s closing level, only to then finish the day down 15%. Investors expressed concerns about unrealized losses on assets at the bank as well as its heavy reliance on deposits that could turn out to be flighty.
Addressing its liquidity, First Republic said: “Sources beyond a well-diversified deposit base include over $60 billion of available, unused borrowing capacity at the Federal Home Loan Bank and the Federal Reserve Bank.” Regarding its financial position, First Republic said it “has consistently maintained a strong capital position with capital levels significantly higher than the regulatory requirements for being considered well-capitalized.”
Investors have grown wary of First Republic for reasons similar to those that caused concern at SVB. Like SVB, First Republic showed a large gap between the fair-market value and balance-sheet value of its assets. Unlike SVB, where the biggest divergence is in its portfolio of debt securities, First Republic’s gap mostly is in its loan book.
In its annual report, First Republic said the fair-market value of its “real estate secured mortgages” was $117.5 billion as of Dec. 31, or $19.3 billion below their $136.8 billion balance-sheet value. The fair-value gap for that single asset category was larger than First Republic’s $17.4 billion of total equity.
All told, the fair value of First Republic’s financial assets was $26.9 billion less than their balance-sheet value. The financial assets included “other loans” with a fair value of $26.4 billion, or $2.9 billion below their $29.3 billion carrying amount. So-called held-to-maturity securities, consisting mostly of municipal bonds, had a fair value of $23.6 billion, or $4.8 billion less than their $28.3 billion carrying amount.
Another point of concern that echoes SVB is First Republic’s liabilities, which rely heavily on customer deposits. At SVB, those deposits largely came from technology startups and venture-capital investors, who quickly pulled their money when the bank ran into trouble.
First Republic’s funding relies in large part on wealthy individuals who increasingly have a range of options to seek higher yields on their cash at other financial institutions as interest rates have risen.
Total deposits at First Republic were $176.4 billion, or 90% of its total liabilities, as of Dec. 31. About 35% of its deposits were noninterest-bearing. And $119.5 billion, or 68%, of its deposits were uninsured, meaning they exceeded Federal Deposit Insurance Corp. limits.
Uninsured deposits can prove flighty since they can be subject to losses if a bank fails.

(Text emphasis added in above.)
For additional perspective, there's this from a post that I made earlier in this thread:

Hopefully we all know or understand that holding bonds or CDs of various types can easily lead to a capital loss if we are required to sell those types of instruments before maturity, and if their value has meanwhile deteriorated due to overall financial market conditions.
But I had never given any thought to the possibility of potential bank losses when they have parked substantial amounts of their money in "ultra safe" US Treasuries. An article in this morning's WSJ pointed out that banks are potentially in the same situation as we are.
A bank such as Silicon Valley Bank can have a significant amount of their capital in short-term "safe" Treasuries, but if they are faced with an unexpected run on their deposits, they can be forced to sell those Treasuries before maturity, and at a loss.
So even a reasonably run bank can get into trouble.

Hopefully we all know or understand that holding bonds or CDs of various types can easily lead to a capital loss if we are required to sell those types of instruments before maturity, and if their value has meanwhile deteriorated due to overall financial market conditions.
But I had never given any thought to the possibility of potential bank losses when they have parked substantial amounts of their money in "ultra safe" US Treasuries. An article in this morning's WSJ pointed out that banks are potentially in the same situation as we are.
A bank such as Silicon Valley Bank can have a significant amount of their capital in short-term "safe" Treasuries, but if they are faced with an unexpected run on their deposits, they can be forced to sell those Treasuries before maturity, and at a loss.
So even a reasonably run bank can get into trouble. In the case of Silicon Valley Bank, evidently a significant number of demand deposits are/were well in excess of the 250k FDIC protection, so when things got shaky a number of large depositors were very quick to attempt to withdraw very substantial amounts of the bank's deposits.
I suppose that there's a "lesson" of some sort to all of this, but I'm damned if I know what it is. Forget banks, use mattresses or a box buried in your backyard?

CNBC broadcasting its attempts to raise capital have failed. It (SVB) is in talks to sell itself.

Heard on the radio about SVB on the way home. Radio commentator made the distinction that SVB invests in venture capital while Silvergate Capital was investing in bitcoin. Investors did not make that distinction and threw out the baby with the bathwater.

SVB Financial/SIVB had a masterfully BAD timing. Several of its filings at Edgar/SEC showed up yesterday (see the link below) - a huge AFS* portfolio for sale, a large capital raise by issuing stock, preferreds, etc, on the day after the shutdown announcement by (unrelated) Silvergate/SI. Then the SIVB CEO was on call to its venture-capitalists (VCs) to not panic, and that if everyone panicked at the same time, that could be a problem. Well, the VCs ran away in droves.
Banks are required to hold lots of Treasuries but can hold them at book value or initial purchase price (but not marked-to-market) in the long-term HTM portfolio that the banks may use for quick loans. They also hold securities in the short-term AWS portfolio that is marked-to-market. When there is a run on the bank, this distinction may disappear and almost everything becomes AWS (if the Fed or FHLB or somebody else doesn't step in for rescue) and huge losses ensue. Factors are also different for SI (a crypto-friendly bank) and SIVB (VC/startup-friendly bank).
Neither SI, nor SIVB tapped the Fed Discount Window - unclear if by choice or they were turned away. Late last year, SI strangely tapped the FHLB for liquidity and that loan was suddenly called just before its recent unwind - may be it triggered the unwind.
Twitter was buzz with both, but then it may not be mainstream media - is that CNBC?
*AFS = available-for-sale (marked-to-market)
HTM = Hold-to-maturity (NOT marked-to-market)
https://www.sec.gov/edgar/browse/?CIK=719739&owner=exclude