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FDIC Takes over Silicon Valley Bank

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Re: FDIC Takes over Silicon Valley Bank

#91

Post by johnbellone »

woeirua wrote: post #52

LMAO. Can't even believe how many people were confidently asserting that nothing was wrong yesterday. If you had more than $250k in SVB yesterday you probably just took a huge haircut. Hundreds of startups will become illiquid as a result of SVB's collapse, and there will be major layoffs here in the next 90 days as founders realize that they lost their funds and cannot raise in the current VC environment.

The same people that were saying that yesterday were removing their deposits. They just wanted to be there first.

Re: FDIC Takes over Silicon Valley Bank

#92

Post by swift532 »

albatross13 wrote: post #29
FormerBandmate wrote: post #8

Turns out Twitter making bank failure a meme didn’t really help anything at all. It’ll be very interesting to see what happens to uninsured depositors

Probably a dumb question, but what determines if a deposit is insured or not at an FDIC insured bank?

Not a dumb question at all. AFAIK it is the amount, in the USA it's $250K. Other countries have similar situations, most of the EU is 100K €.

Re: FDIC Takes over Silicon Valley Bank

#93

Post by mangosteenjuice »

woeirua wrote: post #52

LMAO. Can't even believe how many people were confidently asserting that nothing was wrong yesterday. If you had more than $250k in SVB yesterday you probably just took a huge haircut. Hundreds of startups will become illiquid as a result of SVB's collapse, and there will be major layoffs here in the next 90 days as founders realize that they lost their funds and cannot raise in the current VC environment.

A good lesson for everyone who forgot the last cycle.

Slowly, then all at once.

Re: FDIC Takes over Silicon Valley Bank

#94

Post by JumpCrisscross »

briandear wrote: post #77
woeirua wrote: post #52

LMAO. Can't even believe how many people were confidently asserting that nothing was wrong yesterday. If you had more than $250k in SVB yesterday you probably just took a huge haircut. Hundreds of startups will become illiquid as a result of SVB's collapse, and there will be major layoffs here in the next 90 days as founders realize that they lost their funds and cannot raise in the current VC environment.

I bet a lot of VCs had significant money in that bank as well. Even if companies could raise money, there wouldn't be as money available.

> a lot of VCs had significant money in that bank

Everyone I know pulled yesterday.

Re: FDIC Takes over Silicon Valley Bank

#95

Post by mhuffman »

briandear wrote: post #61
ejstronge wrote: post #48

Earlier quoted context omitted.

>Keep in mind 93% of SVB's assest were not FDIC insured. >> Silicon Valley Bank Had About $209.0B in Assets I'm not an expert, but aren't deposits in a bank liabilities ? Assets are things like treasury bills and loans held by the bank.

When someone opens a bank account and makes a cash deposit, he/she surrenders the legal title to the cash, and it becomes an asset of the bank.

For a bank deposits are liabilities and loans are assets.

edit: Judging by a quick downvote trigger-finger, there seems to be some folks having trouble believing this; check this out from the source: https://www.federalreserve.gov/releases/h8/current/ ... look at the category names of where deposits and loans are listed.

Re: FDIC Takes over Silicon Valley Bank

#96

Post by synu »

jb1991 wrote: post #54
NordSteve wrote: post #5

Only 3% of deposits in the bank are FDIC insured; other depositors will need to wait for the receivership process to run to get access to (what remains) of their deposits. edit: replace "bankruptcy" with "receivership" as the latter is usually a faster process than the former.

> Only 3% of deposits in the bank are FDIC insured why is that?!

Because the insurance is for $250k and most depositors had much more than that.

Re: FDIC Takes over Silicon Valley Bank

#98

Post by discodave »

itg wrote: post #57

So any startup which had more than $250k in SVB only has $250k left now I'm assuming? Hopefully this doesn't have a bad domino effect.

Probably just a haircut. How much nobody knows yet, but according to the FDIC release, 3 months ago they actually had $209B of assets, so it's not a FTX-like 'oops we accidentally your money' scenario.

Re: FDIC Takes over Silicon Valley Bank

#99

Post by adrianmonk »

khazhoux wrote: post #75
idlewords wrote: post #38

Now we just need an "incredible journey" blog post from SVB spinning this acquisition as a great win for both customers and investors.

Or a cute 404 page when you login to your account: "Oops, looks like Santa misplaced his bag with all your money! Don't worry, his elves are busy looking for it all over the North Pole."

Kinda seems like it should be a 503 Money Unavailable.

Re: FDIC Takes over Silicon Valley Bank

#100

Post by ncallaway »

tarr11 wrote: post #16
rvz wrote: post #4

Oh dear. It guess this is how the VC pyramid scheme collapses. $151BN uninsured deposits in the bank. [0] Now all those unprofitable startups will be falling like dominoes as now the money is tied up in the bank with withdrawals disabled. [0] https://twitter.com/FedGuy12/status/1634038788468113408

Does this mean that SVB customers are going to lose deposits over the FDIC limit (250k?)

SVB's assets will be divided up and given back to creditors (including depositors). So remaining depositors likely will get something back eventually, but we don't know how much yet (10%? 50%? 85%). There will also likely be a delay in getting those funds back as the process plays out, which is probably more dangerous to many companies than the haircut (assuming the hair-cut isn't too severe).
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