Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

FDIC Takes over Silicon Valley Bank

fdic.gov

Post reply on HN
Print view View original

561–570 of 1001 posts

Re: FDIC Takes over Silicon Valley Bank

#561

Post by andrewcamel »

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.

Yep... I bet this is about to pull forward a lot of startup death. Gun now to VC heads to save things. Forcing decisions they were hoping they wouldn't have to make for at least another 6-12 months.

Re: FDIC Takes over Silicon Valley Bank

#562

Post by pishpash »

BlandDuck wrote: post #389
somenameforme wrote: post #367

An explainer post [1] connected to that Tweet is something I found extremely informative (assuming it's accurate): "- In 2021 SVB saw a mass influx in deposits, which jumped from $61.76bn at the end of 2019 to $189.20bn at the end of 2021. - As deposits grew, SVB could not grow their loan book fast enough to generate the yield they wanted to see on this capital. As a result, they purchased a large amount (over $80bn!…

"This is not a liquidity issue as long as SVB maintains their deposits, since these securities will pay out more than they cost eventually." But that's exactly the problem. With higher interest rates, those deposits will be looking for a higher deposit rate. With their assets tied up in low-paying long-term bonds, SVB will not be able to pay that higher rate. It would only work out "eventually", if the depositors wou…

All liquidity issues are solvency issues when marked to market.

Re: FDIC Takes over Silicon Valley Bank

#563

Post by dang »

somenameforme wrote: post #367

An explainer post [1] connected to that Tweet is something I found extremely informative (assuming it's accurate): "- In 2021 SVB saw a mass influx in deposits, which jumped from $61.76bn at the end of 2019 to $189.20bn at the end of 2021. - As deposits grew, SVB could not grow their loan book fast enough to generate the yield they wanted to see on this capital. As a result, they purchased a large amount (over $80bn!…

(We detached this subthread from https://news.ycombinator.com/item?id=35097120, which contains "that tweet".)

Re: FDIC Takes over Silicon Valley Bank

#564

Post by stoicking »

kuczmama wrote: post #361

What I don't understand is why do banks work this way? Imagine you were designing the bank from scratch having no knowledge of the current banking system. How would you do it? The most obvious thing would be if a customer deposits money, you would hold 100% of the money 1 to 1 exactly how they deposited it. Then the bank could make money by providing services to their customers. If I had to bet, most people who have…

I think what you described is a vault. A bank is where I go when I need money for a car or a house. A vault is where I put my money to be 100% safe.

Re: FDIC Takes over Silicon Valley Bank

#565

Post by e-clinton »

UnpossibleJim wrote: post #53
chollida1 wrote: post #30

some note i've been taking > To protect insured depositors, the FDIC created a new entity called the Deposit Insurance National Bank of Santa Clara, or DINB. DINB will maintain Silicon Valley Bank’s normal business hours, with banking activities resuming no later than Monday, including online banking and other services, the FDIC said. Customers with accounts in excess of $250,000 are being told to contact FDIC direcl…

So, first off, I am not very literate when it comes to the comings and goings of banking procedures, so forgive me if this is a dumb question. Would an incident like this make other banks shore up their defenses about this sort of thing happening to them, or will more banks fall due to market conditions in general?

Both would be my guess. I’m expecting more smaller banks to fall.

Re: FDIC Takes over Silicon Valley Bank

#567

Post by dboreham »

0x457 wrote: post #432
morpheuskafka wrote: post #218

Earlier quoted context omitted.

> Hundreds of startups will become illiquid as a result of SVB's collapse, I know SVB was like a "high tech bank" that partnered with things like Stripe Atlas, but is there any reason that startups were using it for their regular operating funds? Other than the name, was there something that actually made this bank particularly suitable for them?

Try to walk to BofA as an entity that didn't exist yesterday and see how that goes.

Not BofA, but I've done this several times at Wells Fargo and never had a problem.

Re: FDIC Takes over Silicon Valley Bank

#568

Post by tpmx »

Edmond wrote: post #238

Please reboot Silly-con Valley...I mean the show. With everything that has happened with crypto and the current mayhem I think two solid additional seasons can be made.

Bring back the whole cast including TJ Miller (sober or not, he brings it) ... but not Middleditch.

https://www.usatoday.com/story/entertainment/celebrities/202...

Re: FDIC Takes over Silicon Valley Bank

#569

Post by highwaylights »

hef19898 wrote: post #172
johnbellone wrote: post #91

Earlier quoted context omitted.

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

There are three ways to succeed in this business: Be first, be smarter or cheat. And I don't cheat. Margin Call is such a timeless, great movie!

Do you care to know why I earn the big bucks?

I’m here for one reason alone. To guess what the music might do a week, a month, a year from now. And standing here tonight I’m afraid that I. Don’t. Hear. A. Thing.

Just… silence.

Re: FDIC Takes over Silicon Valley Bank

#570

Post by elzbardico »

So SVB suddenly had too much money and too few people to loan this money to, so they had to buy a dangerous asset that could have exactly this problem with a raise on interest rates, where every sane person in 2021 would know that all that stimulus money would lead to inflation down the road and consequently a tax hike from the FED.

"The cheapness of capital gives facilities to speculation, just in the same way as the cheapness of beef and of beer gives facilities to gluttony and drunkenness" 

  MARX, Karl
  Capital Vol. III Part V - Division of Profit into Interest and Profit of 
  Enterprise. Interest-Bearing Capital
  Chapter 25. Credit and Fictitious Capital*
Post reply on HN