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Bank run on Silicon Valley Bank

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Re: Bank run on Silicon Valley Bank

#841

Post by zamnos »

ashwagary wrote: post #813
simple-thoughts wrote: post #489

Earlier quoted context omitted.

Ah yes, the solution is more restrictions on banks to hold exactly the types of assets that are underwater! No, sorry you are wrong. The financial crisis that just started this week is due to banks holding securities that they are required to hold by law - the law considers mortgages and government debt to be safe yet it is now proven (and anyone with basic finance knowledge knew ahead of time) to be extremely unsafe…

>banks holding securities that they are required to hold by law Not an expert in this area but when distilling everything I understand about this topic, it seems like big banks (too big to fail?) collude with the federal reserve to rob smaller banks (of clients and value) using interest rate games and these "requirements" every x years. If anyone has an explanation as to why that's a wrong conclusion, please share.

That's a bit like saying having a door with a lock on your house is a conspiracy to get you to spend money with the door and lock industry. If you squint real hard that kinda sorta looks true, but it ignores the very real protection having a door with a lock on the front of your house actually gets you. Forcing banks to have X amount of reserves in a "safe" investment vehicle should protect them from exactly this kind of problem. The fact that it didn't in this case will be a case study for years to come, and will effect change in FDIC's requirements.

Re: Bank run on Silicon Valley Bank

#842

Post by cj »

throwwwaway69 wrote: post #815
cj wrote: post #447

Earlier quoted context omitted.

Citing the justice department’s website: “The requirement that the defendant act with the intent to deprive the owner of his property makes embezzlement a specific intent crime.” Meaning your safe as long as your intent is not to steal the money. But if your concerned definitely ask your lawyer. (Accountant won’t be able to provide that sort of legal advice)

Putting yourself in a position to prove intent (which is basically impossible) still isn't a great idea

Strongly disagree, now that we see SVB clients are currently screwed.

It’s very easy to prove good intent when you didn’t benefit in any way. Besides, it’s the prosecution’s burden to improve intent, not the defendant’s.

Transferring $10 million to a personal account for 1 day then transferring again to a permanent business account a day later has zero legal risk when the bank you’re moving away from is literally collapsing.

Re: Bank run on Silicon Valley Bank

#843

Post by twelve40 »

zamnos wrote: post #836
twelve40 wrote: post #665

Earlier quoted context omitted.

Ok, let's chalk it up to my irresistible charm when I showed up at the branch that day, I can live with that.

I'm guessing your corp didn't have a 1 million dollar check to deposit, with expectations that most of that would get sent out to employees and AWS/GCP over the next few years, and that you would be receiving another 10 million dollars shortly thereafter. Bragging about getting a car loan when (I assume) you have good history and credit? Unless it was a $1.5m Mclaren P1 supercar or something, that's not remotely in t…

the person i was replying to said no way a brand new corp can get an account or credit cards, they didn't say anything about millions. That directly contradicted my experience, and despite being "anecdotal", I'm sure i was subject to the same rules and equations as everyone else.

If you want another anecdote - this one has millions in it - my last startup banked with Wells Fargo from pre-seed right up to series A with >10mil in three funding rounds and never had a single problem. Must be my crazy luck here as well!

At any rate, SVB is dead now, so it's pointless to argue whether they were really a startup's best friend or just hyped that up. They are not anyone's friend anymore, they are dead and the only real question here is how to get the damn money back from them.

Re: Bank run on Silicon Valley Bank

#844

Post by Cabal »

FanaHOVA wrote: post #553
cj wrote: post #400

I just received an email from one of our investors, sent to all portfolio companies, advising everyone to transfer all of their money out of SVB at 8:30am tomorrow morning. Investment/VC funds are doing the same (we’re talking many, many billions of deposits lost in a span of a few days). There is a chance SVB will freeze assets while they deal w liquidity crunch which may impact startup ability to pay bills, pay sal…

I will not be giving advice or opinions, but please don’t post anecdotes as facts to generate panic. This isn’t what most VC funds are doing.

12 hours later, this has not aged well.

Re: Bank run on Silicon Valley Bank

#845

Post by dredmorbius »

jazzyjackson wrote: post #574
nonethewiser wrote: post #562

Earlier quoted context omitted.

> “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.” Is that terribly worded or is it just me? I figure it’s supposed to be poetic but I find it tedious. I think it could be simplified like this: “A banker who argues his creditworthiness has none.” I realize it’s a quote but holy shit.

I find "creditworthiness" to be an exceptionally inelegant turn of phrase.

Comes quite naturally if you're familiar with German word construction.

That said, it doesn't seem to have emerged into widespread use until well after the 1950s, so would have been a peculiar choice for a 19th century author:

https://books.google.com/ngrams/graph?content=creditworthine...>

Re: Bank run on Silicon Valley Bank

#846

Post by za3faran »

borski wrote: post #584
UncleOxidant wrote: post #581

Earlier quoted context omitted.

"its almost like making bets with money you don't actually have yet is a bad idea" Banking is supposed to be a very boring business (at least under Glass-Steagal-like regulation). Making "bets" with money they don't have isn't something retail banks are supposed to be doing. Yes, we know that some banks were doing this prior to the '08 GFC, but wasn't that supposed to have been reigned in by the reinstatement of Glas…

Loans are bets. You’re limiting bets to investments, but lending money is a bet that the person you lent it to will be able to pay it back; albeit a properly collateralized bet with solid underwriting, hopefully. But it’s certainly not a 100% guarantee. Retail banks absolutely underwrite loans.

Maybe running an economy on interest bearing loans was not a good idea after all, who would have known? We've had checks notes only a few thousand years to know that.

Re: Bank run on Silicon Valley Bank

#847

Post by za3faran »

borski wrote: post #521
malermeister wrote: post #519

Earlier quoted context omitted.

Maybe the whole economic system just isn't viable, as we've seen time and time again?

Citation needed. Also, I’m all ears for a viable replacement that doesn’t devolve into autocracy or government-endorsed corruption, and still allows for taking risk and forward progress.

Islamic finance.

Re: Bank run on Silicon Valley Bank

#848

Post by kragen »

tito wrote: post #357

SVB is our bank, I got in touch with a member of the senior team there and got the following message to share. (My own interpretation is I'm comfortable and I'm not planning to pursue it further at the moment): As you know, we are limited in what we can share until the transaction formally closes next week but in the meantime I’m attaching concise information on the strength of our business, based on our recent mid-q…

i enjoyed reading this comment last night after it was posted 20 hours ago but i didn't think it was very likely to be correct

4 hours ago the fdic closed the bank

i'm curious whether your account was fully fdic insured or how much you stand to potentially lose if not

Re: Bank run on Silicon Valley Bank

#849

Post by 22289d »

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.

Every bank would be in trouble if everyone took their money out

Re: Bank run on Silicon Valley Bank

#850

Post by roflyear »

rjzzleep wrote: post #757
BaRRaKID wrote: post #743

Earlier quoted context omitted.

You do know that that video is from the TV COMEDY show Servant of the People, where he plays the role of a Ukrainian president BEFORE he was actually elected president?

[flagged]

You need a source beyond the video being obviously choreographed? Do you think real-life interactions are filmed that way?
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