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Bank run on Silicon Valley Bank

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Re: Bank run on Silicon Valley Bank

#331

Post by [deleted] »

boringg wrote: post #116
rippercushions wrote: post #15

From https://techcrunch.com/2023/03/09/silicon-valley-banks-share... : Becker said the bank has “ample liquidity” to support its clients “with one exception: If everybody is telling each other that SVB is in trouble, that will be a challenge.” Pro tip: if you're CEO of a bank that's facing a bank run, don't tell the press that you'll be in trouble if everybody takes their money out.

Poor move by the CEO. It's like he wanted to be honest with everyone but that wasn't a strong signal. Also out most of the banks - you would expect that the clients of SVB are a little more sophisticated than your retail bank demographic being start-up companies and all (big assumption).

[deleted]

Re: Bank run on Silicon Valley Bank

#332

Post by valvar »

honeybadger1 wrote: post #291
gnicholas wrote: post #282

Earlier quoted context omitted.

TBH I wasn't sure what the commenter was trying to communicate. That she had been cancelled? That she should be cancelled? I definitely wouldn't have flagged such a comment, but I would agree that it wasn't exactly adding to the discourse.

It seemed like a tongue in cheek joke about people projecting that women are strong(like south park style joke I guess) and if you say they are not..you are cancelled? I dunno, I appreciate humor, but yeah that was swift admin action on that.

I think the flagged commenter was probably thinking of the quote in terms of a framing related to trans people.

Re: Bank run on Silicon Valley Bank

#333

Post by uoaei »

kurthr wrote: post #307
uoaei wrote: post #261

Earlier quoted context omitted.

This pre-supposes a pretty radical (yet normalized nowadays) economic philosophy: that growth per se is good. A more nuanced approach would be to value and triage lending opportunities according to how much they contribute to the heating up of the economy, and how much opportunity for future sustainability they provide.

I'll ask then. What happens to an organism when it stops growing? It's an exponential process and there are really only 2 states except for an infinitesimally small space between.

The only "natural" organism that grows without attempting a quasi-stable, dynamic equilibrium with its environment is cancer. The exponential processes you refer to are not "natural" in the general sense and only represent the barest, simplest models.

Re: Bank run on Silicon Valley Bank

#334

Post by twblalock »

nordsieck wrote: post #302
PragmaticPulp wrote: post #202

Earlier quoted context omitted.

This is kind of like saying we can eliminate most automobile fatalities by eliminating cars and making everyone walk or take the train everywhere. Yes, it would solve one type of problem. But nobody wants your solution because it’s an unreasonable trade off for everyone to solve an extremely rare edge case. Single-minded optimization for single edge cases is really easy in fantasy worlds, but in the real world people…

> Yes, it would solve one type of problem. But nobody wants your solution because it’s an unreasonable trade off for everyone to solve an extremely rare edge case. Can you explain why this is bad? People lived with hard-ish money systems for extremely long periods of time. > The concepts of assets and liabilities are well understood in the business world. Banks aren’t “lying” and fractional reserve banking does not m…

> Can you explain why this is bad? People lived with hard-ish money systems for extremely long periods of time.

The problems those systems caused are the reason we created the Fed and soft money. Hard money ruined many lives, caused many panics, and is an intellectually bankrupt idea that only cranks are still devoted to.

Re: Bank run on Silicon Valley Bank

#335

Post by Narkov »

axlee wrote: post #268
FormerBandmate wrote: post #137

Earlier quoted context omitted.

They’re selling equity to get capital. That’s pretty dire straits, FTX was doing that before they went under (I’m not saying this is FTX, I’m just saying it can be akin to the nuclear option)

FTX's actions have nothing to do with what is happening with SVB, it's not even close. Why make a bad parallel?

The parallel is selling equity when you are in trouble is not ideal. Different reasons or sectors or whatever...but the principal is the same.

Re: Bank run on Silicon Valley Bank

#336

Post by fatjokes »

TheAlchemist wrote: post #318
dublinben wrote: post #176

Earlier quoted context omitted.

Matt Levine is fond of this highly relevant quote by Bagehot: “Every banker knows that if he has to prove that he is worthy of credit, however good may be his arguments, in fact his credit is gone.” It seems that CEOs of banks haven't learned anything since 1873 when this was observed.

100% true ! They are already gone. However, not to defend the guy, but as a CEO of this bank he ... has to say something. And whatever he says it will be bad anyway.

At that point I think he should've just bald-face deny reality: "nobody is saying we're in trouble! You're cherry-picking our enemies"

Re: Bank run on Silicon Valley Bank

#337

Post by TheAlchemist »

favorited wrote: post #287
fallingknife wrote: post #57

Earlier quoted context omitted.

Every bank is screwed if everybody takes all their money out. And everybody already knows it.

Literally any business is screwed if all of their customers leave.

There is a nuance here - the business in question (bank) holds customers money !

Re: Bank run on Silicon Valley Bank

#338

Post by Narkov »

danielmarkbruce wrote: post #181
anon291 wrote: post #19

Earlier quoted context omitted.

Perhaps I'm overly skeptical, but everyone should know that all banks have the risk of 'if everyone takes their money out, the bank won't be able to make it work', right?

Everyone doesn't need to know or care in many cases. The FDIC insures deposits up to $250k. That covers the vast majority of accounts at most banks. So a run won't occur at most banks. There were hardly any runs in 2008 for this reason - the relatively few "run type things" which happened were where big interbank exposures existed. SVB's customers are weighted significantly more towards businesses who will have more…

> The FDIC insures deposits up to $250k. That covers the vast majority of accounts at most banks. So a run won't occur at most banks.

That's akin to saying my house won't burn down because I have insurance. Don't underestimate the stupidity of large crowds of people.

Re: Bank run on Silicon Valley Bank

#339

Post by 3np »

notch898a wrote: post #313
gnicholas wrote: post #305

Earlier quoted context omitted.

I think the vast majority of flagging is by regular HNers (with some karma threshold), not admins. I try not to make too many jokes on HN. They have to be very clearly funny and/or very spot-on to survive HN's this-isn't-reddit ethos, which seems to be pretty strictly enforced.

My anecdotal experience is jokes/poorly supported takes get downvotes. If you want to get flagged, the best way to do that is to make an irrefutable strong argument that ruffles political or economic feathers of a popular ideology on HN. There's nothing that enrages people here more than an unpopular but sound argumen they don't like, so they flag it to make it go away. If they can quickly disprove you or make you to…

Please link examples.

Re: Bank run on Silicon Valley Bank

#340

Post by sanderjd »

bink wrote: post #190
boringg wrote: post #147

Reminder - SVB is small bank - highest market cap was 50B -- trading at 5B. Low level of contagion. If it does fail - definitely will be felt by start ups with cash at the bank.

I think you're probably right, but "Low level of contagion" sounds exactly like what we heard in 2007.

I don't remember hearing that in 2007. Pretty much the first thing I heard about the financial crisis was that there was gigantic contagion risk throughout the financial system.
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