Sad last days of Silicon Valley Bank

Who's the one exception that their liquidity won't cover? Elmo?

The one exception is a run on the bank.

The failure will be tweeted.

Is that what they meant when they said "We have ample liquidity to support our clients, with one exception,” Becker said earlier on that Zoom call. “If everybody is telling each other that SVB is in trouble, that will be a challenge"?

But yeah, it's not Elmo.

Yes, R3. And the market was spooked.

Weird that the WHOLE banking market was majorly spooked by this. Odd. I’m thinking it was one of many market manic moves of 2023 - but we will find out today. I’m not seeing a logical reason for @ 20% drop in major banking institutions value. I think the market is hyper reactive lately - in a dangerous, yet opportunity-filled, way.

It's trading premarket at 54 now. This is insane! One of the hottest tech stocks of the decade just totally collapsed!

And Credit Suisse is still in freefall mode. Hopefully for good.

Armageddon if this spreads to the rest of the tech industry or the banking industry.

The only other time in US history a bank this big failed was 2008.

Sexy Bill Ackman is calling for a bailout.

Jim Cramer trying to pump it up

*checks coffee can*

Yep. Still there.

Yikes!!! Hopefully the government steps in and bails them out if things continue to go south. If they fail it is really bad for everyone

Below 50 now!

35 now! It's basically dead!

Cramer takes it back now.

Trading just got halted. Pending news.

*correction: “Sad last day of Silicon Valley Bank”

Always, ALWAYS do the opposite of what Cramer tells you to. This is called "Reverse Cramer". Google it for yourself and be astonished.

Now investors in First Republic Bank are getting spooked too.

r19 Also, never bet against Peter Thiel.

Oh lord, this is why I hate high finance. First, they always speak in code because, well, it's just too easy to come out and say what's really going on. The structure of the claim SVB made ("We have ample liquidity to support our clients, with one exception,") indicates that the exception is one client, not a general run... but I bow to those with superior understanding of the sector as to the meaning of this statement.

That said, if they had a $1.8B loss on a poor investment (selling $21B worth of treasuries at a loss due to rising interest rates), and they have the capital to cover most deposits, I don't see why this is a crisis such that their clients are fleeing. It doesn't help that scum-of-the-earth Peter Thiel told his investment clients to grab their cash, but it seems that the bank was and is in poorer shape than they're letting on. No one is lining up to buy SVB, and their one angel investor (General) has gone quiet. And when Jim Cramer weighs in, you know there's major news afoot that he's misinterpreted or is misrepresenting and are wise to follow R19's advice to do the opposite.

Bottom line, a "correction" is clearly here. The tech sector has been busy laying people off despite the strength of the economy overall (today's job report again confirms that unemployment will remain low and jobs are plentiful). Now, tech's bank has collapsed and the only question is how spectacularly.

Is this a repeat of the tech bubble bursting a la March 2000?

Wow, I just watched a Bank disappear in real time. Hope it doesn't spread.

They specialized in high risk tech startups. That sounds like fun.

Who owns SVB?

Vanguard 11.25%

Blackrock 8%

State Street Corp 5.2%

P Morgan Chase 4.25%

Why does this guy still have a job?

The comments on his twitter account are brutal.

I wonder if VC hottie Josh Kushner lost any of his money in this.

If you invested $1million in Silicon Valley Bank stock in 1987, you would have been a billionaire in 2021. Now in 2023, you probably won't even get your $1million back.

A bunch of faux "disruptors" are about to understand the true meaning of the word.

Some of them are even standing outside the bank's office to try and get their money back.

Swalwell wants every depositor fully bailed out. That's going to cost a lot of money.

R13 Why should the government bail them out? Why are corporations (actually the super wealthy) always protected from their poor investment decisions by the average taxpayer? I say no bailout!

First Republic was down 50% this morning but for now it's only 10%.

Also, people can't get their money out of Wells Fargo right now for some reason.

I work as a tech consultant is silicon valley and 100% of the companies I work with bank at SVB.

Yellen says the treasury is watching "a few banks".

Republicans are all for bailouts if you're high risk gambler but want to cut social programs for everyone else.

Contributing to Wall Street churn makes you an asshole, not a victim.

And furthermore, taxpayers are already on the hook for up to $250k per each deposit.

Well shit Rep Swalwell is a democrat. Fuck him too then.

PacWest Bank is getting hit the hardest of the surviving group right now. Down 30% so far.

Eric is wrong here. These are a buch of rich techholes. There is a risk to it all and the goverment can’t bail them out here. It just can not happen. It would enrage all of us who are not being bailed out of price gouging landlords.

Wait his calling for the goverment to cover more than the $250k??

ABSOLUTELY NOT!

Banks are supposed to have enough money to cover deposits in 2008.

*since 2008

The Dow is down 350 points today, which is bad but not 2008 bad.

Peter Thiel is behind all this and trying to cause an economic collapse while the rethugs have the house.

Why there is not a media detail assigned to him 24/7 is a mystery.

R44 I've got a feeling we're at the beginning of something scary here. Bank runs, FDIC bailouts. The government drowning in debt. Not good.

A lot of startup founders are going to have very awkward conversations with their investors today trying to explain why they didn't take their money out yesterday when they still had a chance. One guy was bragging on Twitter yesterday about keeping $14million in the bank.

all Peter needed was one bank to get it stated. He’s probably been planning this for years. And he got his chance yesterday.

The Fed is really hoping they can time the recession and make sure it's over right before the election. Voters only remember things that happen in the last 4 weeks.

FDIC insurance is there to cover up to $250,000 per account. You can have additional accounts with say, a different name like 2 co-owners and that would be covered up to another $250,000. But if someone has so much money that they can't break it up and take the time to put multiples of about $250,000 in different named accounts and/or at different banks, that's on those rich persons! I generally like Swalwell, but he's wrong on this.

Good old fashioned bank run.

Swalwell's concern is about the employees of the companies that didn't pull their money in time, their contractors, vendors, etc. It's not as simple as "Ha! Rich people lost their money." Non-wealthy people are hurt the most when payroll isn't made.

This is not the government’s problem outside of the $250k.

Those employees can get another job and go on unemployment in the meantime.

Thiel is not an American. he is just here to cause chaos. Didn’t he fund the Jan 6th attack? why did the feds stop at the grunts? Nobody from the Willard hotel has been arrested.

I saw on Bloomberg that 93% (!) of the bank's accounts are over the $250,000 FDIC limit.

R52. I see your point but if you can't figure out how to prioritize payroll through insurance that's on you and your company, not the taxpayers. If everyone has an excuse on why they need a bailout where is the moral hazard?

I'm reading chat that Goldman Sachs or another big bank might buy SVB, which would be a win for all concerned except stockholders of SVB who would lose big time.

PacWest Bank is an insatiable bottom.

[quote] If everyone has an excuse on why they need a bailout where is the moral hazard?

I meant to say you HAVE moral hazard. That's when you don't have to suffer the potential consequences of a risk.

Fuck you. No bail-out.

CNN finally covering it. They waited until after the markets were closed. Matt Egan is pretty goddamn sexy.

Deport them.

Greg Becker keeps his money, though, right?

Is Wells Fargo in trouble? Not sure I fully understand this. This affects the big banks? Sorry...finances are like another language to me.

Weren't there SVB bigwigs convicted of financial crimes a year ago?

r64 If they are, it's the end of the world. They're currently blaming it on a technical glitch though which is 99.9% likely the case. Still a strange coincidence.

Thanks R66. I went online at WF and I see the "technical glitch" message...

r67 Yeah pretty scary. I need it to be 6:30pm already so David can explain everything that's happening to us.

Just published 20 minutes ago

How things can unravel...at least potentially, so fast! Holding onto hope. The market reacts so aggressively.

Goldman was helping SVB raise capital, but you know some other part of Goldman was shorting the fuck out of SVB at the same time.

If you far exceed the 250K FDIC will cover simply put your money in 3 month treasuries via a brokerage firm.

Or just open an account in another bank, R72

Swalwell's comments are a bit premature. SVB isn't so insolvent that everyone or even a preponderance of clients are going to lose their deposits. They're having a severe cash crunch of their own making and will be sold to another bank, but the underlying assets are still there. This is why we have the FDIC and regulators can descend upon the bank and handle these matters before it turns into a full blown meltdown.

That said, the only thing that has changed in our financial system since the 2008 crisis is the big banks got bigger. This must come to an end. Hopefully this liquidity crisis will spur the Biden Administration and financial regulators to step in and break up the big banks and issue sweeping regulatory reform designed to protect taxpayers from having to bail out banks again under the socialized-loss-privatized-gain scenario that Republicans created and put on steroids after '08.

High rent, suck it up buttercup. High student loans, suck it up buttercup. Eggs for $6.79 a dozen, in Florida no less; suck it up buttercups. Tech gamblers losing money; we must bail them out 😱

I assume some of Swalwell's anxiety is due to rumors that more than 90% of SVB accounts have balances that exceed FDIC limits.

The 2008 meltdown was the result of uneducated, Americans taking out huge loans to purchase mcmansions they could not afford to pay back.

And this?

It's time to bury that hoary old cliche "too big to fail."

This place, and the crpto currency bank Silvergate that's also about to fail were nothing but houses of cards built on quicksand, and any moron with half a functioning brain could see it. Time to let the dude bros face the music they created and let them fall flat on their faces.

Next up: GM and Ford. Time to let them go under. They've abandoned the low and medium priced segments of the market to focus on building 80K pick up trucks and 100K SUVs that are every bit as shitty as the automobiles they've been foisting on the US market for the last 50 years. Just for the sake of a quick, easy buck.

I didn't include Chrysler on the list as they're already foreign owned, but two of their four brands, Dodge and Chrysler, are on life support simply because they've been starved of money for new model development for decades and expected to die any day now. They're now concentrating on 80K Rams and 100K Jeep Wagoneers that fall apart after a year.

LETS GET THIS PARTY STARTED

after I call my accountant and pull us out of all our bank stocks

Fuck wells fargo. it's already the worst bank in the world, anyone who banks there deserves to lose everything. DUMB CUNTS

R72, what 3 month treasuries are you talking about? I've lost so much money in my roth ira. is this a good time to buy stocks like MSFT? or MU?

what about bank of america? any rumors?

SKANK OF AMERICA

Nice summary from a cutie with big dimples

Bail them out? Yeah---after confiscating all the savings of the CEO, CFO, and Board. Their homes alone should total at least $15 million.

Fuck off with the handouts. Greedy scumbags.

First, Trump rolled back railroad safety regulation that would have specifically prevented what happened in East Palestine.

Then Trump rolled back banking regulation that would have specifically prevented what's happening in Silicon Valley:

[quote]In 2018, Mr. Trump signed a bill that lessened regulatory scrutiny for many regional banks. Silicon Valley Bank’s chief executive, Greg Becker, was a strong supporter of the change, which removed the requirement that banks with assets under $250 billion submit to stress testing by the Fed, and changed requirements for the amount of cash they had to keep on their balance sheets to protect against shocks.

Guesses for the third time Trump's sell-out to lobbyists and industry will cost us? How long will we have to pay for Trump's blatant violations of the Emoluments clause?

Read more, all ye who post here, and despair.

[quote] Swalwell wants every depositor fully bailed out. That's going to cost a lot of money.

Thank god somebody is looking out for our silicon valley millionaire underclass

Grift, baby, grift.

He says he wants to help the employees of the depositors, so they get their paychecks when they need them.

[quote] Nice summary from a cutie with big dimples

Look out Jonathan Groff. You got some competition.

Whatever. Forgive the student loans of the employees and move on.

It's only SVB and Silvergate Bank having trouble. All the big banks are fine. This is not a repeat of 2008 by any means. I work in a big bank and we have more liquidity than the pacific ocean. We never got involved in any crypto shit or stupid stuff. As a matter of fact the smart clients of SVB sent deposits to us before the FDIC shut them down. Shame on them that sat on their hands

Fears Silicon Valley Bank collapse could topple First Republic Bank next, as shares slump 40% in a month and investors voice concerns over losses on its investments

More than $70 billion wiped off crypto market in 24 hours as bitcoin drops below $20,000

Donna Reed will bail them out!

Biden.

What about First Republic Bank??? That's now the headline on the DM. Do you think they will hold strong? I am gorgeous but have no head for numbers. Financial experts? I bank with them as do many people I know. Friends aren't getting their paychecks from SVB.

What's the connection between First Republic Bank & SVB's problems?

[quote]the only thing that has changed in our financial system since the 2008 crisis is the big banks got bigger. This must come to an end. Hopefully this liquidity crisis will spur the Biden Administration and financial regulators to step in and break up the big banks and issue sweeping regulatory reform designed to protect taxpayers from having to bail out banks again under the socialized-loss-privatized-gain scenario that Republicans created and put on steroids after '08.

Yeah that's not happening. Just late last year the regulators approved the acquisition of Union Bank by U.S. Bank, which just created another very large bank as of Dec 2023. MUFG Union Bank was already one of the largest foreign-owned banks in the US and U.S. Bank was also large. Definitely no trend of breaking things up or declining to approve mergers.

^ I meant as of Dec 2022

As of Jan 2023, largest banks by asset size. The US Bank acquisition of Union Bank put it into the top 5 in the U.S.

JPMorgan Chase – $3.31 Trillion. Bank of America – $2.41 Trillion. Citigroup – $1.714 Trillion. Wells Fargo & Co. – $1.712 Trillion. U.S. Bancorp – $591.21 Billion.

R89, One must wonder, then, at the point of the FDIC insured limit and at Democrat Swalwell's reasoning.

He should uphold the safety of $250,000 per customer. It's not like we don't know these caveats.

R96, Can't feel sorry for the greedheads. They could have sold at $65K.

Thinking back I believe there were also certain politicians who demanded the taxpayer reimburse all of Bernie Madoff's clients.

Roku discloses it has $487 million in deposits at failed Silicon Valley Bank. That’s 26% of its cash.

r107 And yet strangely, its stock only fell 3% points so investors must be expecting they'll get bailed out. Either that or they didn't have a lot of money saved to begin with.

With the depositors being able to to each retrieve $250K of government guaranteed funds - does anyone know how much that will total?

Bailing out yet another bank.

r109 The bank has enough assets to pay the 3% of accounts that were under $250k. The 97% that were in the millions and billions are screwed.

Crikey R110. A 97% loss.

This is the kind of thing that can cause stock market crashes via panic selling isn't it?

I thought that pic at OP was Sam Smith in men's clothes!

There is a lot of misinformation in this thread. Uninsured depositors will get most of their money back. The problem is how long they will have to wait to get it.

[quote]The FDIC’s standard insurance covers up to $250,000 per depositor, per bank, for each account ownership category. The FDIC said uninsured depositors will get receivership certificates for their balances. The regulator said it will pay uninsured depositors an advanced dividend within the next week, with potential additional dividend payments as the regulator sells SVB’s assets.

[quote]Whether depositors with more than $250,000 ultimately get all their money back will be determined by the amount of money the regulator gets as it sells Silicon Valley assets or if another bank takes ownership of the remaining assets. There were concerns in the tech community that until that process unfolds, some companies may have issues making payroll.

[quote] The 97% that were in the millions and billions are screwed.

Oh damn. Not 𝑎𝑔𝑎𝑖𝑛.

Any one understand what USDT and USDC are? Some kind of bitcoins? It's connected to this story somehow and trending top of twitter right now.

R113, only if the assets are worth what's lost (highly doubt it) or the Fed can strong arm another bank to buy it.

This is scary- all the coverage is painting the issue as "high interest rates and mortgage backed securities", yet treasuries are what SVB sold at a loss which triggered the panic. That's their most liquid asset...

There's a total head in the sand attitude regarding Crypto, which makes me think EVERYONE is obfuscating about how leveraged tech finance is into rapidly crumbling Crypto. "We made billions, 200% in 2021"... was it real?

USDC is a "stable coin" crypto that was ABSOLUTELY supposed to be equal to $1 US.

Another set of people involved is anyone who owned stock in the bank. Those people are probably going to lose 99% of their stock's value. It was a hugely successful stock throughout the whole tech boom.

This could have largely even avoided if selfish tech people simply didn’t do a run on the bank.

That’s what makes them selfish….

[quote] R96, Can't feel sorry for the greedheads. They could have sold at $65K.

They did sell. It's the ones who bought theirs at $65 who are screwed.

[quote]This could have largely even avoided if selfish tech people simply didn’t do a run on the bank.

Peter Thiel's going to have one of the strangest obituaries of any billionaire.

r121 He's not going to die, he does vampire blood infusions.

Wells Fargo is ok now. Went online and no glitch messages. No problem transferring money.

If you believe the “technical glitch” bullshit, I’ve got a handful of bridges I’d like to sell you.

No more fucking bailouts.

If the govt can’t regulate how banks invest, the govt shouldn’t bail out banks that invest badly

Things should more or less work out. Depositors may get the bulk of their money, eventually. Using the WAMU collapse as an example, depositors got their $250,000 plus 50% of any amounts over that.

The difficulty won’t be the loss of Mom and Pop’s savings - they’ve only got $5,000 in the bank (if that). The problem is Pop’s employer may only have $250,000 immediately available with which to pay contractors, rent, utilities,, taxes and payroll for its 300 employees.

That’s $833 per employee. Assuming he stiffs the first three. The $833 will be further reduced because if he doesn’t deduct and submit payroll taxes he could go to jail.

The remainder of the money (say 50%) will become available once the FDIC shifts through the shambles. But by then Mom and Pop / frantically looking for work - will likely have run through their savings, and may have lost their house, their credit and their car.

r126 Even then, they have to get lucky and get bought out which is more the exception than the rule. If this is isolated no big deal but if it leads to a couple other banks failing like First Republic, then we are in for a full scale crisis.

Damn it, I recently opened my 2023 Christmas Club account there. When can I expect to get my money? I want my buy my husband a Cashmere sweater.

Christmas Clubs still exist?

Dear - Just put the sweater on lay-a-way.

Sorry, this crying about not able to meet payroll is blatant propaganda. Of course some people will suffer, but SVB was focused on the tech industry--it's not like all this uninsured currency of venture capitalists, basically confined to the financial industry, was helping mom and pop or you and me. That's trickle-down bullshit economics. One of SVB's weaknesses was this very lack of diversification. Lesson learned. No bailouts.

Businesses fail all the time. We don't bail them out because people won't get paid otherwise. That's what failure looks like. The only reason to even consider a bailout is the risk of contagion which is not happening here.

Tech workers were typically highly compensated in a way that was untethered from their contributions or value. I’d rather see bailouts go to care workers and teachers.

Makes sense R131. Thank you.

R131 They are already trying to frame a potential bailout in a way that the public might accept. But the public will not accept it. It's extremely unpopular. This is political kryptonite. I hope the Dems with ties to Silicon Valley realize this issue could cost them an election.

R117, They can join the club.

[quote] There is a lot of misinformation in this thread.

THIS thread?

This interested me. Airline executives received bonuses. Why? Based on the failure of the industry no bonus was acceptable

[quote] Christmas Clubs still exist?

They sure do. It's month three. I think I have enough for a Jasper DeKimmel.

You didn't specify which part of the discussion is misinformed.

Why is that?

Big supporting example for me, r131: Bethlehem Steel. Kaput. Gone. No government bailout, though arguably its product had been far more essential to America than, say, GM or Ford Motors. After a decade of rotting, it was replaced by a casino, shops, concert venue, and hotel.

There are plenty of other banks.

But what this event should remind us all---again, and yet again---is of the criminal class that actually owns these money-trading institutions.

Exhibit A:

R24 is a moron. It was a glitch. Happens all the time it was notable this time because idiots like you think it was related to SVB.

It's unnerving that everything seems to be bound by a thin thread. The ripple effect is scary, but hopefully....this is more isolated....for now. The interest rate tinkering plays a big part in this. The .5 or 1% rate increases puts strain on the banks, especially the smaller banks. They're not prepared, as they should be. It's irresponsible. That's why people are pissed.

Don’t disagree R131

As I said, companies likely will get at least 1/2 of their deposits back - eventually. For some, perhaps during bankruptcy.

So no bailout is warranted.

But there’s going to be personal pain.

[quote]You didn't specify which part of the discussion is misinformed.

I'm not that poster, but people on DL and elsewhere are taking the 97% figure to mean that the 97% of accounts that had over $250,000 in the bank won't see a penny over $250,000—but that's not true. SVB had assets that the FDIC will sell and use to partially credit to account holders who had over the insured amount. But it will take time, and they still won't see a total recovery, but it's far from likely they will lose everything over $250,000. So it's not, as some have stated, a 97% loss.

The people who WILL see a total loss are stockholders in SVB. The executives at SVB should be fined and jailed for selling so much stock over the past few weeks and months before the problems became public, but of course that won't happen.

Another issue for startups that relied on lines of credit from SVB is that they now probably have to go out and loan money from other insititutions at the now higher rates.

*go out and borrow money from other institutions, not loan

R118, Peter has Aspergers too ?

In many third world countries banks are not trusted at all. They are seen as the enemy. If one accrues wealth it is used to buy a property or build a new room on the house. Cash is considered a liability and is spent quickly to avoid loss through inflation. I see the beginnings of this situation in the USA. The investment in real estate despite its stupid price is a perfect example. The USA can bring money into existence to bail out these depositors but it does political damage to do so. The vail of civilization is thin.

R144 is correct.

The upside of this is that the FDIC did its job. By stepping in early it now has SVB assets it can sell to pay to depositors. All insured accounts will have access to them on Monday morning. The rest will have to wait and will take a 'haircut' on their deposits but will not lose everything.

A bailout is absolutely unnecessary. Any of these talking heads in the news advocating bailout are trying to protect their billionaire investment community, not mom and pop. And they probably own SBV stock, the losers.

I have high-yield savings accounts at several banks and I always make sure to keep the balance under $250K. I just hope they don't go back to the old limits anytime soon.

Big crash coming ?

I think localized Bay Area crash. Not country or worldwide. But my more financially literate partner disagrees and preaches calm and caution.

But I think the Crypto impact is being downplayed.

The All-In tech VC podcast guys just talked about this this morning, it's an interesting listen

There's no crash coming although people are creaming themselves over the possibility.

The FDIC did what it is supposed to do. People should be relieved that some lessons were learned after 2008.

Why would Peter Thiel have a hand in this?

[quote] In many third world countries banks are not trusted at all. They are seen as the enemy. If one accrues wealth it is used to buy a property or build a new room on the house. Cash is considered a liability and is spent quickly to avoid loss through inflation.

The housing market also loses value.

R153, is a delusional optimist

R153, I hope not- but why is TechCrunch, Barrons, CNN, etc, ignoring the Crypto impact on SVB? It seems like deliberate obfuscation. I feel like FTX=Bear Stearns, SVB=WaMu, and history is repeating...

The mortgage backed securities excuse is bullshitty (they're their most liquid asset) and a bank can't be this ill equipped for rate changes.

Something is amiss. And I think it's hidden over-leverage in tanking Crypto.

Did AI really write this?

Thiel told his investors to pull out of svb. Cynical people might think he helped orchestrate this run.

And nobody has seriously used the term "third world" since the Soviet Union collapsed.

Betrays your leanings towards Rupert-Murdoch-owned fascist media.

Here is what my Bing Chat told me

Hello, this is Bing. I can try to explain the Silicon Valley Bank collapse using monkeys and bananas, but please note that this is a simplified analogy and not a complete or accurate representation of what happened.

Imagine that there is a big forest where many monkeys live. These monkeys like to make new things with bananas, such as banana bread, banana smoothies, banana phones, etc. These new things are called **start-ups**.

Some of these start-ups are very successful and attract many other monkeys who want to buy their products or invest in their future growth. These start-ups need a lot of bananas to keep making new things and paying their workers.

There is a big tree in the forest where many bananas grow. This tree is called **Silicon Valley Bank (SVB)**. SVB has a lot of bananas because it lends them to start-ups at high interest rates or takes a share of their profits. SVB also keeps some of the bananas that other monkeys deposit with it for safekeeping or earning interest.

One day, something bad happens in the forest. The weather changes and there are fewer bananas growing on other trees. Some of the start-ups fail because they run out of bananas or their products are not popular anymore. Many monkeys lose their jobs or their investments.

The start-ups that still survive need more bananas to keep going, but they have trouble finding new investors or customers who are willing to give them more bananas. They decide to withdraw some of the bananas that they have deposited with SVB or ask SVB for more loans.

But SVB does not have enough bananas to give them all. It has lent out too many bananas to risky start-ups and has not kept enough reserves for emergencies. It also has trouble getting back some of the bananas that it lent out because some start-ups cannot pay them back.

When other monkeys hear about this, they get scared and want to withdraw their own deposits from SVB too. They form long lines outside the tree and demand their bananas back.

This is called a **run on the bank**⁴. It makes things worse for SVB because it has even less bananas left to pay its depositors or its lenders.

Eventually, SVB runs out of bananas completely and cannot operate anymore. It collapses under its own weight and falls down with a loud thud.

This is called a **bank failure**⁴. It affects many other monkeys in the forest who lose their deposits, their loans, their investments, or their jobs because of SVB's collapse.

The government steps in and tries to help some of the affected monkeys by taking over SVB's assets and liabilities³²¹. But it cannot save everyone or everything.

Some experts say that SVB's collapse was caused by its own mismanagement⁵, while others say that it was a result of external factors beyond its control⁶.

Either way, it was a big shock for the forest and its inhabitants.

There's a lot of room between losing everything above $250K and losing nothing. "A haircut" seems like a cutesy euphemism for losing a large percentage and yes, potentially most, of millions deposited. I am not sure how anyone can be confident that they will get most of their money back above FDIC levels. If there is a buyer, yes. But not at all clear. Not saying I have much sympathy, but still.

This could be much worse than 2008

R163, I don't think so because that involved so much of the country, all of their savings, and their homes.

This is more localized and Wall Street has treated Silicon Valley like a cool, but irresponsible little brother who you party with and do some coke in Vegas with, but you don't allow to sleep at your family home.

[quote] If you invested $1million in Silicon Valley Bank stock in 1987, you would have been a billionaire in 2021. Now in 2023, you probably won't even get your $1million back.

Well, that’s life. It’s all a matter of luck and/or knowing when to get out.

I began my legal practice with a friend who did tech stuff. She got tons and tons of dot comm shares. She got increasingly disenchanted with legal practice and even more so with the law firm. In late 1999 she decided to quit and cash in her tech shares and sort of float free for a year to see where she wanted to go from there.

She finally cashed in her internet biz shares in late February 2000. She got tens of millions of dollars out of it. About a hundred times what it was worth when she got it. The dot com implosion happened a few weeks later.

She didn’t work for years, but then decided to teach, which she does now.

If she had waited another month, her internet shares would have been worthless.

R161 Who cares what AI has to say? Who would waste time reading that moronic nonsense you posted?

R162. I'll never understand why you feel any sympathy for billionaire investors losing money through their own recklessness. "Haircut" is an apt term for these greedy VC crybabies acting like they're ruined. They should thank the government that they despise for giving them anything at all.

I agree . People are very nervous right now

Eh, I know good people who just formed idealistic, worthy VCs (late 30s) after finally getting the cash together, and everyone felt compelled to bank with SVB. This is shocking.

And I have Bay Area real estate agent and assistant friends, service friends, low level engineer, teacher friends- as well as spoiled socialites and rich entrepreneur friends and family - all kinds of people in the Bay could be hurt by something like this.

R168 the government? Really?

These investment banker types but billions into slandering the US government wanting to drown it in a bathtub, but now now ‘they better do something’ to fix the mistake of those same greedy assholes.

Bibi is worried

Janet Yellen does not inspire confidence. She seems like an old lady who skims the headlines and takes naps, but is not up to speed or proactive..

Privatize profits and socialize losses, is superb. I would never be able to think of a more succinct way to describe this GRIFT.

I don't think they'll get bailed out. Pelosi, Lee, Waters, and, Swalwell (a child basically) have no juice right now. Harris and Newsom shouldn't/wouldn't/couldn't touch it.

Feinstein is in the hospital and essentially done.

Who would fight for a Silicon Valley bailout? This isn't GM.

It's not just limited to tech. There is a trickle down effect. Fraus are not receiving their payments from their ETSY businesses. It's funny, but not. Hopefully this is contained because while people might think this is a wealthy tech problem, it will effect many small business who pay salaries to normal people who are just doing their jobs. The video at R152 is helpful, informative and balanced in the explanation of the situation. I'm really trying to be more educated about these things.

The solution would be for SVB to be absorbed by one of the top 4 banks and then given relief to bail out those with substantial investments to keep the situation from cascading.

Does this mean San Francisco will be affordable again?

It should be interesting what next week will bring...brace yourselves.

The only safe place to keep your money is in your brassiere!

[quote] Does this mean San Francisco will be affordable again?

Maybe. In terms of buying, no one wants to sell so the limited inventory is still making the market competitive, but the transaction volume is low. Rents are more affordable now than they were before the pandemic but it's all relative. In 2019, you might pay $3500 for a studio or small 1 bedroom averaging around 500 sq ft, where as now you might be able to get the same thing for 2300-2600, but it's still extraordinarily expensive. This situation will definitely have an impact on the Bay Area and San Francisco, which is really the one major city that really hasn't fully "come back" from the pandemic like LA, NYC, etc.

[quote] Peter Thiel's going to have one of the strangest obituaries of any billionaire.

He also deserves the largest pile of shit to be deposited on his grave.

Perhaps that’s why he is trying to live forever?

R180, are you in real estate??? I'm dying to know where the companies have been banking and mortgages are held, if many are still with BofA or Wells Fargo, or if firms have jumped on the SVB bandwagon. That would be such a closed circuit short.

What of those RocketMortgage.com type companies? Could the bank formerly known as SVB hold the mortgage for owner A, as well as the startup funds for their company and their payroll? I can't say too much.

I would say that the bank that the majority of the Bar Area uses is First Republic Bank. They are everywhere here, similar to Wells or B of A might be elsewhere, which has everyone jittery at least until Monday. For mortgages, a lot of people will use First Republic based on relationship, Wells, etc. Mortgage brokers like RocketMortgage.com are not as widely used because most buyers (and seller/agents) prefer a local lender who can be easily reached and will respond quickly. You never know who is dealing with underwriting when going with an online mortgage broker. In multiple offer scenarios, sellers want the least amount of risk, especially if there are 10+ offers on an entry level property just under 1M. A small fixer at 995K might get 20-30 offers - sellers can be selective and the offer to be as non contingent as possible.

All those low wage earners who took out loans they could not afford in the late 1990s and early 2000s to purchase homes causing a great recession ultimately blost their homes.

It turns out their homes were not lost all.

Guess who was able to purchase these properties for under their value???

Low wage earners who take out loans to purchase a half million dollars home are stupid and deserve to live in their car?

Silicon Valley depositors are savvy investors who are just going through a bad time due to unforeseeable conditions and need bailing out?

SFGATE tech editor Joshua Bote on Allbirds flapping into oblivion

[quote] She seems like an old lady who skims the headlines

How embarrassing for you, Matt-fatso, considering that she led the Fed before this gig in a cabinet.

And even if it were true that all she does is “skim the headlines,” an absurd accusation, that would still put her in a better position than your mancrush, trump, who never read a word about anything, ever.

^Hillary

BREAKING: Silicon Valley Bank's president successfully pressured lawmakers to weaken bank risk regs before his bank's collapse, according to records reviewed by @LeverNews .

He touted the “low risk profile of our activities & business model.”

Saw this 'reported', but could only find it on a twitter account; don't know if it's true or not.

BREAKING: HARRY AND MEGHAN STAND TO LOSE MILLIONS IN COLLAPSE OF SVB BANK

thanks for the laugh. Everything is related to Hegs.

Excuse me, they were not persuaded to soften regulations. They are whores, no persuasion required.

Will this tank our economy ?

Shady

R87 yeah, no.

[quote]Saw this 'reported', but could only find it on a twitter account; don't know if it's true or not. BREAKING: HARRY AND MEGHAN STAND TO LOSE MILLIONS IN COLLAPSE OF SVB BANK

So I guess Jackie won't be the only member of "American royalty" to have to go On Assistance.

Shady is right, r193! Two quotes from the linked article:

[quote]Silicon Valley Bank employees received their annual bonuses Friday just hours before regulators seized the failing bank, according to people with knowledge of the payments.

[quote]The size of the payouts couldn’t be determined, but SVB bonuses range from about $12,000 for associates to $140,000 for managing directors, according to Glassdoor.com.

R195 oooh. And they have ticked off Charles, ‘royally’ with that video putting down the Queen. Hahaha.

I could be wrong, but I don't believe any bank customer has lost money since the 1980's savings and loan crisis. Even those who were over the FDIC amount. The FDIC was able to get another bank to absorb the insolvency or sell everything (including the kitchen sink) and get all the money.

Am I incorrect? (total could be)

The collapse of Silicon Valley Bank was totally avoidable.

In 2018, Wall Street pushed a deregulation bill that allowed banks like SVB to take reckless risks. It passed, even as I and many others warned of the risks.

I am writing legislation to reverse that law, S. 2155.

When the Dems spout GOP talking points, we are good and fucked.

“We must make sure all deposits exceeding the FDIC $250K limit are honored. Banking is about confidence,” Rep. Eric Swalwell (D-Calif.) said on Twitter. “If depositors lose confidence on the safety of their deposits over 250k then we are in trouble.”

Rep. Ruben Gallego (D-Ariz.) also tweeted that the FDIC “must work to protect deposits exceeding the 250k limit and keep [Arizonans’] money protected.”

“… wealthy clients frantically pulled their money from SVB after it collapsed and rushed to put it in large banks, like JPMorgan or Bank of America”.

Woke= en word lover

Ruh-roh

Agree r132...I have a hard time giving a shit about these people who had more than the FDIC insures.

And the tech industry CEO's have been the biggest recession mongers since the pandemic started to let up...I've suspected for the last year that they would try to take down the whole economy once their bullshit overvalued companies started failing.

[quote] With the depositors being able to to each retrieve $250K of government guaranteed funds - does anyone know how much that will total? Bailing out yet another bank.

R109 Depositors being paid their insured deposits up to $250k is not a bailout scenario. Insured is the operative word here. Because these deposits are insured up to the $250k limit, depositor claims in the event of a bank failure are covered by regular premiums paid to the FDIC by its member banks.

Deposits *over* the insured limit are another matter, and there are several scenarios that usually occur which determine how much depositors may get paid back. The most common -- and may still happen with SVB -- is that a healthy bank with a strong enough balance sheet buys the failed one out of receivership and assumes its assets and liabilities including deposits. In this case, FDIC payouts don't even have to kick in; the deposits and loans are assumed by the acquiring bank and merged into that bank's balance sheet. You can bet that Fed and Treasury are working nonstop this weekend toward this outcome, to see if they can auction off the bones of SVB to, say, Goldman Sachs or Morgan Stanley as possible suitors.

If no white knight comes to the rescue, then the FDIC proceeds to liquidate all the bank's assets (think fire sale -- securities, equipment, office furniture, etc.) to pay back as much as they can to depositors over the insured limits as well as creditors. The bank's equity shareholders get wiped out. Lastly, depending on the unique circumstances of the bank's failure, Congress and the White House could pass legislation to bail out whatever difference isn't covered by the liquidation.

EDIT: You can bet that Fed and Treasury are working nonstop this weekend **with FDIC** toward this outcome...

FDIC administers the auction process. Fed and Treasury give a damn because they do NOT want markets to open on Monday with no white knight and risk of the contagion crisis spreading.

I posted r189. I am so disappointed in the lack of humanity.

I can't believe the cruelty and selfishness of the people here who don't want to bail out the downtrodden depositors like Meathead and Meghan. Please look into your hearts and dig deeply into your bank accounts to help this poor couple and their tiny, little baby prince and princess.

I beg you: Won't somebody think about the children!?! I'm sure they need new tiaras; you can't expect them to wear some stuffy, ancient headpieces.

R189 / R207

"iSource News"...? Yeah, that looks like a credible news source. Did they also peddle ivermectin and hydroxychloroquine as cures for covid? 🙄

Privatize the profits, socialize the risks. Congress week likely bail them out and make the account holders whole. All that while student loan debtors get shit on.

When you think about it, the whole financial system is a house of cards. This starts on the high level with the national debt, then corporations borrowing money to buy back stocks, to homeowners with mortgages down to credit card debt. If everyone tried to collect on debt all at once, it would be a disaster.

A 𝒉𝒆𝒂𝒅 𝒐𝒇 𝒓𝒊𝒔𝒌 𝒎𝒂𝒏𝒂𝒈𝒆𝒎𝒆𝒏𝒕 𝒂𝒕 𝑺𝒊𝒍𝒊𝒄𝒐𝒏 𝑽𝒂𝒍𝒍𝒆𝒚 𝑩𝒂𝒏𝒌 spent considerable time spearheading multiple “woke” LGBTQ+ programs, including a “safe space” for coming out stories, as the firm catapulted toward collapse.

Jay Ersapah, the boss of Financial Risk Management at SVB’s UK branch, launched initiatives such as the company’s first month-long Pride campaign and a new blog emphasizing mental health awareness for LGBTQ+ youth.

“The phrase ‘you can’t be what you can’t see’ resonates with me,’” Ersapah was quoted as saying on the company website.

“As a queer person of color and a first-generation immigrant from a working-class background, there were not many role models for me to ‘see’ growing up.”

Her efforts as the company’s European LGBTQIA+ Employee Resource Group co-chair earned her a spot on SVB’s “outstanding LGBT+ Role Model Lists 2022,” a list shared in a company post just four months before the bank was shut down by federal authorities over liquidity fears.

People seem to be blaming SVB for being woke but it really was because they made bad investments with their capital and couldn’t cover the cash outflows caused by technology being in desperate straits due to interest rate increases. They tried to raise money but it was too late once the word got out.

And yes, Janet Yellen and Chairman Powell need to retire. They are guessing and making bad decisions (raise debt ceiling and raise interest rates and hope for the best).

R212 don’t forget that mental illness is rampant on the Right. Inserting Meghan and wokeness into this story is something you have to be mental to do.

This has nothing to do with woke.

Ruh-roh part 2

Bill Ackman

CEO The Pershing Square Foundation

𝑊𝑒 𝑠𝑢𝑝𝑝𝑜𝑟𝑡 𝑒𝑥𝑐𝑒𝑝𝑡𝑖𝑜𝑛𝑎𝑙 𝑙𝑒𝑎𝑑𝑒𝑟𝑠 𝑎𝑛𝑑 𝑖𝑛𝑛𝑜𝑣𝑎𝑡𝑖𝑣𝑒 𝑜𝑟𝑔𝑎𝑛𝑖𝑧𝑎𝑡𝑖𝑜𝑛𝑠 that tackle important social issues and deliver scalable and sustainable impact across the globe.

---------------

In other words he probably has money tangled up in this bank he wants protected

Probably. But he is just pointing out the obvious. People that have money in small banks will start pulling out their money.

I'm all for Congress passing legislation to bail out the billionaires as long as it includes a provision for student loan forgiveness.

[quote] Thiel told his investors to pull out of svb. Cynical people might think he helped orchestrate this run.

How does he benefit?

[post redacted because linking to dailymail.co.uk clearly indicates that the poster is either a troll or an idiot (probably both, honestly.) Our advice is that you just ignore this poster but whatever you do, don't click on any link to this putrid rag.]

The home despot is a maga retard.

Bill Ackman and his friends need to pony up the cash to bail out SVB.

Why are they looking for the federal government to solve a problem that the private sector is capable of solving?

Also, Ackman's novel-length tweet concludes that 98% of all deposits are going to be paid.

So why don't he and his friends extend no-interest (or as low interest as is allowed) working capital lines of credit to the affected companies to make payroll and operating expenses while the FDIC sorts all of this out? Take a lien on the FDIC proceeds.

One of the big banks will take over SVB. They understand how dangerous this situation is and that it is in their best interest to "take one for the team" and prevent an economic meltdown.

We'll see, r224. BoA was hammered with massive fines for what Countrywide and Merrill did after BoA took them over.

A big bank would be foolish to absorb SVB without a release of claims from the government, which will never happen.

The white knight bank will adsorb with a generous discount the assets of the bank and in addition take huge tax writeoffs with IRS connivance on the bad debts. They'll be fine, it's just a contest to see who can buy in most cheaply.

r224 I doubt it. JP Morgan did that in 2008 and they got completed fucked over by the govt. Even if they try to do the right thing and make a really strong deal, 3 months from now Elizabeth Warren or Katie Porter or some other dumb cunt will be on the floor of congress accusing them of being a "monopoly".

Society is fucked, because the masses got brainwashed to fight for the 1% to keep its power, money and dominance over the masses. Like, people who are in danger to lose their homes because of medical bills, or barely can afford groceries, being busy to make sure that the rich people are not going to lose money right now.

The Democratic Party needs to make sure everybody knows the recent scandals, catastrophes (trains derailing), SVB, are because Republicans pushed for safety measures being lifted.

Greed fucked them and now they demand help to keep their money. I bet there are texts and telephone calls how the 1% gets reimbursed while the remaining middle class gets screwed over and their up-to 250 grand accounts are gone (to pay for the 1%'s losses).

r228 It's going to be hard to make that case when they've been in power for the last three years.

r229, cleaning up Trump's mess takes a shit ton of time. Louis DeJoy still has his job, despite Biden trying to get rid of him.

The committee chairwoman of the House Committee on Financial Services in the 117th and 116th Congress was Maxine Waters. No wonder the banks had no trouble getting their sweetheart legislation passed.

[post redacted because linking to dailymail.co.uk clearly indicates that the poster is either a troll or an idiot (probably both, honestly.) Our advice is that you just ignore this poster but whatever you do, don't click on any link to this putrid rag.]

"The Democratic Party needs to make sure everybody knows the recent scandals ...."

The Democratic Party is bought and paid for. That's the scandal. Also, they had 2 years of total control and did fuckall. Fuck the Dems.

Why is it ok to privatize profit and socialize loss for these people?

the same who declare forgiveness of college debt is abhorrent?

The White House package would allow $50 billion in secured loans for the airline industry with limits on increases in executive compensation until they are repaid, according to a memo by the Treasury Department. But the head of one of the biggest U.S. unions for flight attendants scoffed in response.

“Is this a joke?” tweeted Sara Nelson, the head of the Association of Flight Attendants-CWA in response to the White House plan. “No more buybacks. No more bonuses. We need to make sure money goes to workers — period.”

Sen. Richard Blumenthal (D-Conn.) said he wouldn’t support $50 billion in loans to airlines unless more conditions are attached. Along with “really severe limits on executive compensation,” Blumenthal said there should be “conditions that protect workers.” He said pilots and flight attendants should have “better working conditions” and higher pay and that airlines must “commit to do better” in terms of charges, fees, baggage handling and seat size.

Earlier Wednesday, Senate Minority Leader Chuck Schumer also targeted airline stock buybacks in comments on the Senate floor. The practice has attracted criticism from progressive Democrats like Rep. Alexandria Ocasio-Cortez after the airline industry requested a nearly $60 billion bailout from Congress this week, including $29 billion in grants and another $29 billion in loans or loan guarantees.

“One of the reasons, let’s not forget, that many airlines are so short of cash right now is they spent billions on stock buybacks — money they had to send out when they should have been saving it for a rainy day, for their workers and customers,” Schumer said on the Senate floor Wednesday. “That issue should be addressed.”

The airline industry recovered. I only know this because one airline is attempting to purchase another with their windfalls.

But the stock buybacks did happen along with bonuses for the executives in the airlines.

Your company is failing under your leadership. You apply for government aid, received welfare and still line up a bonus?

Ok, we've been inundated with the MSNBC idiots who have no understanding of economics, finance or actual politics.

Damnit. This was such a good thread.

If you knew anything at all about anything, you would have posted it instead of that idiocy.

R237 means nothing.

Typical of maga retards.

Let us not post soundbites from MSNBC. Maga wants to source fox news instead.

r237 please, all you have said so far is that this bank failure will only impact the Bay area. As if, bitch.

You're trolling, right? You come into every thread screaming Maga when there's an actual discussion you can't intelligently contribute to and ruin threads. But you're just trolls.

What makes no sense is that they got killed for having Investments that were slaughtered because interest rates went up. Who didn't know that interest rates were thing to go up (and will continue to)? It isn't like they were going to stay at 0 forever.

What the fuck do you call what you are doing.

r242 They don't care because they expect to be bailed out every time.

Yes! No bank is allowed to be taken by surprise by interest rates.

Doubletalk today from Yellen.

"Let me be clear that during the financial crisis, there were investors and owners of systemic large banks that were bailed out...and the reforms that have been put in place means we are not going to do that again," Yellen told the CBS News Sunday Morning show.

"But we are concerned about depositors and are focused on trying to meet their needs," Yellen said.

Doubletalk, r246? The first sentence refers to bailing out owners, which Yellen says should not happen. The second refers to the people who held their money in the actual bank, who Yellen says should be the focus of any help.

Are you really that dim?

Castigation, criticism and limp insults.

But no analysis of the topic at hand.

Two NYC IB bros of my acquaintance say this is a tempest in a teapot, a 1 or 2 on a scale of 10.

The amount of money poured into tech startups that sell nothing is staggering. What’s the product? A space for consciousness of equity and queer racial inspiration and uplifting empowerment of headspace and functional dignity and giving back to people at risk of systemic oppression and marginalization. It’s ETHICAL INVESTING.

Why do they need to keep silicon in a bank?

It’s a good thing Silicon Valley is situated in an actual Valley, otherwise it would be Silicone Mountains Bank,

Standard operating procedure. One set of standards for wealth another for for the poors. Wash rinse repeat. A scheme is not a vision. Try investing your money in someone that looses it then appealing to the feds for a bailout. See what happens.

[quote]The amount of money poured into tech startups that sell nothing is staggering. What’s the product?

This woman is trying to make the case for a bailout to save her start-up that basically, for $600/month, creates you a bespoke "smart" to-do list. The future of the American economy!

Also love the angle that she's salt of the earth. "My husband works in manufacturing," i.e. he is a steel executive. And they both are ex-McKinsey.

Privatize profits, socialize losses indeed!

R253, she is part of the problem. She tried to withdraw her funds from the bank on Thursday!

I am not seeing a big bank wanting to step in. There is little incentive to take over a failed bank.

Wow this Startup is indeed idiotic

Bing AI does all of this for free

r249 Are they hot?

“It’s a personal assistant for people who are too cheap or poor for a personal assistant, but too lazy or stupid to use Google, but tech-savvy enough to be able to use our website.”

The “woke” program nonsense is just the way Bay Area wealthy people display their narcississm. It has nothing to do with why SVB failed

One major difference between SVB collapse and the financial crisis 2008 is that SVB shareholders and stockholders are not being bailed out--they have been bailed IN (they are the ones taking the losses.)

'This is very different from the Financial Crisis when bank shareholders, and preferred holders, and bondholders were made whole, including Warren Buffett. That stank to high heaven. To my knowledge, no one is calling for bailing out investors.'

(Wolf Richter)

Oh, shit. Tech friends are not amused by Michaelides mockery. They truly have their heads up their asses. It's such an echo chamber of arrogance.

Yeah, I agree ^ this is different and even though I am a Democrat I believe a bailout would be a good thing here.

Woke is a fetish for limp magats who wish to remain asleep. Woke is an insult to the dead above the shoulders.

This organizations outreach to unrepresented groups is unrelated to the insolvency of the bank.

Nah, no bailout. Uninsured depositors will not lose everything and maybe they will finally learn something.

No. You are not a Democrat. You're not even an American citizen. No. Bailout.

I wish Dark Brandon would rise up and say “Bail out SVB? We’re going to wait and see what SCOTUS does with student loan forgiveness first. We wouldn’t want to create a scenario where working class folks can’t get some help with crushing debt but we’re bailing out the wealthy for their piss-poor financial decision.”

And sit back and watch the hysteria ensue.

This will end up like the banks that went under in 2008. The govt. will strongarm the bigger banks to absorb any banks that might happen to have problems. The can will be kicked down the road till something else explodes in another decade or so.

This is different- these are entrepreneurial, risk taking, new businesses that succeed or fail in the market. It's the nature of the tech sector.

The world economy doesn't rest on Silicon Valley's shoulders by any means.

This is what happens when you let 90% of the country’s wealth trickle up to foreign billionaires who bought American citizenship specifically to take advantage of our dirty, crooked system and legally steal. One billionaire can crash the economy.

You don’t see Peter Thiel crashing Germany’s economy. You don’t see him destroying media companies in Germany. Only in the US.

Thiel is no doubt pissed that Biden wants to increase his taxes, so he’s rattling the whole country as revenge.

R172 you may think that…but you’d be wrong. She’s experienced and admired in every corner of the economics world. Decades-long Berkeley professor, Regional fed president, White House advisor…she’s smart enough to help her husband get his Nobel Prize. And, now, she’s doing her job.

Let me just divert your attention for a moment from the collapse of SVB Financial and what it might and might not mean for the financial system or the startup bubble or whatever, to another troubling aspect of SVB Financial that shows that no one has learned anything since the Financial Crisis, least of all the credit rating agencies.

So you know what is coming: The solid investment-grade rating on a company – SVB Financial – that then collapsed with its investment-grade rating, taking investors down with it.

On Wednesday March 8, Moody’s still had an A3 rating on SVB Financial, owner of the now defunct Silicon Valley Bank, as it was already collapsing for all to see. Four notches into investment grade – a very respectable rating!

In the evening of that day, after SVB disclosed a $1.8 billion loss on the sale of bonds, a planned capital raise, and a slew of liquidity measures, Moody’s downgraded it by just one itty-bitty notch, to Baa1, still three notches into investment grade.

Then on March 10, after Silicon Valley Bank was shut down and put into receivership, Moody’s downgraded SVB by 13 notches in one fell-swoop, all the way across junk territory, to its lowest rating, to C, which is Moody’s rating for default. And it said that it will withdraw the rating.

That’s how worthless these credit ratings are if you rely on them for your bond holdings. But they’re good for your amusement, apparently.

R271 This is from the financial blog Wolf Street.

This right here filled in a lot of infuriating details

That’s how financial ratings work, duh. Should Moody’s have downgraded them on Monday. Just to see what might happen? Ratings are always subject to evaluation and change…we all know how it works.

It's like with any interest group. If there is a danger, threat or humiliating scandal, they close rank. No matter which side they are on (Dem or Republican). When that group and its interests are at stake, they stick with each other.

It works with so many groups, like the police force. But when it comes to minorities, divide & conquer fucked that "closing rank" and "circle the wagons" for the most part.

[quote] Ratings are always subject to evaluation and change…we all know how it works.—You sound overwrought

First of all retard, they aren't my words. Secondly, you sound like a retard. Of course ratings are subject to evaluation and change--before the fucking bank crashes, not after.

Ratings are supposed to evaluate whether something is investment grade or not. If Moody's et. al. had actually BEEN EVALUATING SVB it could have warned investors it was junk that needed high yields well before the bank collapsed.

'Companies obviously go ratings-shopping when they need to raise funds by issuing bonds, because a lower credit rating will cause the bond to have a higher coupon interest, and higher yield, meaning more interest expense for the company. And so there is huge pressure on analysts to come up with a high rating, or the other side of the rating agency will lose this business to a rating agency that will rate those bonds higher. We truly have learned nothing, not even bondholders, who should simply ignore those ratings and do their own homework.' Wolf Richter

You ALL voted for it, now enjoy it.

Voted for what?

Re: Moodys, this happened so fast. I don't know if you can argue about the accuracy of the rating reflecting the catastrophe.

Stock market futures for Monday don't seem too bad.

It will be an interesting 24 hours. All the major analysts are saying that some sort of resolution needs to happen before Monday morning. What people aren't seeing is that there are a lot of small business that are not only in tech that will be effected. You have moms who run small business on ETSY, you have the Wineries who use SVB to fund independent brands, and then all the people who are on the pay roll for these businesses. It's not the businesses that are failing, but the bank, which could wipe some these off the map.

The media is also part of the problem. While volatile, First Republic is relatively safe, but you have the media pushing the panic button, causing people to rush out and withdraw their money putting a relatively safe institution into a more precarious place. "The sky is falling, the sky is falling". Maybe it is, maybe it isn't.

Hopefully this doesn't spill over into something bigger and this is just mountains out of relative molehills. This is not a good time to be in the Bay Area. Unemployment numbers are high, the real estate market is not great, and it's expensive.

Janet is shoving her dirty pillows in hopes she is right. My prediction is that another bank will fail by the end of March.

Good thread here:

Will we see any *real* accountability?

The heart of the problem:

For the DL financial experts, why can't the FDIC insure amounts more the 250K? Is that per account? If I have 4 accounts at SVB for $250K each would I be covered or is it 250K per bank total? Also, if you can insure a house up to the sky's the limit, say 35M, why can't they insure your money is safe. I'm really making a point to not be so dumb. I

^ R286 they can, the accounts just have to qualify. The limit and qualifications are supposed to make sure depositors are fiscally responsible and not recreating the high-stakes high-losses conditions that led to the Great Depression.

The FDIC site has a lot of info.

Treasury Secretary Yellen made a statement. You can be sure she didn't make it without talking it over with the White House.

WaPo has three unnamed sources saying we might cover all deposits.

Why is momtrepreneur presenting as a small business owner after a small out of digging revealed her business received 10 MILLLION dollars in seed money?

Forbes says mismanagement for a year... 5 hours for a buyer. I hope they announce before the Oscars.

Good point:

R233, the Democrats did NOT - repeat, DID NOT - have "two years of total control."

Have you been asleep since 2021 or are you just a dumbass Trumptard spewing Fox talking points?

No need to respond - we already know the answer.

R233, the Democrats did NOT - repeat, DID NOT - have "two years of total control."

Have you been asleep since 2021 or are you just a dumbass Trumptard spewing Fox talking points?

No need to respond - we already know the answer.

Didn’t trump just deregulate a lot of stuff in 2018/2019?

This is what you get.

Increase in food borne illness, chemical pollution and collapsed backs. This is why regulation is a necessity.

^Joe Biden, furiously deflecting

*banks

We banks have bought what we needed to buy

Maga doesn't do facts. If magats did facts, they would not be maga to begin with.

R276 we both know that the rating agencies don’t review credits in real time 24/7. They were watching, and they acted on actual information. Please stop with making an argument that the rating agencies somehow bear a certain responsibility for this situation. That’s not the case, and your indignation is either faked or mistaken.

[quote]WaPo has three unnamed sources saying we might cover all deposits.

Absolute bullshit. The FDIC covers $250,000. Everyone knows this. If you want to deposit more than $250,000 in a single bank or account, you are a fucking idiot who shouldn't be in business to begin with.

And, honestly, I don't give a fucking shit about the very, very small percentage of people who have over $250,000 in a bank account. Let's worry about the 90% of the rest of the country who are drowning in debt and using all of their paychecks now to pay for necessities. Those are who the Democrats used to stand for and they better start doing it again. They need to become the party of FDR again.

And, what happened to completely separating regular banks from investment banks after 2008? Was that another regulation removed by the Trump administration? Maybe I should just start my own bank. Take everyone's money. Go gambling. Lose it all. And then the government will bail me out completely. Then, I can just do it again!

Bank of America and Wells Fargo are super woke as far as their PR yet they didn’t collapse.

I think this have much more to do with the fake conservatives that make up the GOP dogma. These people are not conservative but that use that phrase, and other hypocritical schemes to beat “liberals” with. But they are far from conservatives. The are mooches. I’m seeing this break thru to republicans voters.

This fake conservativism is being called out like never before. I think it will be a theme of 2024. How everything that republicans say is fake and they this is the real republicans.

They go crying to government for every little thing. They are not conservative they are fake and the deplorables know it.

You can’t insure your home up to any limit that you like. You are insane—that’s not how property insurance works.

And the FDIC can’t unilaterally change the coverage amount for protected accounts—that’s not how deposit insurance works.

R300, I think that poster's point was what is the point of having ratings if they can't see a problem this big coming? What value does a rating have if anything rated good can go belly up a day later? Maybe they need to refine their rating system to show a being watched or trouble ahead category that would precede a full on downgrade, or at least something clearer than whatever they currently have in place.

I hope this doesn’t distract from all the price gouging going on. Where is that headline? Seems like a corporate media cover up.

People can only handle one economic story at a time.

Price gouging is effecting millions of people and this is just a buch of rich idiots whom will soon be parted from their illgotten riches. Big whoop. They are still rich. Swimming in so much money they can’t even manage it properly.

this is all Peter Thiel who started this whole thing on purpose. He caused the run. It’s not complicated. It has his stink all over it. He will get away scot free.

They already have that—it is part of the rating system. Ratings do not act like earthquake detectors, but more like the Richter scale. That’s understood by the market—it is baked in.

A rating reflects the likelihood of a payment default/failure to pay, on the rated securities or the rated issuer. That’s it.

It's hilarious to see all the VC libertarians who wouldn't stop screeching about the unfairness of student debt relief now kicking and screaming for a bailout for themselves now that the machinations of the free market didn't work in their favor.

R306 in the shot-term, at least, he has hurt many of the companies he/his friends invest with. For example, whoever is a main investor in Roku or Etsy may be pissed at their buddy PETER.

R289, doubtful. There's more likely going to be a buyout. And it may have to involve some splitting up of SVB. I think it will take time though because after the JPMorgan/BearStearns experience, no one is going to rush into that deal without some serious due diligence.

Unless, of course, they are confident that the regulators will give them lots of passes. Which all comes down to Election 2024.

The solution is at 2:20

A good, quick snapshot…TBC

that's great, r313

It's quite odd to argue, as some have in this thread, that businesses deserve to go under if they keep more than $250k in a single account. There aren't enough FDIC-insured banks in the country for companies of a certain size to have enough $250k accounts to service their needs.

R315, they should buy short term government securities.

I'd never even heard of SVB before all of this. Is it even national or localized to the rich tech investors in their little bubble? I don't buy the prediction that if this fails everyone in the country will no longer trust their banks with all their money (well, money of $250,000 at least!). This whole thing just stinks of a government and economy so out of touch with the reality of the vast, vast majority of this country that it's almost laughable.

That the Democrats like Swalwell are going on about protecting the money of the millionaires for the good of the little people makes me fucking sick. We know what the Repugs are. The Democrats should be better than those fucking hypocrites. Fuck Swalwell and his ilk. Porter is where the Democrats need to be on this.

^”companies of a certain size,” which includes family-owned businesses, do not typically go to a “speciality bank” who’s depositor base is 95% similar. Most small businesses use local (community) banks, or large national banks, where risk is managed by diversity.

The lack of diversity helped fire the flame here (and isn’t that ironic)

*whose

[quote]they should buy short term government securities.

You still need a clearinghouse for obligations like payroll.

[quote]Most small businesses use local (community) banks, or large national banks, where risk is managed by diversity.

It's true that SVB is a clusterfuck for all kinds of unusual reasons. None of it changes what's happening or the risk of additional bank runs when people who don't understand the reasoning behind any of this get spooked.

R315: It's not that they "deserve" to go under, but that's the risk they took when they decided to bank with SVB.

SVB had in their loan terms that companies, to get the loans, had to keep their cash deposited with SVB as well. It seemed to work out well for the Silicon Valley ecosystem until, last week, it didn't. Most banks don't place such restraints on companies to qualify for their loans. The companies took the risk to bank with SVB to get the loan terms they wanted. Capitalism is risk/reward, right?

For fucks sake R315, there is a whole industry around helping ginormous business manage large accounts. The people who ran SVB said no thanks to that. And I guarantee their investors and depositors had access to well paid accountants who would have told them to steer clear if they were willing to listen.

No buyer. Futures opening. Omg.

There's even an industry about helping the "little people" (I mean compared to multi-mullion/billion dollar businesses) mange large accounts.

[quote]The companies took the risk to bank with SVB to get the loan terms they wanted

SVB clients weren't taking out loans with the bank; they were already flush with cash. That's part of what created this unusual situation.

Bullshit, R315. Are you under the assumption that Amazon has its money invested in simple savings accounts earning them .2% interest? They invest their vast sums of money in risky places knowing that they'll either get great returns or, if it fails, the goverment (we the taxpayers who gave them all their money to start) will bail them out. Meanwhile, families can't afford fucking eggs!

The rich can go fuck themselves. The governments job should be looking out for us so we don't become victims of the rich or pay the price when the rich don't get their way and their gambles fail. Not protecting the fucking rich at the expense of the rest of us because they are "too big to fail". No company should be allowed to exist that is too big to fail. We need to break up all the big, monoplistic companies NOW. That would, of course, include the media ones because otherwise, the vast majority of people won't even know there's a problem to begin with.

R321 Thank you!

"We parked all our cash in one institution, eschewing some of the most basic principles of enterprise risk management, in order to secure not-even-that-much-better loan terms from the most levered-up idiots on the planet. Save us!"

Boo-fucking-hoo.

[quote]Are you under the assumption that Amazon has its money invested in simple savings accounts earning them .2% interest?

No. But it's evident from some of these replies that a lot of the angriest contributors to this thread are the most confused about banking.

Better article for No Buyer.

Who keeps trying to make victims out of VULTURE capitalists

It’s absurd.

futures don't look awful

R330: "Who keeps trying to make victims out of VULTURE capitalists"

Answer: venture capitalists.

[quote]Yellen said she’s been hearing from depositors all weekend, many of whom are “small businesses” and employ thousands of people.

At least they are putting "small businesses" in quotes like it should be in that ridiculous sentence. Small businesses do not employ thousands of people.

Use a Credit Union.

R320: "You still need a clearinghouse for obligations like payroll."

Agreed, and that's where - as part of responsible enterprise risk management - companies need to have a range of banks that they do business with. But if you have tens of millions in deposit accounts that you want to protect in excess of your working capital needs, then you need to invest in short term government securities. They are not as liquid as a deposit account, of course. But that's the risk of having tens of millions sitting in a bank account.

Honestly, it's amazing how every fucking time we go through this round of "capitalism, until it fails, then socialism" there's always a chorus of bootlickers ready to do the bidding of these rich incompetent assholes by insisting "No, this time it's different!"

We got an email over the weekend that our company did not/does not use SVB.

Mark Cuban on the tragedy: 'The tragedy of SVB is that its not the wealthy taking the hit. It's the thousands of companies who borrowed from SVB and were required to keep their cash in SVB. Those entrepreneurs and their employees and vendors are feeling the pain. And they are who the Fed should protect'.

OMG they were FORCED to take out a loan and FORCED to keep it in SVB! Is that even legal??? Save them! Only a fellow venture capitalist understands the pain!

Can Mark write a check?

I thought this narrative of events was wildly exaggerated, but now they are admitting it. It really was a "did you hear there's a run on the bank?!"-style panic a la "It's a Wonderful Life."

R339. Cuban has only ten million in SVB so I would say yes.

That was an interesting read, R340. My first hope that it was satire, but no, he really scooped up SVB shares even as he frantically yanked his money from the bank:

[quote]1:30 PM: SVB is a solid bank. I know their CEO, Greg Becker. Great guy. I figure this is a temporary issue caused mainly by people panicking. They'll recover. I buy shares of SVB at what I consider significantly low prices.

^ Amazing, right? And we're supposed to see these people as brilliant businessmen whose riches will trickle down to the rest of us dopes if we just let them be great.

At least he had the decency to say this, although I'm skeptical he's not privately lobbying for this:

But I was looking for yield!

This can’t be so because I was told that everyone in the tech industry is a “genius” and a “visionary” and us laymen couldn’t possibly understand.

Right?

What happened to that narrative?

The bank has enough assets to cover at least depositors. $25B Fed Loan so they can access their money.

No taxpayer involvement, per Asia Bloomberg TV. Signature Bank has closed, but that was expected.

A $25B fed loan is taxpayer involvement.

But good on the FDIC for moving fast.

Now, claw back all Becker's comp.

No, the Gov will confiscate bonds, etc worth it or more.

They already have confiscated it. That's the "takeover" part of the FDIC's takeover.

A little more, less sympathetic detail, from the pity me! story at R253. As someone notes in the thread, her story includes the little detail of depositing a "6-figure check from a customer" into her SVB account last week.

These people are just shameless.

They are shameless

[quote] - drive a used Honda Odessey

R253 / R350 This person is former McKinsey and she can't correctly spell the word ODYSSEY? Does she not see the word spelled on the nameplate every time she's in her damn car? Is she not even smart enough to let spell-check correct the spelling for her??

Oh, dear. 🙄🤦🏻‍♂️🤷🏻‍♂️

The Mom of four from Ohio is enraging.

Just came across the wire.

Feds will backstop/cover all depositors regardless of amount.

The mom of four states she hustled to get what she has. Poor people don't work hard.

Signature Bank just went under

When white women are in distress, in comes the cavalry.

I know people that work at Signature bank, are they no longer employed?

Dunno yet R358 news is just breaking

Fed stepped in, depositors are safe.

Miserable scum.Greedy pigs.

'As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.' How is that possible?

There is a fund created by fees to banks that will be used to back up bith banks.

Regulators close Signature Bank, second shuttered by feds after SVB disaster

It’s going down

Uh oh 😟

[quote]'As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.' How is that possible?

Besides the bank assessment already mentioned, SVB has significant assets, albeit ones that were unwisely invested in longer-term instruments.

We are in serious trouble

𝐀𝐧𝐝 𝐚 𝐌𝐚𝐧𝐡𝐚𝐭𝐭𝐚𝐧 𝐁𝐚𝐧𝐤 𝐜𝐥𝐨𝐬𝐞𝐬

The federal government Sunday announced the failure of a second bank with deep ties to the tech industry — as regulators rushed to try to stem the losses caused by last week’s collapse of Silicon Valley Bank.

Manhattan-based Signature Bank — a key financial institution for the cryptocurrency industry — was shut down over a “similar systemic risk exception,” according to a joint statement from the heads of the US Treasury, Federal Reserve and Federal Deposit Insurance Corp.

I don't understand finance and banking, but how is all of this stuff different than the shit the banks pulled in 2009? Wasn't subprime whatever fake things that made a lot of rich people richer until the gov't had to step in? Isn't crypto just as fake?

I know this is common practice for banks, but it should be illegal for banks to impose requirements that a company keep nearly all its money with a bank, just because the bank made a loan to the company.

This time is different. Back in 2008 basic bitches earning thirty grand a year were dumb enough to take out six figure loans to purchase houses they could not afford. Those basic bitches deserved to lose their house and sleep in their cars. This time, it's moms of four who work hard and hustle and bootstrap to start their own business and they need you, a taxpayer to make them whole.

The rich can just consider their lost interest as their accrued taxation share.

Most banks don't do that R371 it's actually illegal. Seems the onion is peeling in regards to SVB. I'm a banker and yes we'd like to be a client's main bank but we understand they have a fiduciary duty to diversify. They should always have a back up.

R374, I used to write loan agreements all the time, and covenants always included maintaining a disproportionate share of a borrower's deposits with the lender/bank.

That is still a common practice. Search loan docs on edgar, and you'll see it everywhere.

Crash coming ?

If banks are holding federal securities, there won't be a crash. The federal government can redeem them now without saying it's a bailout. No fuss, no muss.

Now if banks are holding crap assets, then we'll see.

[quote] Crash coming ?

We've had an ongoing slow motion crash underway for over two years and the end is nowhere in sight

President Biden Job Approval - Economy 37.5 - 58.3

You have cited realclearpolitics and now will come the tone police to scold you for it.

Magats are worthless

[quote] Signature Bank just went under

Bad contractor?

first Republic is down 60% right now premarket.

It was trading at $22 a few minutes ago.

Well that was quick. And, amazingly, without any handwringing about what a sudden influx of cash from the feds will do to inflation or the economy. Without any clucking about getting too depending on handouts and government rewarding bad decisions. Nothing about "better" use of those billions. When *some* people need money, it's just there.

A “taxpayer-funded bailout” by any other name …

r384 At least he's right that students loan forgiveness. It steals money from the poor and give it to the rich. Just like this bailout does.

^Biden's student loan forgiveness plan is income-capped, and the amount of forgiveness is capped.

This bailout is not. A cap was never even given lip service even though THE LAW limits FDIC insurance coverage,

r387 Biden's student loan forgiveness isn't future income capped. Once they graduate, the people getting the student loan forgiveness are going to be a lot wealthier than the people paying the student loan forgiveness. So it's just a way for dems to steal money from the poor and give it to their wealthy donor base.

Similar situation with this bank bailout, the money goes to rich Silicon Valley tech companies using fees on normal people's small personal bank accounts.

"Once they graduate, the people getting the student loan forgiveness are going to be a lot wealthier than the people paying the student loan forgiveness."

False. Please stop since you're just lifting this from wingnut talking points.

[quote]The current landscape income-driven repayment includes four plans: Income Contingent Repayment (ICR), Income Based Repayment (IBR), Pay As You Earn (PAYE), and Revised Pay As You Earn (REPAYE). Each plan has its own unique rules, eligibility criteria, and payment formulas, which has made navigating the IDR system challenging for many borrowers. But all of the plans work similarly: borrowers pay an amount tied to their income; payments are recalculating annually; and any remaining balance can be forgiven after either 20 or 25 years, depending on the plan.

[quote]Rather than create a fifth plan, which was the Education Department’s original proposal, the new plan will instead overhaul the REPAYE plan, essentially replacing the existing version of that plan with a new one. Created in 2016, the REPAYE plan in its current form provides borrowers with payments tied to 10 percent of their discretionary income (the amount of their Adjusted Gross Income above 150 percent of the federal poverty limit for their family size). Borrowers can receive student loan forgiveness under REPAYE after 20 years if they only have undergraduate loans, or 25 years if they have any graduate school loans.

Fuck all the grifters from the banks to student borrowers.

FUCK them, tax them all to filth and give their money to the working class.

And then raze their offices and “universities” to the ground, and sow that ground with salt so that nothing grows back.

r389 What you posted has nothing to do with what you're saying. Biden's plan gives money immediately to anyone with loans who made less than $125,000 last year, even if you are starting a job at McKinsey next year. The group who pays for student loan forgiveness are going to be poorer and the group that gets student loan forgiveness are going to be richer. It's stealing money from the poor to give to the rich.

Socialize the student loans and privatize their salaries!

R391 it's obvious you're trying to derail this discussion with bullshit, but I'm still going to point out the obvious lies. There is "immediate" strictly-capped relief based on income. That benefit is small. The bulk of the plan targets long term middle to lower income earners. So it does not at all steal from the poor to benefit the rich.

Funny how nobody complains that mortgage income or child tax credits aren't future income capped. Because if there were ever even a hint of doing so, the same people bitching about SLF with lies would be screaming that we shouldn't discourage those people from earning more money. But a plan comes along that's deliberately targeted to lower earners, and suddenly the fake populists are all worried about "Oh but what if someone who gets a couple thousand dollars in relief BECOMES rich?" Fucking nonsense.

Fuck the students

A significant chunk of student loan debt is held by working class people, but do go on.

[quote] "Oh but what if someone who gets a couple thousand dollars in relief BECOMES rich?"

It's not what if, we know for a fact that it is going to happen. If you have a college degree, you are going to earn a lot more than people who don't. It's a tax on the poor to give money to the rich.

^ And if Biden's plan were across the board (like the SVB bailout), that would be a legitimate concern. But because it's narrowly targeted, it's going to benefit low earners far more significantly than high or potential high earners.

r397 Low earners are the people who didn't go to college and now have to pay for other people's degrees. I'm not in favor of stealing money from the poor and giving it to the rich.

First Republic still down 65% with an hour to go before market's open.

Hold on...another wild rocky ride again on Wall Street.

PacWest down 42% premarket.

R398 is just repeating its fact-free bullshit and I'm done.

Meanwhile, we have yet another example of a rich white man who is only allowed to fail up.

[quote]Joseph Gentile, listed on the SVB website as the bank's chief administrative officer, previously served as the chief financial officer (CFO) at Lehman Brothers, a global finance firm that became one of the biggest banks to declare bankruptcy during the 2008 financial crisis due to its involvement in the subprime mortgage crisis. Gentile left Lehman in 2007, before the collapse.

The "low earners don't have student debt" argument is a strange one to me. Nearly everyone I know who works low-paying jobs like retail has at least one failed college or tech school stint behind them. A lot of blue collar work requires training and some sort of certification. Usually it's Republicans who forget that, not Democrats, because they snobbishly assume blue collar means unskilled.

One thing I love about social media is that there is no gatekeeping as in traditional media to keep people from calling these assholes out directly.

Didn't the Carpenters write a song about this bank?

Western Alliance down 65% premarket.

r404 this is why South African despots purchased the platform, to put the breaks on free speech

Western Alliance down 80% and dropping.

We just need someone to find the Emperor's beautiful clothes, and the tech sector can save itself!

8 different bank stocks were just halted after catastrophic losses this morning.

And yet most tech stocks are up as if they won't be affected by this monsoon. I doubt it. Crazy times.

[quote]8 different bank stocks were just halted after catastrophic losses this morning.

It's up to 30, including Charles Schwab.

The FDIC has made it official. They will bail out ALL depositors at SVB and Signature bank. They will NOT bail out shareholders and unsecured bond holders, iow, investors will be 'bailed in'.

The government is falling over itself to explain how this will not involve taxpayer money. I can print a summary of this explanation if anyone wants it.

The Fed and FDIC priority is to contain the panic while insisting it is not systemic. These banks were mismanaged and all executives have been dismissed. It remains to be seen whether there will be indictments, don't hold your breath.

[quote]They will NOT bail out shareholders

Will individuals be able to write off the capital loss on their taxes?

I am very bitter about this having experienced the great depression of 2008. People lost their equity, 401ks and careers and were told we didn't work hard enough and deserved to live in our cars. These freaks get government welfare because they are wealth generators and bootstrappers?

Speaking of criminals...maybe I missed it but I didn't see this particular quote from one of the above articles mentioned yet.

[quote]One person who got out ahead of it is Greg Becker, chief executive of SVB. According to Market Watch, Becker cashed out of stock and options for a $2.27 million net gain in the weeks before Friday's collapse, public filings show.

Occupy Wall Street? They were right all along.

These CEOs and investors, knowing about this beforehand and cashed out, should be made to give the money back. I know this will never happen. They should be punished big time....in prison.

They'll be charged eventually. But they made have had automatic triggers to sell- when the price went down.

I want to hear Democrats specifically speak about the concept of privatized profits and socialized losses.

Some of the recent stock sales from SVB execs were routine and scheduled in advance of the bank's collapse. It should still be clawed back, in my opinion.

They should kill themselves like shamed executives in Japan. Sick of rich people.

[quote]They'll be charged eventually. But they made have had automatic triggers to sell- when the price went down.

The financial industry has strict requirements for executives and large sales of their stock. They don't want to create a panic. But I bet these executives knew months ago where this was headed and scheduled the sales accordingly.

How were they invested in long-term, low interest government securities knowing that the interest rate was more than likely going to rise? And why did they not have a Chief Risk Officer in place?

They can't commit suicide. They are bootstrappers. Hustlers. Wealth generators.

We need them to take our tax dollars to support their lifestyle choices.

Two executives at doomed Silicon Valley Bank had previously worked at a pair of notoriously troubled financial giants — the now-shuttered Lehman Brothers and the scandal-scarred Deutsche Bank.

The employment records of SVB executives Joseph Gentile and Kim Olson raised eyebrows on social media after the tech lender’s rapid meltdown prompted fears of a systemic economic crisis. The feds were forced to bail out SVB on Sunday to restore public confidence in the banking sector.

Gentile serves as chief administrative officer of SVB Securities, a standalone investment bank wholly owned by parent company SVB Financial. But prior to taking that role in 2007, Gentile was the chief financial officer for Lehman Brothers’ Global Investment Bank.

^thats plain stupid. 10s of thousands of people worked at either of those banks…what bank wouldn’t have employees with previous banking experience. A (big) red herring.

CNBC is full of old man fund managers who are absolutely defending SVB. It's absurd. Blaming interest rates.

The market is up, pleased that rates will go down because of this.

But it's clear this bank was mismanaged and the VC model- getting cash without producing a marketable product- is a fucking joke. Tech has been a house of cards for years.

Yeah, it is totally not their fault their resumes includes extended stints at banks that went bellyup. Their expertise includes bank failures and they deserve millions dollar salaries, bonuses and corporate apartments.

You're a financial wizard, educated and accomplished, a hustler and a job creator.

So why are you demanding a government handout?

With the interest rates so low, how can anyone think there's no where to go, but up? They were low for a while, but it was temporary. Reserves should have been set aside for preparation for the increases. I know, already discussed...but how shitty and greedy these people are. It's all their own fault. You really can't blame the interest rates, which does play a part in this. A large reserve of money should have been put aside for that.

What upsets me about today's news of a SVB bailout (and yes, I know it's being covered by the FDIC which is sitting on $trillions of insurance payments so this isn't coming on the backs of taxpayers, nevertheless...) is the missed opportunity for Democrats to leverage this with regard to student loan forgiveness. Biden should have simply stepped up to the podium and said "in tandem with the Fed and the FDIC, we're putting a plan together to save SVB but tied to an hinging on what the SCOTUS does with student loan forgiveness. If they strike my student loan plan down, the plan to save SVB goes bye-bye with it. If we can't afford to forgive a small portion of student loan debt on a sliding scale tied to income, we can't afford to save billionaires in Silicon Valley from their mistakes, either."

*not think

428 my mother worked at a failed bank. So did I. What’s your point—nada.

[quote]And why did they not have a Chief Risk Officer in place?

Have you seen the movie “Margin Call”?

Mr. Stanley Tucci plays the head of risk management at a Goldman-Sachs type investment firm.

He’s laid off at the beginning of the movie and hilarity ensues.

Of course this movie takes place in fall 2008…

[quote]…the VC model- getting cash without producing a marketable product- is a fucking joke. Tech has been a house of cards for years.

There is a semi-obscure movie called “August” starting Josh Hartnett, DL fave Adam Scott, and David Bowie (!!!) that memorably illustrates this.

It’s a 2009 movie.

The more things change…

What is your point, genius?

Your mom worked as a receptionist and you as a custodian. In a bank.

And?

Ok, so now I have several movies to watch! (God I love it here!!!)

Talking to tech/startup/VC friends- you would fucking CRY over how little genuine financial knowledge they have. I think programming blows people away, and they just handover cash..

So I was reading all this SVB coverage yesterday and said “I need a break! I’m going to finally watch ‘Carnivale’ after hearing people rave about it for years.”

Lo and behold, one of the first scenes is two carnies listening to a radio address (Herbert Hoover, maybe?) about what banks do with your money when you deposit it.

They turned off the radio in disgust.

[quote] Gentile serves as chief administrative officer of SVB Securities, a standalone investment bank wholly owned by parent company SVB Financial. But prior to taking that role in 2007, Gentile was the chief financial officer for Lehman Brothers’ Global Investment Bank.

So he killed two banks. DO NOT HIRE HIM!!

[quote] Some of the recent stock sales from SVB execs were routine and scheduled in advance of the bank's collapse.

Well, of course they were scheduled in advance of the collapse.

[quote] I want to hear Democrats specifically speak about the concept of privatized profits and socialized losses.

It's tough when it's a Dem president socializing the losses.

[quote] Talking to tech/startup/VC friends- you would fucking CRY over how little genuine financial knowledge they have. I think programming blows people away, and they just handover cash..

This. I would add that bankers and investors are the same way. One very astute finance guy says there's no explanation for all this lunacy except that free money turns people's brains to mush.

[quote] The Mom of four from Ohio is enraging.

So basically you can come up with any crazy idea to suck money out of the rich, and you'll get millions in funding to level up.

[quote] Once they graduate, the people getting the student loan forgiveness are going to be a lot wealthier than the people paying the student loan forgiveness.

That's a boat load of bunk. You think all those English and Sociology majors are going to be swimming in money?

Dammit! The market was holding today...but still dropped.

So much mis-information out there. Joseph Gentile was NEVER the CFO of Lehman Brothers. He served a 6 month term as a divisional CFO of the Fixed Income Division and he left in Jan 2007. That was 2 levels below the CFO of the overall firm which declared bankruptcy in Sept 2008. I worked there and personally know this, but here's a source if you need a "link!!!".

I am concerned by the amount of the misinformation I read on Twitter and hear about this fiasco, It’s no wonder people are running to withdraw their $177.00 from their accounts.

Here's another source regarding who the CFO was of Lehman Brothers (it was NOT ever Joe Gentile). Erin Callan was appointed CFO in 2007. Before that, Chris O'Meara held the role since 2004.

Yet all over the media, it's being stated that Gentile was the Lehman CFO leading up to the 2008 bankruptcy. There appears to be NO fact checking, just people re-spewing mis-information over and over.

Hint: Just because you read it on Twitter or Reddit, that doesn't mean it's true.

[quote] He served a 6 month term as a divisional CFO of the Fixed Income Division and he left in Jan 2007. That was 2 levels below the CFO of the overall firm which declared bankruptcy in Sept 2008

He's still associated with two banking disasters

It wasn't just twitter and reddit, R448, it was a Newsweek article.

Granted, Newsweek has gone to shit but you'd think they could still get a basic fact like that correct.

If the Republicans hadn’t rolled back the tougher Dodd-Frank banking rules that were put in place to deal with the 2008 crisis these bank failures could not have happened. Live and learn, people. Banking and other industries dislike regulation but that’s what keeps us safe.

R450, Newsweek is just a name now. I think if you pay you can get an article printed under the Newsweek banner.

[quote]He's still associated with two banking disasters

No, he isn't unless you're using a uselessly broad definition of "associated with." He had nothing to do with the way Lehman Brothers mis-managed its balance sheet. He was 2 levels down in the organization.

r451 Democrats have been in charge for the last 3 years. It was literally Barney Frank's bank that crashed. But don't let facts and logic get in the way of a good lie.

^The guy they named Dodd-Frank after.

It's already over the tech bros get their bailout and the hysteria causes a demand for cash so inflation drops who knew that this would be a good thing?

One important point: you cannot BORROW venture capital. That's not how it works, and that's what SVB did.

You have to HAVE the capital.

Another day another silicon scam. When will the people throw off these tech chains? Will it be in my lifetime?

Our single goal should be to turn Paulo alto back into farmland. It can be done.

I was disappointed to see Barney Frank defending a bank doing exactly what Dodd Frank should have stopped.

Reps see "MAGAt" and claim it. Dems are the true deplorables, because they pretend to pass laws to protect the rest of us. Then they FUCK us over and join the boards of the banks.

How much did you get from big finance, Senator Schumer?

If it were up to republicans then we would be back to shoveling the banks all the money like Bush did.

Correct; but it's the Dems, so we're shoveling the money to Silicon Valley lol

Barney Frank sez "the rules are too tough!"

Elizabeth Warren was sidelined and humiliated by her party because she knew what had to be done to stop this madness.

We can't have that.

R454, Dems had a RAZOR-THIN majority and really, no majority at all to get any significant legislation passed, thanks to the likes of DINOs Manchin and Sinema. And it's been a little over two years, not three.

But do keep deep-throating Trump and the GOP. You know you love it.

Does this mean an end to endless investment money for stupid apps?

No, because the federal government bailed out Silicon Valley.

So more money for stupid apps will continue.

It’s Palo Alto, but we get your point. While they’re at it, clawback some of those billions in Stanford’s endowment, and those fancy new buildings…it is all blood $.

Claw back all of it. All that money paid to the execs and for what?

[quote] And why did they not have a Chief Risk Officer in place?

Priorities. At lest they made certain they had an A rating for its Environmental, Social and Governance policies as it increased diversity and invested in sustainability startups

r465 Yes everything that the happens during the Biden administration is Trump's fault. Solid logic. Thank you for your brilliant contribution.

What is the point of electing Dems if they don't do anything - not even stuff they can do like changing regs without Congress. And bad shit happens and they just scream "Trump".

Like, don't fucking run if you can't do the job, assholes.

I hate Trump and Biden and Reps and Dems. The people rotate through and nothing changes. And Barney Frank lobbies to gut the law he passed.

Like it or not, they are all in the pockets of their donors and lobbyists. That's really who they cater to..

We are in trouble!!

So does anyone think they'll be people jumping off buildings like in the crash of '29?

they are all in the pockets of their donors and lobbyists

Statement of Political Activity Corporate Political Activity Principles SVB’s corporate responsibility includes participating in the political and public policy process, specifically in areas that impact the innovation economy and the banking industry, as well as our clients, shareholders, employees, communities, and business. It is important that we engage with legislators and policymakers, where appropriate, or support initiatives to advocate constructively for the long term interests of SVB and our key constituents. We focus our activities in the United States and in international office locations. We are a highly regulated financial institution and are subject to extensive laws and regulations relating to political contributions. Accordingly, we conduct any political activity in compliance with applicable laws and regulations and as further described in this Statement of Political Activity.

Moreover, SVB’s political activities, including political contributions, are overseen and periodically reviewed, on at least an annual basis, with the Governance Committee of the Board of Directors. The Board of Directors and the Governance Committee recognize the importance of appropriate governance and risk management of our corporate political activities, and reviews our activities for alignment with SVB’s business, strategy, reputation and mission, as well as compliance with applicable laws and regulations.

Political contributions are made primarily through a federal political action committee, sponsored by SVB --- the Silicon Valley Bank Political Action Committee (previously named SVB Financial Group Political Action Committee) (“SVB PAC”).

PAC Contribution Data, 2019-2020 · Contributions from this PAC to federal candidates (list recipients) 60.87% to Democrats, 39.13% to Republicans,

[quote] No, he isn't unless you're using a uselessly broad definition of "associated with." He had nothing to do with the way Lehman Brothers mis-managed its balance sheet. He was 2 levels down in the organization.

Two levels down suddenly has nothing to do with mis-management? Obviously when SVB was looking for a leader, it thought someone 2 levels down at Lehman would be qualified.

Banks fail all the time. In fact, it was extremely unusual that no banks failed in 2021 and 2022.

16 failed under Trump, 8 of which occurred before the pandemic.

[quote] Democrats have been in charge for the last 3 years

And the bank had terrible management during those same three years.

My God, every failure is not the Biden's fault no matter how the GOP twists it.

I got a bunion during Biden's Presidency!! I blame him!!

[quote] What is the point of electing Dems if they don't do anything - not even stuff they can do like changing regs without Congress. And bad shit happens and they just scream "Trump".

No, the GOP starts by screaming Biden. Dems point out that ruled changed during Trump's administration led directly to the problem. Righties complain that Dems just yell Trump.

lolz

Yes, it'll take months before we even know why this happened and 99.9% of people won't understand it even then. Any politician claiming they know who's fault this is and they have a law to fix it is lying to you.

Few laws can fix bad management

Why is this even a story--and yet here it is on the front page of Fox News: Silicon Valley Bank collapse: Here's who benefited from their executive, PAC donations

Because Fox News is not a real news organization. Stop linking to it.

[quote] Yes, it'll take months before we even know why this happened

Actually we know why this happened.

Since 2008 banks have had what you could call free money to spend in the form of near zero interest loans. Many of them spent like drunken sailors on leave, buying securities and bonds, their stocks soaring, but never planning, as everyone knows, that interest rates would rise again. That makes your securities and bonds less valuable. When SVB had to unload some of them before maturity to cover the slump in venture capital, they took a big hit. The fact that they were that desperate to raise cash spooked depositors like Peter Thiel, and the run on the bank began.

"The saga of Silicon Valley Bank is a striking example of how the surge in interest rates over the last year continues to upend once high-flying investors, financial institutions and companies that thrived in a world of low-interest rates.

"In other words, the Fed's steepest interest rate-hiking campaign since the early 1980s has changed everything. At their simplest, banks are in the business of borrowing short-term, cheap money — typically deposits — and then investing that money at higher rates, often by making longer-term loans or buying safe government bonds.

The bank's profits, in part, come from the difference between the interest it pays to borrow, and the interest it receives when it lends or invests.

SVB has been finding it harder to earn money over the last year because a key source of cheap deposits — the venture capital boom — has slowed down, just as losses in its investment portfolios have risen.

Many of SVB's depositors are venture capital-funded tech companies. When tech stocks and start-up valuations were soaring — in 2021 for instance — seemingly endless rounds of venture capital rolled in to prop up unprofitable tech startups. SVB's cheap deposit base swelled.

But the brutal sell-off in tech stocks, and downturn in startup valuation, has slowed the flow of venture capital. That means money-losing tech companies are rapidly burning through the cash that previously sat as deposits at SVB, with few fresh investor checks rolling in to help them out and puff up SVB's deposit base.

Simultaneously, rising rates have driven down the value of loans and bonds that the bank holds in its portfolio. What they're saying: "Given the pressure on their end markets, especially the elevated levels of client cash burn, [SVB] is seeing continued material outflows of client funds," wrote David J. Chiaverini, an analyst at Wedbush who covers the company.

"This may have raised liquidity and capital concerns for the bank," he went on, describing the reasoning behind the financial moves SVB announced this week. In banker speak, "liquidity concerns" translates roughly as "the bank needs to come up with some cash, quick."

To do that, SVB sold a $21 billion slug of government bonds. But because interest rates have risen so much — bond prices fall when rates rise — it sold them at a loss of $1.8 billion. To patch that hole in its finances, the bank also moved to raise money by selling new shares as part of a plan to come up with $2 billion in capital. The bank also slashed its profit outlook for the entire year.

r487 Yes, but we don't know what caused the regulators to miss this and or what regulation could have prevented it. There are currently tens of thousands of pages of US banking regulations and hundreds of thousands of people working in banking compliance.

[quote]Yes, but we don't know what caused the regulators to miss this and or what regulation could have prevented it.

Since the 2018 law regional banks like SVB are no longer under strict liquidity and capital requirements. Yes it was Trump but only the so-called 'progressive wing' of the democratic party opposed it.

The regulators 'missed this' because they weren't there. Even so, the climate of excessive risk taking and short term bank profits will ensure some banks will fail if they know they will be bailed out.

Even Barney Frank, who brought forth these tighter regulations in Dodd-Frank years back, thought these rules were too tough....as he is now a part of Signature Bank, another failed bank. How ironic is that. A good regulation is no good, now that it affects them directly.

The big tragedy is that 99% of the people work hard to maintain a system, a society, that (only) favors the other 1%.

Our whole life is being trapped in a scam to serve other's need for our own detriment. But hey! The things you do to keep up with the Kardashians, amirite?

[quote]Any politician claiming they know who's fault this is and they have a law to fix it is lying to you.

Bullshit. If the removal of a regulation (or regulations) allowed this to happen, then the implementation of a regulation (or regulations) can help fix it. Funny that politicians always know which regulations to remove to turn up the profits for their rich friends but then simply can't figure out which regulations to implement to fix the problem without six years and seven committees.

I'll listen to Porter and Warren on this.

[quote] Reps see "MAGAt" and claim it. Dems are the true deplorables, because they pretend to pass laws to protect the rest of us. Then they FUCK us over and join the boards of the banks.

More BS. The Reps might claim MAGAt to get their votes but don't believe it for a second. The Fox emails revealed that for all. And I assure you, there are far more Republicans ex-politicians populating those Bank Boards than Dem ex-politicians.

Basically, the bank invested poorly and bet that interest rates wouldn't rise. It lost much of its capital because if that mistake.

Yes, the previous regulations would have prevented it.

The bank failed because high net worth clients exited the bank after a group chat All banks are going to have exposure to interest rate risk and some are worse situated than others, but the deposit flight is what kills them

R495, English translation please

Exactly right, r149. You, however, aren't laundering huge sums of various and sundry types of criminal trafficking filthy lucre.

I don't understand what happened with Signature Bank. It's like Kathy Hochul thought, "Oh shit, someone is going to notice" and just shut the bank down on Saturday night. If SVB hadn't gone the way it did, do you think Signature would still be open?

R498 Signature Bank was a crypto-loving bank. Crypto imploded last year, no matter what you read about it now. Don't trust banks that invest heavily in one high risk area. Common sense.

Signature Bank was also one of the two main financial institutions that regularly work with Broadway producers.

R495 that was Peter Thiel that influenced everyone to pull out there cash.

Inflation numbers came in hot again today. So now the Fed is fucked, they have to decide between inflation not going away or more bank failures.

The decision isn't either/or, I don't know how you came to that conclusion from the interview. Bair said perhaps the Fed will pause before another rate hike. She didn't claim they BETTER pause or there will be bank failures. That would be an absurd position. In fact, Bair believes smaller banks are ok.

The Fed meets next week. NOBODY knows what they will do.

I still believe the Tech world is deeply obfuscating how much of a shitshow the Crypto disaster will be. And localized.

To those idiots above who shit on Moody’s, please read the “tick-tock” article… you were wrong.

And, dear DLers, don’t believe everything you’d see here or there. There’s plenty of non-troll idiots—in addition to the intention trolls.

“…roughly a week earlier, the rating agency Moody’s had called to tell Mr. Becker that his bank’s financial health was in jeopardy, and its bonds were in danger of being downgraded to junk. Realizing the bank needed to raise cash, Mr. Becker had been scrambling since then to fix things.”

R505, oh sweet Jesus. Isn't that worse? He shouldn't have Moody’s telling him that?!?

^ SVB already knew…they just didn’t know that Moody’s & many others already knew what SVB knew…they panicked..,their Twitter & Snapchat buddies in the Valley panicked. Peter Thiel mouthed-off, and here we are.

Mattresses are starting to look more and more attractive ...

KPMG should be fucked.

But if McKinsey can kill thousands of Americans on the back of "opioid advice", then KPMG can let 2 banks go bankrupt.

Fuck them all.

[quote] Here's who benefited from their executive, PAC donations

r485 I knew if they dug into it we'd find Maxine Waters

A statement from Maxine Waters:

"I came of age in the 60’s and 70’s, when all the rules about supporting Big Finance were different. That was the culture then.

I have since learned it’s not an excuse, in the office – or out of it. To anyone.

I realized some time ago that I needed to be a better person and my interactions with the people I work with in Big Finance have changed.

I appreciate the way I’ve behaved with colleagues in the past has caused a lot of pain, and I sincerely apologize for it.

Though I’m trying to do better, I know I have a long way to go. That is my commitment. My journey now will be to learn about myself and conquer my demons. Over the last year I’ve asked Lisa Bloom to tutor me and she’s put together a team of people. I’ve brought on therapists and I plan to take a leave of absence from my company and to deal with this issue head on. I so respect all consumers and regret what happened. I hope that my actions will speak louder than words and that one day we will all be able to earn their trust and sit down together with Lisa to learn more. Jay Z wrote in 4:44 “I’m not the man I thought I was and I better be that man for my children.” The same is true for me. I want a second chance in the community but I know I’ve got work to do to earn it. I have goals that are now priorities. Trust me, this isn’t an overnight process. I’ve been trying to do this for 10 years and this is a wake-up call. I cannot be more remorseful about the people I hurt and I plan to do right by all of them.

I am going to need a place to channel that anger so I’ve decided that I’m going to give the NRA my full attention. I hope Wayne LaPierre will enjoy his retirement party. I’m going to do it at the same place I had my Sweet 16. I’m making a movie about Trump, perhaps we can make it a joint funeral. One year ago, I began organizing a $5 million foundation to give scholarships to women directors at USC. While this might seem coincidental, it has been in the works for a year. It will be named after my mom and I won’t disappoint her."

R505 You're the idiot troll. Who the fuck cares about some phone call Moody's supposedly made?? The fact is they didn't lower their ratings significantly until it was too late. You know, the ratings that investors use???

On Wednesday March 8, Moody’s still had an A3 rating on SVB Financial, owner of the now defunct Silicon Valley Bank, as it was already collapsing for all to see. Four notches into investment grade – a very respectable rating!

Agreed, R512. If Moody's was making the call to SVB about the rating, it should have been immediately followed by a press release to the rest of the public.

If you don't like keeping investors equally informed, then don't be in the public ratings business.

Just one member of Silicon Valley Bank's board of directors had a career in investment banking, while the others were major Democratic donors, it has been revealed.

Tom King, 63, was appointed to the board in September after previously serving as the CEO of investment banking at Barclay's. He has had 35 years of experience in investment banking.

But he is the only one on the board with a career in the financial industry, while others are a former Obama administration employee, a prolific contributor to former House Speaker Nancy Pelosi and even a Hillary Clinton mega-donor who prayed at a Shinto shrine when Donald Trump won the 2016 presidential election.

The board is now being investigated by federal authorities after it failed to prevent the bank from going under while it was investing clients' money in risky low-interest government bonds and securities.

When the bank fell on Friday, it touted that its board included '1 black,' '1 LGBTQ+' member and '2 veterans.' It also noted that its board is 45 percent women.

But only one board member is under the age of 60 — while the oldest is 78.

And only King has experience in the financial investments industry.

The others were major donors to former House Speaker Nancy Pelosi, Clinton, Obama and President Joe Biden who also made contributions to the political action campaigns for Senate Majority Leader Chuck Schumer (D-NY) and Sen. Mark Warner (D-Va.), a longtime member of the powerful Senate Banking Committee.

Among those members were Phil Cox, who sits on the governing board for NextGen Cyber Talent, a nonprofit that 'provides a platform to increase diversity and inclusion in [the] cybersecurity sector,' according to his online profile.

And Kate Mitchell, who cofounded the National Venture Capitalist Association initiative, Venture Forward which 'focuses on advancing opportunities for women and underrepresented minorities in [the] venture ecosystem.'

Mary J Miller, a former under secretary of Domestic Finance for the US Department of Treasury who ran in the 2020 Baltimore mayoral race as a Democrat, also served on the board.

Kate Mitchell, 64, has served on the Silicon Valley Bank board since 2010.

During that time, she donated a whopping $50,000 to Hillary Clinton's 2016 presidential run, and cried when Trump eventually won.

She told CNBC at the time that she went to a Shinto shrine while on a trip to Kyoto that Thanksgiving to pray.

'I prayed for me and us to get beyond our grieving and shock, and to figure out how to engage and listen to what happened and come back together,' Mitchell said.

She had earlier celebrated how 97 percent of the tech industry's donations were going to Clinton's campaign, suggesting she would be 'friendlier' to their businesses.

'Ninety-seven percent support of Clinton is mind-blowing and really suggests that we're pounding the table.'

Professionally, Mitchell cofounded the National Venture Capitalist Association initiative, Venture Forward which 'focuses on advancing opportunities for women and underrepresented minorities in [the] venture ecosystem.'

She takes credit for co-authoring legislation on individual private offerings that made it easier for startups to get publicly traded, and was awarded in 2021 with the National Venture Capitalist Association American Spirit Award, for her 'service to community centered around equity and diversity.'

[quote]Two levels down suddenly has nothing to do with mis-management? Obviously when SVB was looking for a leader, it thought someone 2 levels down at Lehman would be qualified.

So much factually incorrect info still being thrown around! The media is saying the former Lehman CFO is also now involved in the failure of Silicon Valley Bank. He was never in either of the roles the media is indicating. He never even worked for SVB at all.

Joe Gentile was never an employee of SVB. He had nothing at all to do with SVB. He is an executive at SVB Securities, which is a separate business owned by the same parent company. SVB Securities is not part of the bank that became insolvent, and it continues to operate.

Joe Gentile was NEVER the CFO of Lehman Brothers. He was a divisional CFO for FID (Fixed Income Division) and left in early 2007. That role had nothing to do with developing the funding plan for Lehman Brothers, or managing the balance sheet or liquidity of the parent company. That is where the failure occurred and the parent company became insolvent and entered bankruptcy in Sept 2008. I worked for another division of Lehman at the time and we also had nothing to do with the parent company's failure but got pulled into the bankruptcy because of the way the firm was structured.

People love to get outraged about things.....but often the things they read in the media and get outraged over are not even true. This is a perfect example.

[quote] I worked for another division of Lehman at the time and we also had nothing to do with the parent company's failure but got pulled into the bankruptcy because of the way the firm was structured.

R515 Which division, Neuberger Berman?

Dems own this.

They fucking broke this.

The taxpayer is fixing this.

Dems are big finance now.

Fuck them.

[quote]The taxpayer is fixing this.

No. The FDIC insurance fund is covering customer deposits. The FDIC insurance fund is not taxpayer funds. It is funded by fees paid by member banks.

Also, the bank still has assets which will be sold. The proceeds will be used to pay back customer deposits. The shortfall (asset sale proceeds not enough to pay back all customer deposits) is what would get covered by the FDIC insurance fund.

"The FDIC insurance fund is not taxpayer funds. It is funded by fees paid by member banks."

Those fees are passed through by banks to the customer, i.e., the taxypayer.

Dipshit, get your head out of your ass.

Gavin looks out for himself and his rich buddies.

Gavin Newsom praised the Biden administration’s decision to intervene on behalf of Silicon Valley Bank’s clients after the bank was taken over by the FDIC on Friday amid a bank run. The White House “acted swiftly and decisively to protect the American economy and strengthen public confidence in our banking system,” Newsom said in a statement. What Newsom didn’t mention is that it also protected his own companies if they held over $250,000 in deposits.

CADE, Odette, and PlumpJack, three wineries owned by Newsom, are listed as clients of SVB on the bank’s website. Newsom also maintained personal accounts at SVB for years, according to a longtime former employee of Newsom’s who handled his finances, and who requested anonymity to avoid professional reprisal.

Newsom also didn’t mention his wife Jennifer Siebel’s professional ties to the bank. In 2021, Silicon Valley Bank gave $100,000 to the charity founded by Siebel, the California Partners Project, at the request of Newsom. John China, president of SVB Capital and responsible for SVB’s funds management, is himself a founding member of the California Partners Project’s board of directors.

Newsom, a multimillionaire who was a businessman before becoming a politician, has been dogged for years with ethics questions about his corporate holdings. When asked during his 2018 campaign for governor if he would sell his companies, Newsom reportedly replied, “These are my babies, my life, my family. I can’t do that. I can’t sell them.”

Instead, in December 2018, Newsom announced that he would establish the blind trust and give control of his trust to a family friend and attorney, Shyla Hendrickson. Under the arrangement, his sister, Hilary Newsom, retained her role as president of the governor’s PlumpJack Group, which includes hotels, wineries bars, restaurants, and liquor stores founded by Newsom.

The move echoed President Donald Trump’s decision in 2017 to move his companies into a blind trust that would be run by his sons. Ethics experts criticized the move as misleading, saying it was not meaningfully blind since Trump knew which companies he owned and put his sons in charge of his businesses in his stead. Walter Shaub, then the director of the U.S. Office of Government Ethics, slammed Trump’s arrangement as “not even halfway blind.”

Newsom also recently came under fire in the California press for allegedly abusing what are called behested payments: donations requested by politicians for any “legislative, governmental or charitable purpose.” Though California law stringently regulates campaign contributions and gifts to elected officials, 𝒕𝒉𝒆𝒓𝒆 𝒂𝒓𝒆 𝒏𝒐 𝒍𝒊𝒎𝒊𝒕𝒔 𝒐𝒏 𝒃𝒆𝒉𝒆𝒔𝒕𝒆𝒅 𝒑𝒂𝒚𝒎𝒆𝒏𝒕𝒔 𝒍𝒊𝒌𝒆 𝒕𝒉𝒆 $100,000 𝒅𝒐𝒏𝒂𝒕𝒊𝒐𝒏 𝒕𝒉𝒂𝒕 𝑵𝒆𝒘𝒔𝒐𝒎 𝒓𝒆𝒒𝒖𝒆𝒔𝒕𝒆𝒅 𝒇𝒓𝒐𝒎 𝑺𝑽𝑩 𝒇𝒐𝒓 𝒉𝒊𝒔 𝒘𝒊𝒇𝒆’𝒔 𝒄𝒉𝒂𝒓𝒊𝒕𝒚. Last year, Newsom reported at least $23.7 million in payments to such groups at his behest.

Well. There it is, the last nail for my naive hero worship.

Gavin, you are no RFK.

Politics is one of the most disgraceful professions...there are no saints, just very good self enriching liars. They may throw the American people a cookie or two, just to look good, which usually happens during an election year.

Yes, R522, I'll never understand the politician worship here. Certainly some politicians are less loathesome than others, but that's like saying certain cancers are less horrible than others.

It's true, but you can't convince me to adore stage I prostate cancer just because it's not stage IV colon cancer.

Great way to put it R523..

R505 I now see by your posts you've been defending Moody's and credit agencies for quite a while here on DL. Almost like someone who has something at stake in doing so.

Just to be clear, you do like clarity I hope, no post I can see was blaming Moody's for the crash, as you inaccurately state in one of your posts. Investors should not place all their faith in credit agencies, who are paid by the banks. At the same time, you don't seem to know the main function of credit agencies is to evaluate whether a bank can meet its obligations. Moody's had enough reason to doubt SVB's ability to do so when interest rates started rising. IT would have been APPRECIATED if their ratings had reflected that BEFORE the bank collapsed. If you're not a reader, watch 'The Big Short' maybe, or just stop posting.

"The question is how Moody's failed to spot the problems and risks facing Silicon Valley Bank. The Fed started raising interest rates several months ago. Moody's had to anticipate a situation such as the one in which Silicon Valley Bank found itself.

The rating agency declined to state why it continued to rate the bank to be among the companies able to meet their obligations, despite signals showing a sharp increase in credit risk.

"We won’t have further comment," a spokesperson said.

According to Reuters, Moody’s delivered alarming news to Silicon Valley bank parent in the middle of last week that it was preparing to downgrade the bank’s credit.

The problem is that Moody's didn't warn investors at the same time and waited until the bank failed to move. Moody's blindness to Silicon Valley Bank is reminiscent of the rating agencies' blindness to the exposure of financial institutions to subprime mortgages, that sparked the 2008 financial crisis."

Credit Suisse is (almost) dead to me. The roller coster continues.

Fascinating article RE CS.

I believe Dutchie has railed against CS for some time. And looks like he was right.

Roger Federer is in shambles right now.

DOW −496.45 (1.54%)

All the "protections and regulations"...though thanks to trump, the regulations have been turned back....plus, the rating agencies like Moody's, which investors rely to make investments....are pretty much worthless. Who to trust anymore...

[quote] Dems own this.

The bank leadership owns this. You want capitalism? Then the owners take responsibility for failure

[quote] Then the owners take responsibility for failure

Then Joe and Gavin bail them out

Why don't banks carry insurance to cover everything beyond the $250,000 FDIC insurance? That should be a requirement for all banks in order to get the FDIC coverage in the first place like having flood insurance being a requirement when living in a flood zone. (Of course, we have the government bail out those assholes who don't do that, too, so...) Maybe we just need to stop coddling stupid, selfish fucking assholes everywhere.

[quote] Then Joe and Gavin bail them out

So perhaps Congress should re-enact the previous regulations, right?

...Crickets from the GOP...

[quote] Why don't banks carry insurance to cover everything beyond the $250,000 FDIC insurance? That should be a requirement for all banks in order to get the FDIC coverage in the first place like having flood insurance being a requirement when living in a flood zone.

But that would require our political funders to spend more money!!

R533, they should by buying short term government securities; that is their insurance. But they want yield, and so we end with the 2d and 3d biggest bank failures in US history in a weekend

r533 Who would insure the insurance company?

Dow −677.61 (2.11%)

R537, how's AIG doing these days? 🤣

Oh, the credit ratings agencies finally noticed First Republic Bank is in a bit of a pickle.

"San Francisco-based First Republic – a bank catering to the billionaires and millionaires of the Free-Money startup scene – has been teetering near the cliff as said billionaires and millionaires have been yanking their money out amid big unrealized losses on its unhedged holdings of long-term bonds. Its shares have collapsed by 86% from peak consensual hallucination in November 2021. Its unsecured notes have plunged by 55% over the same period. And yet, it was rated a respectable confidence-inspiring-LOL “A-” by S&P Global Ratings, four notches into investment-grade, until this very morning.

And now, after investors already took huge losses, S&P Global downgraded First Republic by four notches to “BB+” – so into junk. But hilariously, this is still just one tiny notch into junk (my color-coded cheat sheet for corporate credit ratings by rating agency)." (Wolf Richter)

Hey, you know what...

This should end the glut of terrible streaming shows. No more cash to throw around...

[quote]"The FDIC insurance fund is not taxpayer funds. It is funded by fees paid by member banks." Those fees are passed through by banks to the customer, i.e., the taxypayer. Dipshit, get your head out of your ass.

You can't actually be this stupid. People are portraying the situation as a taxpayer bailout of the bank, meaning general tax revenue being used to cover the bank's losses. That is not what's happening. The bank paid fees into an insurance fund, and that is what is covering potential losses after the bank's assets are sold. That does not equate to the taxpayer directly covering this. And you know it but are just being an asshat.

[quote]The bank paid fees into an insurance fund, and that is what is covering potential losses after the bank's assets are sold. That does not equate to the taxpayer directly covering this.

The taxpayer gets indirectly involved if they allow the stockholders to write their losses off on their taxes. Capital loss can be leveraged to lower a tax bill. $3,000 per person.

Also, the tax payer pays the bank fees because the banks will pass those these through to the customer/taxpayer

R542 is a simp. Can't see beyond the first step in anything to what the actual longer term consequences will be. That sounds just like an ignorant MAGAt to me. These are the same assholes who don't want to pay taxes but then complain about all the potholes! Willingly blind.

We should know by the end of the week if First Republic is a make or break. If it's a break, it could be big trouble. This whole whiplash is spurred on by the media, especially by my beloved Daily Mail (which does always crack the story first, tbf). Regardless of what happens, the news over the last week spells trouble. I know we are not officially in a recession, but it sure has felt that way for a while and eventually it's going to come crashing down...or not. I just want to know either way so I can panic or relax.

I love Maxine Waters statement upthread. It is the same exact language someone who said something racist or off color 40 years ago would use when on the cancellation chopping block. Maxine, take this teachable moment, do better, and be a little more forgiving. If you were just going with the times in the 70's, I'm sure many others were as well.

R545 is a basic troll who twists reality to fit her narrative and have things to be outraged about. MAGAT.

R545 = gaslighting MAGAT

[quote]Also, the tax payer pays the bank fees because the banks will pass those these through to the customer/taxpayer

The discussion was about whether there was a taxpayer bailout of SVB, meaning government tax revenue being used to bail out the bank. There isn't. Sorry that reality doesn't work for you. The discussion was NOT about what fees bank customers voluntarily pay to the bank as part of their business relationship with the bank.

that is a taxpayer bailout, dipshit, but sorry notsorry it ruins your narrative

No, it isn't R550. You are just trolling or are a clueless idiot or both. A taxpayer bailout would be if the government used tax revenue to bail out the bank. That isn't happening. The banks, as part of their operating cost structure, pay insurance fees to the FDIC for insurance coverage. Calling that a taxpayer bailout because the bank earns fees by conducting business with customers who happen to be taxpayers demonstrates low intellect and lack of understanding of basic real life on your part. You are creating a false narrative to fit your outrage. FAIL.

Yes, it is. It's a bailout funded by bank fees that are passed through to us, the taxypayer.

I could draw you a diagram, but it would be a very simple diagram.

No, it's an insurance claim against an insurance policy with the FDIC. I can draw you a picture if you need it. Bailout, as used to refer to banks, means the government spending general tax revenue to save a bank. That is not happening.

Bailout is taxpayers coming out of pocket. And we will. So it's a bailout.

R553, you moron, we're not talking about the FDIC part, we're talking about the amounts above that not legally covered by the fund.

You all realize the bank has assets that will be sold, right? The only claim on the FDIC insurance fund will be losses wherein the amounts due to depositors exceeds the proceeds of the asset sales. This is not a situation where the bank has worthless assets on their balance sheet. They have assets that declined in value due to interest rate risk that went against their favor, yes. But this is not a situation where the government will even need to do a bailout. If their asset base consisted of worthless mortgage backed securities where the underlying assets were worthless, then yes there would be a bailout vs no bailout decision. That is not the situation. There will be some level of claim on the FDIC insurance fund.

So many "taxpayer bailout!!!" trolls (or maybe just 1) on this thread who are clueless about how the industry works or what happens when the FDIC takes over a bank. Do some learning, basic bitches like R555.

1. The Fed gives the money to the FDIC as needed.

2. The FDIC makes all deposits available on Monday.

3. The FDIC then sells the assets of the banks, which takes some time.

4. The difference between the cost of bailouts of the depositors and the proceeds from the asset sales is the actual amount the FDIC lost.

5. The FDIC charges other banks a “special assessment” to cover those losses, “as required by law.”

6. And it may then pay the Fed back with those funds it collected from other banks?

5. The FDIC charges other banks a “special assessment” to cover those losses, “as required by law.”

5.1 The banks passes the "special assessment" through to taxpayer/customers in the form of higher fees.

Fixed it for you.

R559, it's strange that this poster keeps forgetting that part of the equation, isn't it?

I don't get it, r560. His posts are otherwise pretty good. Either he's in finance (which is deflecting like fuck right now) or it's just the usual defensive politics on DL.

I'm sure there are some taxpayers who don't use banks. Stop being idiots.

Woke Silicon Valley Bank donated over $73 MILLION to Black Lives Matter-related social justice groups before it collapsed - while failed Signature Bank gave $850,000

People paying bank fees and “taxpayers” are two different groups.

They do not necessarily overlap.

Who is the retarded MAGAT arguing they are one and the same?

R562, of course there are some taxpayers who don't use banks. But it's certain that the vast majority of taxpayers do use banks. And those taxpayers will bear the burden of paying the fees that the federal government imposes on banks.

And that, friend, is a bailout.

𝑻𝒉𝒖𝒓𝒔𝒅𝒂𝒚, 𝑮𝒐𝒍𝒅𝒎𝒂𝒏 𝑺𝒂𝒄𝒉𝒔 𝒊𝒏𝒄𝒓𝒆𝒂𝒔𝒆𝒅 𝒊𝒕𝒔 𝒑𝒓𝒐𝒃𝒂𝒃𝒊𝒍𝒊𝒕𝒚 𝒐𝒇 𝒕𝒉𝒆 𝑼𝑺 𝒆𝒄𝒐𝒏𝒐𝒎𝒚 𝒆𝒏𝒕𝒆𝒓𝒊𝒏𝒈 𝒂 𝒓𝒆𝒄𝒆𝒔𝒔𝒊𝒐𝒏 𝒊𝒏 𝒕𝒉𝒆 𝒏𝒆𝒙𝒕 12 𝒎𝒐𝒏𝒕𝒉𝒔 𝒃𝒚 10 𝒑𝒆𝒓𝒄𝒆𝒏𝒕𝒂𝒈𝒆 𝒑𝒐𝒊𝒏𝒕𝒔 𝒕𝒐 35 𝒑𝒆𝒓𝒄𝒆𝒏𝒕, 𝒄𝒊𝒕𝒊𝒏𝒈 𝒕𝒉𝒆 𝒔𝒕𝒓𝒆𝒔𝒔 𝒐𝒏 𝒔𝒎𝒂𝒍𝒍 𝒃𝒂𝒏𝒌𝒔.

Secretary of the Treasury and Secretary of Transportation make a good team

WTF First Republic is down another 30% this morning? I thought this bank run stuff was over.

[quote]of course there are some taxpayers who don't use banks. But it's certain that the vast majority of taxpayers do use banks. And those taxpayers will bear the burden of paying the fees that the federal government imposes on banks. And that, friend, is a bailout.

When your house gets destroyed by a tornado or flood, I assume you will acknowledge that the proceeds of your insurance claim are a "bailout". You received far more than you paid in premiums, and that money came from all the other insurance policy holders who paid their premiums and didn't make any claims. Those other homeowners gave you a bailout, R565. You didn't make an insurance claim, you got a bailout!

-eyeroll-

^^ Specifically, you got a TAXPAYER bailout, because other homeowners who pay insurance premiums are taxpayers!

Same applies to any claim on your auto insurance policy. Someone stole your car and your insurance company paid you for your loss? You got a taxpayer bailout! All the other auto policy holders are taxpayers and your insurance claim was partially covered by the premiums you paid, but most was covered by premiums all those other taxpayers made!

R568/R570, your analogy doesn't work. The equivalent action would be your house or car being destroyed and the insurance company making all your neighbors give you $100 a month for the rest of their lives.

No R571 that analogy makes no sense.

R572, SVB bank was destroyed (your house was destroyed) and now everyone, even those with no connection to that bank in any way (your neighbors), will have to now pay higher fees (the $100). It's so exact it's almost not an analogy as much as just another example of the exact same thing.

It is not, R573. That is a failed analogy.

Poor R573 sounds like he needs a taxpayer bailout. Sucks to be poor.

So, you're just stupid with nothing to actually say, R574/R575. Got it.

It wasn't a "bailout" bailout.

Sharon Stone: I ‘lost half my money’ in Silicon Valley Bank.

Well, I'm glad the future increased fees I'll be charged for banking and investing will help Sharon Stone get all her millions back.

I am feeling bitter too r579.

Cheer up people!

In the wake of the collapse of Silicon Valley Bank and subsequent government bailout of its depositors, the Federal Reserve took steps Friday to assure venture capitalists that they’re very smart and important. “You are just the absolute most intelligent and creative bunch of guys and gals—and cute as hell, to boot!” said Federal Reserve chairman Jerome Powell, adding that the U.S. central bank couldn’t stop itself from issuing federal guarantees for all uninsured deposits given all the cool and sexy people who would benefit. “We decided to make depositors whole because we at the Fed were worried about the spread of tantrums and frowns. We can’t have that! Our nation’s venture capitalists are just adorable, and we would never, ever, ever, ever, ever want them to have a sad day! Don’t worry, engineering a bank run out of herd mentality and a basic disregard for how financial institutions operate could happen to anyone, and we’re so sorry that you guys had to deal with it, because you’re super awesome and clever, and nothing should stand in your way. Wow, your ideas are so great! Where do you even come up with this stuff? We are just, like, blown away over here at the Fed by how epic and amazeballs you all are. Come back for more money anytime!” Powell also reportedly responded to questions as to whether the Federal Reserve would issue similar guarantees to other regional banks by assuring customers at Midwestern credit unions that they’re super dumb and lame.

I have a bank account , twenty years and I will close it to open an account in a credit union

First Republic Bank stock plunges even after $30 billion rescue package

I don’t understand how Sharon Stone has millions. She was in only one hit movie

Was she a heavy investor in the bank? Otherwise she didn’t lose any money.

[quote]So, you're just stupid with nothing to actually say, [R574]/[R575]. Got it.

No, that would be you R576. You are just illogical and dramatic and therefore disagree with common sense and facts.

R584 she got huge paydays for a lot of flops back in the day. She also gets a shitton for these appearances. And then of course there’s the expensive jewelry she doesn’t return.

Once again this Volodarsky guy gives away the game:

R517, blame your bf Peter Thiel instead

‘The trouble with First Republic is real’: Experts say S.F. bank teeters on brink of collapse