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SVB Hall of Shame

svbhallofshame.wordpress.com

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Re: SVB Hall of Shame

#71

Post by twelve40 »

ineedasername wrote: post #62
cowpig wrote: post #4

Earlier quoted context omitted.

> The people in the VC community who triggered the bank run did the right thing by their startups. How do you arrive at this conclusion? Without a run on the bank none of this would have happened.

Once the run started then VCs who had not previously had a negative stance on SVB may have done right by their startups, but yeah not the ones who actually started it in the first place.

I have no idea if this is correct or not, but by some accounts, there were noticeable issues with regular transfers which caused the initial concern about the bank. It's not like someone started this out of boredom.

https://www.bloomberg.com/news/articles/2023-03-11/thiel-s-f...

Re: SVB Hall of Shame

#72

Post by ineedasername »

danielmarkbruce wrote: post #23
bandrami wrote: post #13

Earlier quoted context omitted.

Not insolvent, illiquid. Calling SVB insolvent is like calling Elon Musk "poor" because his income this year was $0.

They were liquid. They could sell the $80 bill or so of bonds they had quickly and at fair value. Their problem was selling forced them to face the reality that they'd lost $12 or $13 bill on a wrong way interest rate bet.

Under that interpretation nearly everything is liquid.

If you’re going to take a loss by selling an asset prematurely, it is illiquid. Otherwise you’d have to say things like the houses people own are liquid because the person could sell it in a day if they were willing to do so for 80 cents on the dollar.

That is not the financial world’s definition of “liquid”

Re: SVB Hall of Shame

#73

Post by iscrewyou »

jliptzin wrote: post #66
davidw wrote: post #6

Earlier quoted context omitted.

> The people in the VC community who triggered the bank run did the right thing by their startups. I don't really have a horse in this race, but: while the above argument makes sense, what about all their future startups? Everyone says nice things about how it was good to have this bank that understood startups and treated them well, and now that is all gone. And no one who had deposits lost their money anyway. It se…

What exactly did SVB do for startups that other banks could not?

Here’s an article from 2015: https://www.latimes.com/business/la-fi-silicon-valley-bank-2...

Re: SVB Hall of Shame

#74

Post by croes »

drc500free wrote: post #35

The amount of victim-blaming astroturfing I've seen on hn this week has been quite surprising. Depositors are never, ever to blame for bank runs. Edit: From the about page: > Who I am is not important. Holding accountable the hypocrites responsible for Silicon Valley Bank’s collapse is. I can be reached at svbhallofshame@protonmail.com. All correspondence will be kept anonymous. It's just missing a PAC called somethi…

Can't you kill any bank with a bank run?

Re: SVB Hall of Shame

#75

Post by dahdum »

naet wrote: post #61

I don't think I agree with this as a mark of "shame". Were these companies wrong to pull money out of SVB when they (correctly) thought the bank might be insolvent or headed for trouble? Are we celebrating those who left their money in, despite the warnings, when they could have potentially lost it all if the government didn't step in and make an unprecedented promise to honor the deposits? Would that have been "hero…

In a slightly different reality…

“Sorry team, our main VC advised us to keep our money in SVB because it’s the right thing to do. We can’t make payroll. Our VC, true to their ideals, kept their cash in SVB too. They can’t help us. Kindly cast your blame on the thousands of startup peers that withdrew and remain unscathed. Their blatant self-interest may have killed us, but we are the true moral victors.”

Re: SVB Hall of Shame

#77

Post by indigodaddy »

OP website is complete hogwash. Blaming VCs for deposit drawdowns fully within their right is shortsighted. Now the entire banking industry will need to reassess their treasury bond investment risk. Of course mass actions related to derisking those exposures could also spiral out of control within the ecosystem, with further weak banks with way too much risk exposed and failing, but it’s likely necessary.

Re: SVB Hall of Shame

#78

Post by 462436347 »

These people absolutely deserve to be named and shamed. If the big, "evil" banks can cooperate for the collective good of their industry and the wider economy as they did today by injecting $30 billion of deposits into First Republic to forestall its collapse, there's no reason why these supposedly enlightened, rational VCs couldn't at a minimum collectively agree to just not completely withdraw their deposits from SVB in a stampede, or perhaps go a bit further and actually help them raise additional capital.

Instead they gutted the bank that provided them with banking services for 40 years, often when other banks would not. Some of them even did so two-facedly, publicly claiming to support SVB while pulling their and their companies' money out of it:

> Y Combinator advised its portfolios to collapse SVB, while Garry Tan petitioned the government for a bailout

Union Square:

> Signed the statement [of support of SVB] after contributing to the run.

Fred Wilson seems like a great example of PG's "Mean People Fail" delusion.

Re: SVB Hall of Shame

#79

Post by NineStarPoint »

quesera wrote: post #37
rexreed wrote: post #18

Earlier quoted context omitted.

The best way to prevent a bank run is not to run. A stampede isn't caused by the movement of a lone animal, but by the herd. It's a classic feedback loop.

> The best way to prevent a bank run is not to run No, the only way to prevent a bank run is to get everyone else not to run. And since that's impossible, there's only one rational choice to make, which is to be first out the door. This is bad! But it's true.

Metaphorically you should aim to be the second out the door really. It’s the first person out the door who starts the run, and starting the run is rarely rational. Once the run has begun, yeah you should aim to be out the door fast.

Unfortunately it’s very rare to have the knowledge and/or connections necessary to guarantee that you can not instigate a run, but still withdraw before the collapse.

Re: SVB Hall of Shame

#80

Post by lmm »

twelve40 wrote: post #46

If Bloomberg is to be believed, the run started after the funds started experiencing real problems with regular money movement. In which case, it is kind of an emergency? > But the firm learned that its limited partners were encountering issues using SVB services as they tried to transfer the funds — they weren’t immediately going through as expected, the person said. https://www.bloomberg.com/news/articles/2023-03-1…

> So how does this even end? Is it a temporary thing until the bridge bank gets acquired by somebody, or do they have now perpetual 100% protection from the FDIC? Really trying to understand.

That will depend on what the FDIC does, and I don't think even they know what the end result will be. They'd like to get it back into private hands (and to that end they want to keep it operating normally, to make it as attractive as possible to buy, at least for the time being), but that depends on finding someone willing to take it. If they can't, they might start gradually winding it down in orderly fashion (e.g. close to new accounts, start giving people a while to transition), or they might keep running it in the current limbo forever (just look at Freddy and Fannie).

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