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FDIC Takes over Silicon Valley Bank

fdic.gov

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Re: FDIC Takes over Silicon Valley Bank

#131

Post by marcosdumay »

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

That amount of confidence on the fact that the music would never stop is... I dunno, I don't get any good adjectives. I can't understand it.

It's not even the case that they did it for the returns, because the returns were negative. Is it a regulation thing that forced banks to overinvest in long-term bounds?

Re: FDIC Takes over Silicon Valley Bank

#134

Post by tedivm »

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.

I'm copy/pasting a commend I made elsewhere, but I'm not sure this is the case.

> I worked at a startup that took in over $100m in investment, and I was curious so I asked the cofounder how they protected that. According to him the money was divided up into chunks smaller than $249k, pushed off to a custom entity made just for the purpose, and then invested in bonds or CDs on a rotating basis.

Basically if you have a ton of money having it sit in a bank account is one of the worst things you could do with it, so most people who bring in a lot mostly just keep operational expenses in their bank account while leaving the rest of the money in other financial instruments.

Re: FDIC Takes over Silicon Valley Bank

#135

Post by [deleted] »

adrianmonk wrote: post #99
khazhoux wrote: post #75

Earlier quoted context omitted.

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.

[deleted]

Re: FDIC Takes over Silicon Valley Bank

#136

Post by tpmx »

A Swedish white collar pension fund (Alecta) was the 4th largest owner of SVB. It's been big news over here today. I think I have some pension savings there.

Their investment in SVB represented 0.6-0.7% of their total fund. I assume that the FDIC takeover means it's a total loss.

Was this a manufactured bank run?

https://www.bloomberg.com/news/articles/2023-03-10/why-svb-w...

Re: FDIC Takes over Silicon Valley Bank

#137

Post by bagacrap »

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 accounts were under 250k. An account of $251k isn't part of the 3% figure, but is almost totally insured.

Re: FDIC Takes over Silicon Valley Bank

#138

Post by abofh »

reducesuffering wrote: post #113

Does this mean $SIVB stock holders who had $265 shares two days ago now have worthless shares? JFC no wonder bank stocks are priced so low compared to earnings... You're just hoping the dividends pay out enough before the inevitable implosion.

Well, they were 38$ this morning, but yeah, probably going to approach zero

Re: FDIC Takes over Silicon Valley Bank

#139

Post by idlewords »

banku_brougham wrote: post #107
testfoobar wrote: post #43

What a debacle. Some gallows humor from twitter: "Imagine raising $100m for your AI enabled dog washing app - and your bank sets it on fire before you can". Original: https://twitter.com/88888sAccount/status/1634028258500169731...

Its so funny until you realize your seed-round investment in a friends company used SVB. Gonna be quite a show, this.

That makes it even funnier, though. At least to the rest of us.
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