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Where did SVB, as well as the broader banking sector, receive the money to bolster their portfolios with these debt holdings? In other words, stimulus payments. Billions poured in and needed to be stashed somewhere to generate some revenue. Before the Fed’s policies changed, it appeared to be a decent deal at the time.

That reminds me of a house of cards. Yet perhaps a better comparison would be to a game of pool where every shot raises a fresh set of problems. Intense government spending sparked by lockdowns led to debt that was swiftly monetized and finally led to inflation, which forced the Fed to change course and implement the biggest and fastest rate rises in history.

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