Silicon Valley Bank is Dead

Discussion in 'The Mainboard' started by Menelaus, Mar 10, 2023.

  1. Butthead

    Butthead narmas, narmas

    I feel like anything I say here will make me look like an idiot

    It's legal for the owners of a bank to loan themselves other people's money at cost?
     
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  2. bertwing

    bertwing check out the nametag grandma
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    The good news is you don’t have any money so you don’t have shit to worry about
     
  3. devine

    devine hi, i am user devine
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    Thank god
     
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  4. Lyrtch

    Lyrtch My second favorite meat is hamburger
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  5. Daniel Ocean

    Daniel Ocean I only lied about being a thief
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    what?
     
  6. Arrec Bardwin

    Arrec Bardwin La Araña Discoteca
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    That’s not what he was saying; He was saying they provided private banking solutions to lots of VC and Tech founders and many of them did 100% of their banking with them.
     
  7. pperc

    pperc Well-Known Member
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    11:46 AM 10 Mar ’23 SIVB-US Silicon Valley Bank closed by California regulators -- FDIC ($106.04, 0.00)
    • Silicon Valley Bank, Santa Clara, California, was closed today by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect insured depositors, the FDIC created the Deposit Insurance National Bank of Santa Clara (DINB). At the time of closing, the FDIC as receiver immediately transferred to the DINB all insured deposits of Silicon Valley Bank.
    • All insured depositors will have full access to their insured deposits no later than Monday morning, March 13, 2023. The FDIC will pay uninsured depositors an advance dividend within the next week. Uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds. As the FDIC sells the assets of Silicon Valley Bank, future dividend payments may be made to uninsured depositors.
    • Silicon Valley Bank had 17 branches in California and Massachusetts. The main office and all branches of Silicon Valley Bank will reopen on Monday, March 13, 2023. The DINB will maintain Silicon Valley Bank’s normal business hours. Banking activities will resume no later than Monday, March 13, including on-line banking and other services. Silicon Valley Bank’s official checks will continue to clear. Under the Federal Deposit Insurance Act, the FDIC may create a DINB to ensure that customers have continued access to their insured funds.
    • As of December 31, 2022, Silicon Valley Bank had approximately $209.0 billion in total assets and about $175.4 billion in total deposits. At the time of closing, the amount of deposits in excess of the insurance limits was undetermined. The amount of uninsured deposits will be determined once the FDIC obtains additional information from the bank and customers.
    • Customers with accounts in excess of $250,000 should contact the FDIC toll-free at 1-866-799-0959.
    • The FDIC as receiver will retain all the assets from Silicon Valley Bank for later disposition. Loan customers should continue to make their payments as usual.
    • Silicon Valley Bank is the first FDIC-insured institution to fail this year.
     
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  8. pperc

    pperc Well-Known Member
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    who said at cost? they charged interest (i thought you were talking about making loans to CEO/founders of companies that banked with SVB)
     
    #58 pperc, Mar 10, 2023
    Last edited: Mar 10, 2023
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  9. Hank Scorpio

    Hank Scorpio Globex Corporation, Philanthropist, Supervillain
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    They ain't played nobody!
     
  10. Fusiontegra

    Fusiontegra My life is dope and I do dope shit.#SparedByThanos
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  11. Hank Scorpio

    Hank Scorpio Globex Corporation, Philanthropist, Supervillain
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    It was right there and I missed it. Fuck!
     
  12. ~ taylor ~

    ~ taylor ~ Well-Known Member
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    We have a lot of clients shitting their pants right now. Payroll companies are telling clients to wire them money from another bank to insure payrolls get paid next Wednesday. The FDIC has set up another bank to handle all insured amounts, and those amounts should be available Monday. Uninsured amounts are completely up in the air right now.
     
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  13. ~ taylor ~

    ~ taylor ~ Well-Known Member
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    I see that was covered above.
     
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  14. Arrec Bardwin

    Arrec Bardwin La Araña Discoteca
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    Saw that 93% of deposits were uninsured
     
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  15. Nostradumass

    Nostradumass Well-Known Member
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    Well shit it's only March.
     
  16. Menelaus

    Menelaus The Red-Haired King
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    Makes sense since it’s mainly corp deposits
     
  17. pperc

    pperc Well-Known Member
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  18. pperc

    pperc Well-Known Member
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    Crisis management/comms was absolutely attrocious
     
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  19. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    Fuck you larry
     
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  20. ScFan27

    ScFan27 Well-Known Member
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    Not quite. In 2008 there was billions , if not trillions, of dollars tied up in derivatives based on horrific mortgages that people didn’t have to even prove income for. When people defaulted those loans defaulted and created a shit show of a domino effect throughout the economy.

    This bank was trying to generate yield via investments in mortgage backed securities. When interest rates increased it lowered the price of the bonds. So his $100 bond is now worth $95. But when mortgage rates are at 6.5% his 2% bond is now worth probably around $50. He had horrible timing and also shitty risk management around his duration and interest rate risk.
     
    #70 ScFan27, Mar 10, 2023
    Last edited: Mar 10, 2023
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  21. Pile Driving Miss Daisy

    Pile Driving Miss Daisy It angries up the blood
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    Our CEO had to send out an email to probably calm a lot of people's nerves. I'm sure he wouldn't tell us if things weren't fine but apparently we don't have a ton of exposure to SVB and payroll is fine.
     
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  22. Where Eagles Dare

    Where Eagles Dare The Specialist Show On Earth
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    Yeah, posted this last page.

    It was bad investment and too much expose/risk management vs any tech crypto scam shop.
     
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  23. westcoastbias

    westcoastbias Well-Known Member
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    A CFO friend of mine in a small software startup with ~50 employees uses them and told me she's totally cutoff and trying to figure out what to do with payroll right now. This isn't going to just fuck over "silicon valley", it's going to hurt a lot of small tech companies too.
     
  24. pperc

    pperc Well-Known Member
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    why? he's right. the assets at SVB are > than the uninsured deposits anyways and everyone is getting back their money eventually. all this does is create liquidity for companies so they don't miss payroll.
     
    #74 pperc, Mar 10, 2023
    Last edited: Mar 10, 2023
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  25. pperc

    pperc Well-Known Member
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    duration becomes a huge problem with MBS's. most people are holding onto that 30 year fixed at 2.75% for all 30 years. Terribly risk management, for sure, though. Other banks, like PacWest, are in way better shape.
     
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  26. pperc

    pperc Well-Known Member
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    its nice you got some communication
     
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  27. pperc

    pperc Well-Known Member
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    its going to hurt a a lot of people. like a lot.
     
  28. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    If that's the actual case great, but that's not how summers is operating

    Summers is notorious about bailouts when it comes to saving people in his class but almost always against stimulus that helps regular people. He's continuing the surprise stereotype.
     
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  29. pperc

    pperc Well-Known Member
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    the people who would be getting helped are the working class. we are talking about making payroll.
     
  30. Daddy Rabbit

    Daddy Rabbit obviously silly and not productive
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    Not that I had a lot of faith in my employer's ability to raise enough capital at our upcoming deadline, but I'm sure this dampers any money coming from a VC right now.
     
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  31. herb.burdette

    herb.burdette Meet me at the corner of 8th and Worthington
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    This is perfect.
     
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  32. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    Again, the 93% uninsured number is stark. If the company has assets to liquidate to make everyone whole that's great. Normal people will be mostly protected by FDIC.
     
  33. pperc

    pperc Well-Known Member
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    not necessarily. VCs are just super overwhelmed and busy with this for the next week or two. but i don't think it'll cause any further issues with new investments

    its a commercial bank. that means it;'s mostly companies that bank with them, not individuals. those companies have employees. those employees get paid every 2 weeks. to make payroll you have to have access to your money. now these companies do not. the working class lives paycheck to paycheck. what is hard about this to get?
     
  34. pperc

    pperc Well-Known Member
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    UNSUBSTANTIATED INFORMATION TIME.

    This comes from the COO of a large, regional bank:

    we can’t really predict/guarantee what’s going on w/ them BUT our COO has said they’re hearing it’s likely that by Monday folks may be able to get like 80% of their balances. Remainder by end of next week…
     
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  35. Tarpon Nole

    Tarpon Nole Well-Known Member
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    More like Silican’t Valley Bank iyam
     
  36. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    brother i'm laughing at the idea of bailing out the bank by making depositors whole before we know if there's assets to cover it from Larry Summers

    you're just flailing around for whatever reason
     
  37. pperc

    pperc Well-Known Member
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    the bank is already dead. they aren't being "bailed out". Sommers is suggesting bailing out company depositors so they can make payroll. a simple balance sheet from SVBs 12/31 corporate filing tells you that they had assets > non-insured deposits. you are the one flailing outside of your element here.
     
  38. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    are you even reading my posts
     
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  39. pperc

    pperc Well-Known Member
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    are you thinking before you type?
     
  40. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    do you think deposits should be made whole if there aren't assets in the bank to do so
     
  41. pperc

    pperc Well-Known Member
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    no, but that's not what's going on here.
    do you think working class people deserve to be paid for their work?
     
  42. dblplay1212

    dblplay1212 Well-Known Member
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    lol no they aren't
     
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  43. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    that is very literally what Summers was advocating and why I posted the tweet you responded to

    i'm glad we're on the same page and you can stop being a weirdo like you constantly do
     
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  44. pperc

    pperc Well-Known Member
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    granted, it was a bit of hyperbole... but certainly longer holds the lower the rates when rates suddenly later shoot up
     
  45. Where Eagles Dare

    Where Eagles Dare The Specialist Show On Earth
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    Why is it stark? It's business who primarily bank there, not random people.

    I hate trickle down, but you have an organization that has 3mm in assets in a bank (probably not a massive company) but they might have 200 employees. You just wipe out the assets of those companies in a commercial bank and you aren't just hurting the small investor class, but the massive paycheck employees.
     
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  46. dblplay1212

    dblplay1212 Well-Known Member
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    I haven't looked at it recently, but a few years ago the average length of a 30 year mortgage was 7 years.
     
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  47. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    some of yall are wildly more radical politically than you even know

    the idea we just save every company and make shady bank investments risk free has some big downsides!
     
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  48. pperc

    pperc Well-Known Member
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    I don't care of Sommers was right for the wrong reasons. He's still right. And that's what I said to begin with. Saying "fuck you" and posting it was your doing, not mine. I simply added proper discussion to an issue of working class people getting paid, which you seem to not care about since you're not personally impacted.

    you are on another planet, let alone another page. your depth of knowledge on this is poor.
     
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  49. pperc

    pperc Well-Known Member
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    certainly i assume people shorten their mortgage if they can get a new mortgage at the same rate and lower their payment, but that's harder to do when rates shoot up
     
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  50. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    ok so you think we SHOULD cover deposits if there's not assets to fulfill them. glad we ironed that piece out.