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?

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

@johnN @junkster
What little of CNBC I watched yesterday was when Mayo was on with Scott Wapner, and they talked about financials (I didn’t know the huge financial sell-off stemmed from $SIVB)….mentioning that the largest, multinational banks have been stress-tested annually for several years, and are probably in good shape (C, BAC, WFC, JPM, etc). The banks just under that size, whether super regional or regional, have not been stress-tested. Obviously the worry is contagion.
I have been trading ZION; it’s a conservative UT (redundant? Ha) bank that I have traded in and out of for last 18 months or so. Good dividend growth. But it was down 10-11% yesterday, so I bought more.
Good luck to us….I’m in junkster’s camp that we’ve been in a rally since October, and that was the bear bottom….but man, all these walls of worry keep being built! Ha

I am surprised this hasn’t gotten more discussion on the boards today. I can’t recall the last time I saw a component of the S@P 500 lose 60% in one trading session. Various banking indexes got hit hard today in the aftermath and a couple other west coast bank saw double digit losses. Of course SVB pales to the once size and importance of Lehman during the financial crisis. And preeminent banking analyst Mike Mayo said today with the major banks we could be much closer to a bottom. SVB continued downward in after hours trading impacting the stock futures which are looking ugly as I post this.
On the bright side this could tempt the Fed to take its pedal off the gas. The employment report could also change things around in a hurry - or not.

https://www.marketwatch.com/story/the-10-banks-that-may-face-trouble-in-the-wake-of-the-svb-financial-group-debacle-50d6e49e?mod=home-page
https://www.google.com/amp/s/finance.yahoo.com/amphtml/news/marketmind-bye-kuroda-boj-takes-220502194.html
Nobody know
Folks who think could be new Lehman on horizon??
Thinking selling 50% of all asset tomorrow

For such an incredible financial genius FD10 seems to have a lot of trouble just posting a simple link. Go figure...

Well to be fair the survey was taken to assess how managers 'intend' to invest moving forward and not how they were positioned. The part FD left off from Yahoo:
"Defensiveness is in style among financial advisers, according to the BofA Securities annual Global Wealth & Investment Management Survey.
Equity allocation (NYSEARCA:SPY) (QQQ) (DIA) (IWM) fell to 57% from 62% in 2022, the lowest level in the short six-year history of the survey. This time around, 372 Merrill financial advisers from around the country responded.
Exposure to bonds (TBT) (TLT) (SHY) (IEI) (HYG) (LQD) rose 3 percentage points to 27%, the highest recorded.
"These shifts may continue: 39% said they are moving more into bonds, vs. 18% for equities, consistent with the average bond allocation from sell-side strategists hitting a 10-year high," strategist Savita Subramanian wrote in the survey note Wednesday. "We see long duration bonds (and long duration growth stocks) as risky given rate sensitivity."
Cash (VMFXX) (SPAXX) allocation rose to 10% from 7%.
"Just 26% plan to buy stocks with excess cash (v. 42% last year), while 29% plan to buy bonds," Subramanian said. "30% are happy to remain in cash. Cash return/dividend strategies are most frequently requested by clients (82%). We concur. We also prefer companies with self-funded growth (cash flow generators) to those that need to borrow to grow.""
FWIW.

All you got to do is listen to dozens of "experts' on CNBC and read many articles in the last 3 months where they said the same thing. No, it didn't start this week, it's been going on for awhile now.

Pretty sloppy for a guy who is always not only on top of everything, but actually well ahead of everything... he didn't bother to check his link response, which seems pretty odd considering that he has such superior financial systems. Makes you wonder a bit.

I have been posting for years, and rarely my links don't work. Because the link didn't work I am sloppy?...mmm...it tells me a lot about you.
BTW, how about discussing the topic?

Pretty sloppy for a guy who is always not only on top of everything, but actually well ahead of everything... he didn't bother to check his link response, which seems pretty odd considering that he has such superior financial systems. Makes you wonder a bit.

Well to be fair the survey was taken to assess how managers 'intend' to invest moving forward and not how they were positioned. The part FD left off from Yahoo:
"Defensiveness is in style among financial advisers, according to the BofA Securities annual Global Wealth & Investment Management Survey.
Equity allocation (NYSEARCA:SPY) (QQQ) (DIA) (IWM) fell to 57% from 62% in 2022, the lowest level in the short six-year history of the survey. This time around, 372 Merrill financial advisers from around the country responded.
Exposure to bonds (TBT) (TLT) (SHY) (IEI) (HYG) (LQD) rose 3 percentage points to 27%, the highest recorded.
"These shifts may continue: 39% said they are moving more into bonds, vs. 18% for equities, consistent with the average bond allocation from sell-side strategists hitting a 10-year high," strategist Savita Subramanian wrote in the survey note Wednesday. "We see long duration bonds (and long duration growth stocks) as risky given rate sensitivity."
Cash (VMFXX) (SPAXX) allocation rose to 10% from 7%.
"Just 26% plan to buy stocks with excess cash (v. 42% last year), while 29% plan to buy bonds," Subramanian said. "30% are happy to remain in cash. Cash return/dividend strategies are most frequently requested by clients (82%). We concur. We also prefer companies with self-funded growth (cash flow generators) to those that need to borrow to grow.""
FWIW.

https://www.sec.gov/Archives/edgar/data/799295/000172967823000013/prosai-stkr6919_0323.htm
497 1 prosai-stkr6919_0323.htm SUPPLEMENT TO PROSPECTUS AND SAI
March 8, 2023
BNY Mellon Investment Funds I
-BNY Mellon Diversified Emerging Markets Fund
Supplement to Summary Prospectus, Prospectus and Statement of Additional Information
The Board of Trustees of BNY Mellon Investment Funds I (the "Trust") has approved the liquidation of BNY Mellon Diversified Emerging Markets Fund (the "Fund"), a series of the Trust, effective on or about May 12, 2023 (the "Liquidation Date"). Before the Liquidation Date, and at the discretion of Fund management, the Fund's portfolio securities will be sold and shares held of underlying funds will be redeemed, and the Fund may cease to pursue its investment objective and policies. The liquidation of the Fund may result in one or more taxable events for shareholders subject to federal income tax.
Accordingly, effective on or about April 11, 2023 (the "Closing Date"), the Fund will be closed to any investments for new accounts, except that new accounts may be established by participants in group retirement plans if the Fund is established as an investment option under the plans before the Closing Date. The Fund will continue to accept subsequent investments until the Liquidation Date, except that subsequent investments made by check or pursuant to TeleTransfer or Automatic Asset Builder no longer will be accepted after May 2, 2023. However, subsequent investments by Individual Retirement Accounts and retirement plans sponsored by BNY Mellon Investment Adviser, Inc. or its affiliates (together, "BNYM Adviser Retirement Plans") pursuant to TeleTransfer or Automatic Asset Builder (but not by check) will be accepted after May 2, 2023.
Effective on the Closing Date, the front-end sales load applicable to purchases of the Fund's Class A shares will be waived on investments made in the Fund's Class A shares. In addition, as of that date, the contingent deferred sales charge ("CDSC") applicable to redemptions of Class C shares and Class A shares of the Fund will be waived on any redemption of such Fund shares.
To the extent subsequent investments are made in the Fund on or after the Closing Date, the Fund's distributor will not compensate financial institutions (which may include banks, securities dealers and other industry professionals) for selling Class C shares or Class A shares subject to a CDSC at the time of purchase.
Fund shares held on the Liquidation Date in BNYM Adviser Retirement Plans will be exchanged for Wealth shares of Dreyfus Government Cash Management ("DGCM"). Investors may obtain a copy of the Prospectus of DGCM by calling 1-800-373-9387.
6919STK0323

https://www.sec.gov/Archives/edgar/data/1591556/000159155623000015/stk62530323.htm
497 1 stk62530323.htm SUPPLEMENT TO PROSPECTUS AND SAI
March 8, 2023
BNY Mellon Investment Funds II, Inc.
- BNY Mellon Alternative Diversifier Strategies Fund
Supplement to Summary Prospectus, Prospectus and Statement of Additional Information
The Board of Directors of BNY Mellon Investment Funds II, Inc. (the "Company") has approved the liquidation of BNY Mellon Alternative Diversifier Strategies Fund (the "Fund"), a series of the Company, effective on or about May 12, 2023 (the "Liquidation Date"). Before the Liquidation Date, and at the discretion of Fund management, the Fund's portfolio securities will be sold and shares held of underlying funds will be redeemed, and the Fund may cease to pursue its investment objective and policies. The liquidation of the Fund may result in one or more taxable events for shareholders subject to federal income tax.
Accordingly, effective on or about April 11, 2023 (the "Closing Date"), the Fund will be closed to any investments for new accounts, except that new accounts may be established by participants in group retirement plans if the Fund is established as an investment option under the plans before the Closing Date. The Fund will continue to accept subsequent investments until the Liquidation Date, except that subsequent investments made by check or pursuant to TeleTransfer or Automatic Asset Builder no longer will be accepted after May 2, 2023. However, subsequent investments by Individual Retirement Accounts and retirement plans sponsored by BNY Mellon Investment Adviser, Inc. or its affiliates (together, "BNYM Adviser Retirement Plans") pursuant to TeleTransfer or Automatic Asset Builder (but not by check) will be accepted after May 2, 2023.
Effective on the Closing Date, the front-end sales load applicable to purchases of the Fund's Class A shares will be waived on investments made in the Fund's Class A shares. In addition, as of that date, the contingent deferred sales charge ("CDSC") applicable to redemptions of Class C shares and Class A shares of the Fund will be waived on any redemption of such Fund shares.
To the extent subsequent investments are made in the Fund on or after the Closing Date, the Fund's distributor will not compensate financial institutions (which may include banks, securities dealers and other industry professionals) for selling Class C shares or Class A shares subject to a CDSC at the time of purchase.
Fund shares held on the Liquidation Date in BNYM Adviser Retirement Plans will be exchanged for Wealth shares of Dreyfus Government Cash Management ("DGCM"). Investors may obtain a copy of the Prospectus of DGCM by calling 1-800-373-9387.
6253STK0323

Now you guys have me worried.
At the start of 2022, I started my position in EM fund RNWOX, the Rondure New World fund. This fund, I believe, has been neck and neck with SFGIX for risk adjusted returns. In fact, if you put their trends on top of each other, there is little difference in return and volatility. At the time I was looking for an EM fund, the manager, Laura Geritz, spoke more positively about increasing positions in India more than China. China was about 20% of the fund when I bought, lower than the avg EM fund. Now, China has increased to about 27% as @sma3 states. I assume the change is based on stock value given this fund has a value tilt.
I still think this is one of the better EM funds to own, low risk, above avg returns, a 5* fund. I don't plan any changes. I think if China starts to renege on financial obligations, they will destroy their own economy and disrupt all markets. So, I don't plan any changes... yet.

03 March, 2023: Jonathan Clements. Smart. Savvy. Predictable.
https://wealthtrack.com/portfolio-financial-planning-adjustments-for-rising-interest-rates-inflation/

Barron's has hit a double ( two weeks) ESG covers
Two weeks ago it was plastic waste and recycling
https://www.barrons.com/articles/cheap-new-plastic-choking-the-world-9b318936?mod=past_editions
This week Agriculture and fertilizer emphasizing new technology to deal with drought and changing climate.
https://www.barrons.com/articles/economy-farmers-deere-agco-stocks-c4ca8e8c?mod=past_editions
Unfortunately, neither is as precise and insightful as they could have been, with only few investment ideas.
But it does show how the financial press is still thinking about pollution, climate change and ESG
And "100 best Sustainable Companies" in this week's edition.
https://www.barrons.com/articles/most-sustainable-esg-us-companies-1b5f70fd?mod=past_editions
They point out that "The top 100 returned an average negative 9.5% in 2022 versus negative 18.1% for the S&P 500 index. Moreover, 63% outperformed the index, up from 47% in 2021. "
I would hope this message gets around and will convince our lawmakers to stay out of investment decisions or their constituents will suffer.
Apologies to anyone who can't open the articles. Who knows how to post the entire article?

Silvergate/SI is an FDIC insured bank. It runs an interface SEN (exchange) that connects its clients with the crypto world - it claims to be only a middleman. It is one of the handful of banks still providing some banking services to the crypto world. Last year, it had to tap the FHLB for a large liquidity loan when it had a bank-run - surprising because the FHLB mission is to support housing (not cryptos) - I wasn't the only one making this observation. Many banks in such situation tap the Fed Discount Window but the Fed is more strict. It seems that as Silvergate financial situation worsened, the FHLB called its loan and that is one of the reasons causing its current difficulties.
Silvergate failure will cause some ripples in banking and cryptos (that were already in an ice-age).
The US Government right now is choking the cryptos of "oxygen" via regulations and stricter banking oversight.

Jason Zweig had an article in WSJ describing what @hank wrote above. It is about making lemonade out of lemon from treasuries.

Until last year, the Fed had kept interest rates near zero for most of the past decade-and-a-half. Investors became desperate for something, anything, that yielded more than 1%. Wall Street spewed forth high-yield debt, energy partnerships, emerging-market bonds, private credit funds, private real-estate trusts, business-development companies, floating-rate bank-loan funds—all sold on the premise that you needed to take extra risk (and pay extra fees) to get extra income.
But a 5% yield on short-term Treasurys is like kryptonite for the purveyors of that propaganda. “Why chase yield if you’re getting decent returns on a diversified, high-quality fixed-income portfolio?” says Julie Virta, a senior financial adviser at Vanguard Personal Advisor Services in Malvern, Pa.

https://wsj.com/articles/welcome-to-the-5-world-where-yield-chases-you-af3df384
At 4% treasury yield, how does that compete with stocks in general? In just 2 months, the 60/40 portfolio has rollbacked all the gain since the beginning of this year.

I don't think we were listed as beneficiaries, just as her heirs. We could have each taken one bond but the bank might have insisted the proceeds go to each of us in thirds. My sisters tend to not like anything financial and there were other issues to sort out like nominee interest etc.
I did all the research on how to handle it and knew far more about it than the bank officer

https://www.sec.gov/Archives/edgar/data/1535538/000174177323000598/c497.htm
497 1 c497.htm
948 P1 03/23
SUPPLEMENT DATED MARCH 1, 2023
TO THE PROSPECTUS DATED OCTOBER 1, 2022
OF
K2 LONG SHORT CREDIT FUND
(a series of Franklin Alternative Strategies Funds)
The prospectus is amended as follows:
The following paragraphs are added to the beginning of the “Fund Summary” and “Fund Details” sections of the prospectus:
On February 28, 2023, the Board of Trustees of Franklin Alternative Strategies Funds, on behalf of K2 Long Short Credit Fund (the “Fund”), approved a proposal to liquidate and dissolve the Fund. The liquidation is anticipated to occur on or about May 12, 2023 (Liquidation Date); however, the liquidation may occur sooner if at any time before the Liquidation Date there are no shares outstanding in the Fund. The liquidation may also be delayed if unforeseen circumstances arise. The Fund may deviate from its investment objective and investment strategies at any time prior to the Liquidation Date.
At the close of market on April 3, 2023, the Fund will be closed to new investors, except as noted below. Existing investors who had an open and funded account on April 3, 2023, can continue to invest in the Fund through exchanges and additional purchases after such date. The following categories of investors may continue to open new accounts in the Fund after the close of market on April 3, 2023: (1) clients of discretionary investment allocation programs where such programs had investments in the Fund prior to the close of market on April 3, 2023, and (2) Employer Sponsored Retirement Plans or benefit plans and their participants where the Fund was available to participants prior to the close of market on April 3, 2023. The Fund will not accept any additional purchases after the close of market on or about May 9, 2023. The Fund reserves the right to change this policy at any time.
Shareholders of the Fund on the Liquidation Date will have their accounts liquidated and the proceeds will be delivered to them. For those shareholders with taxable accounts and for Federal, state and local income tax purposes: (a) any liquidation proceeds paid to such shareholder should generally be treated as received by such shareholder in exchange for the shareholder’s shares and the shareholder will therefore generally recognize a taxable gain or loss; (b) in connection with the liquidation, the Fund may declare taxable distributions of its income and/or capital gain; and (c) an exchange out of the Fund prior to the Liquidation Date may be considered a taxable transaction and such shareholders may recognize a gain or loss. Shareholders should consult their tax advisers regarding the effect of the Fund’s liquidation in light of their individual circumstances. Participants in an Employer Sponsored Retirement Plan that is a Fund shareholder should consult with their plan sponsor for further information regarding the impact of the liquidation. In considering new purchases or exchanges, shareholders may want to consult with their financial advisors to consider their investment options.
Please keep this supplement with your prospectus for future reference.

The hypocrisy of "freedom loving, little government" conservatives using state governments to force companies to do their bidding is jaw dropping. DeSantis and Disney is the worst example, but the "ban-ESG" movement has bigger financial implications for most Americans.
There is some rationality being brought to the fight however. I turns out bankers do not like being told what to do
https://www.washingtonpost.com/climate-environment/2023/02/28/climate-change-wall-street-investments/
There are already documented instances of bond proposals costing towns and cities millions of dollars more in Florida and Texas because sales were delayed or postponed because of anti-ESG laws and the number of underwriters is much less.
There was also another article today ( which now I can't find, of course) that illustrates how "anti-ESG" conservative Governors are more than happy to take money for their states from renewable energy subsidies. I think Texas has the largest solar and wind farm footprint in the country.