Paul Krugman

@paulkrugman ↗

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Last Checked April 3, 2023

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Sat Mar 11 11:04:49 +0000 2023

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Paul Krugman @paulkrugman

SVB had little of this. It was sitting on a huge pile of cash, without good places to put it to work. So what it did was put a lot of money into long-term securities, which at the time were paying much higher interest than short-term assets, incl deposits 8/ https://t.co/Yo7HotBmqt — PolitiTweet.org

Posted March 11, 2023

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Paul Krugman @paulkrugman

Conventional banks also earn money from credit card balances, which is similar but even more so, with a lot of inertia in the customer base 7/ — PolitiTweet.org

Posted March 11, 2023

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Paul Krugman @paulkrugman

So it was basically a kind of carry trade. The problem is that there was a reason long-term rates were higher than short-term. Wrote about it back in 2008: strongly upward-sloping yield curve is inevitable when short rates are near the zero lower bound 9/ https://t.co/JwmEKMfSep — PolitiTweet.org

Posted March 11, 2023