The Fed is completely incompetent, but these super sophisticated banks with people so smart and experienced they're worth zillions of dollars should be protecting themselves.

This same crap happens in every industry. Midland Texas has all kinds of fire sales on everything from $150k pickup trucks to company equipment to jets when oil prices fall because they don't hedge.

They are the bank. They are the ones responsible for their clients' money. They should be protecting it and not just blaming the fed for raising interest rates because it would cause poorly run/hedged banks to fail.