A Bank of One's Own
nayafia.substack.com
A Bank of One's Own
1–10 of 130 posts
Re: A Bank of One's Own
#2An interesting take on SVB
Re: A Bank of One's Own
#3> But the only way they were able to participate in that world, and serve as a role model for others, was by quietly borrowing from a bank that understood what it meant to be a young venture capitalist with carry, but not enough savings.
Using borrowed money for venture capital seems very risky and not something that a bank should be celebrated for enabling.
Re: A Bank of One's Own
#4> Silicon Valley Bank is not a bank for rich people.
Dataset needed.
Re: A Bank of One's Own
#5I thought this was a great post. I've commented elsewhere that I'd be pissed at the moral hazard of unsecured depositors getting a federal bailout (though not if the feds just assist in finding a buyer or do as much as possible to ensure depositors can access their funds quickly), but at the same time I'm saddened by so much of the gleeful tribalism I see online (but not too saddened - many of the "dancing on your grave" posts stand out primarily for their stupidity).
SVB was uniquely positioned to help the startup ecosystem in a way that larger banks were not. I hope something similar replaces them (albeit with better risk controls for their asset portfolio).
Re: A Bank of One's Own
#6> But the only way they were able to participate in that world, and serve as a role model for others, was by quietly borrowing from a bank that understood what it meant to be a young venture capitalist with carry, but not enough savings. Using borrowed money for venture capital seems very risky and not something that a bank should be celebrated for enabling.
Wasn't mixing "normal" banking with investment banking banned in the US after 2007? Or this is something else that doesn't fall into that category?
Re: A Bank of One's Own
#7[deleted]
Re: A Bank of One's Own
#8I thought this was a great post. I've commented elsewhere that I'd be pissed at the moral hazard of unsecured depositors getting a federal bailout (though not if the feds just assist in finding a buyer or do as much as possible to ensure depositors can access their funds quickly), but at the same time I'm saddened by so much of the gleeful tribalism I see online (but not too saddened - many of the "dancing on your gr…
It seems to me like too much of the current situation has jurisdictional gaming. We complain that banks no longer want to take the risk of their traditional role in small business loans and have a lot of economic distortion from that.
Silicon Valley apparently had better access to a bank that took risks and SVB seems to be the bank of over half of tech and public health startups..
Other jurisdictions should feel a bit cheated if their regulators didn't help their small business get the most out financing and FDIC bailouts.. Internationally, other countries have to question why they aren't giving some kind of handouts to gain more of the startup scene for occasional crises.
Really a fine mess.
Re: A Bank of One's Own
#9> I'm perplexed, then, to see so many people gleefully celebrate the collapse of an institution that helped level the playing field for people from all backgrounds.
It isn't about being gleeful. This bank took massive risks, which were enabled by Trump changing the laws (and they supported), which then allowed them to take even more risky bets (aka: level the playing field).
https://www.motherjones.com/politics/2023/03/silicon-valley-...
Now we get to see the fallout from all of that, which was even predicted by someone who was paying attention...
https://seekingalpha.com/article/4565388-svb-financial-blow-...
https://seekingalpha.com/article/4586033-svb-financial-blew-...
https://seekingalpha.com/article/4586342-svb-financial-today...
Re: A Bank of One's Own
#10It worries me that people assume SVB must have taken crazy risks on startups or crypto, when the actual mistakes were locking up so much money in long-term mortgage and Treasury bonds, and having clients who talk to each other.