Silicon Valley Bank

[Bill]

[TheRealBadger]

Originally Posted by bill_daniels

Because the job of a risk manager is to mitigate risk, not to virtue signal, This is the person in the room that's tasked with saying, "this is not a good idea, this is not going to go well for us."

This woman chose to, instead, focus her efforts on showing she was "one of the good ones" willing to actively discriminate against White men. How do you think that reflected in her evaluation of potential loans and investments?

Evidently, that strategy didn't work out too well. But hey, they virtue signaled right down to the bitter end, so they've got that going for them.

Ah, so you think this is because she was gay. Okay.

Apparently you think the second largest bank collapse in US history, one of the top 20 largest commercial banks in the world, is because of their focus on creating an inclusive environment for people of different backgrounds.

I’m sure you are right.

OR it could be because of the massive stimulus money that has been pumped into the economy since 2020, the onset of a massive inflationary situation since then, and the subsequent rising of rates by a non-political government organization that in turn makes an entire market of low-interest bonds unsellable in short cycles other than a loss which then creates an insolvency.

I’ll bet it’s not finance and Econ 101. I’ll bet it’s because of the gheys.

That’s your position?

[Louie Detroit]

Originally Posted by TheRealBadger

Ah, so you think this is because she was gay. Okay.

Apparently you think the second largest bank collapse in US history, one of the top 20 largest commercial banks in the world, is because of their focus on creating an inclusive environment for people of different backgrounds.

I’m sure you are right.

OR it could be because of the massive stimulus money that has been pumped into the economy since 2020, the onset of a massive inflationary situation since then, and the subsequent rising of rates by a non-political government organization that in turn makes an entire market of low-interest bonds unsellable in short cycles other than a loss which then creates an insolvency.

I’ll bet it’s not finance and Econ 101. I’ll bet it’s because of the gheys.

That’s your position?

There is absolutely no reason anyone needs to tell the world they’re a queer, this kind of TMI demonstrates why God created closets.

[TheRealBadger]

Originally Posted by Louie Detroit

There is absolutely no reason anyone needs to tell the world they’re a queer, this kind of TMI demonstrates why God created closets.

I understand you believe that.

But please tell me why that caused the bank to fail or why it’s relevant?

[Bill]

Originally Posted by TheRealBadger

Ah, so you think this is because she was gay. Okay.

Apparently you think the second largest bank collapse in US history, one of the top 20 largest commercial banks in the world, is because of their focus on creating an inclusive environment for people of different backgrounds.

I’m sure you are right.

OR it could be because of the massive stimulus money that has been pumped into the economy since 2020, the onset of a massive inflationary situation since then, and the subsequent rising of rates by a non-political government organization that in turn makes an entire market of low-interest bonds unsellable in short cycles other than a loss which then creates an insolvency.

I’ll bet it’s not finance and Econ 101. I’ll bet it’s because of the gheys.

That’s your position?

Do you remember the last financial meltdown? The housing collapse? Remember WHY that happened? Hint: It was because the Bush regime forced lenders to loan money to clearly unqualified borrowers, in an effort to boost home ownership among non Whites.

Banking used to be a very conservative industry, you make loans to people you have vetted who have the ability and proven track record of paying back loans. And this strategy worked well.

SVB went with different strategy.

[TheRealBadger]

Originally Posted by bill_daniels

Do you remember the last financial meltdown? The housing collapse? Remember WHY that happened? Hint: It was because the Bush regime forced lenders to loan money to clearly unqualified borrowers, in an effort to boost home ownership among non Whites.

Banking used to be a very conservative industry, you make loans to people you have vetted who have the ability and proven track record of paying back loans. And this strategy worked well.

SVB went with different strategy.

That’s actually not what happened to SVB at all. They didn’t have a default issue. At all.

Maybe read up a little bit more on how commercial banking works and what happened in this case. They did not have a default issue.

But none of that really matters because you seem to think the gheys broke the bank.

[Louie Detroit]

Originally Posted by TheRealBadger

I understand you believe that.

But please tell me why that caused the bank to fail or why it’s relevant?

You tell us how a person’s race, sexuality blah blah blah is relevant in a business environment? Please give an answer that isn’t the usual line of feel good virtue signaling and platitudes.

[TheRealBadger]

Originally Posted by Louie Detroit

You tell us how a person’s race, sexuality blah blah blah is relevant in a business environment? Please give an answer that isn’t the usual line of feel good virtue signaling and platitudes.

I didn’t say it did. It has nothing to do with the OP. Anyone bringing that into it is just trolling. You are trolling.

[Louie Detroit]

Originally Posted by TheRealBadger

I don’t have to. It has nothing to do with the OP. Anyone bringing that into it is just trolling. You are trolling.

Pot meet kettle. Bill explained the relevance of the woke bullshit in regards to the OP in post #18. You’re the one trying to sidetrack the thread into the usual victim fest, focusing on the queer of course, being they are still at the top of the hierarchy of liberal deities.

The woke garbage didn’t cause the collapse but it sure as hell didn’t help matters either.

[TheRealBadger]

Originally Posted by Louie Detroit

Pot meet kettle. Bill explained the relevance of the woke bullshit in regards to the OP in post #18. You’re the one trying to sidetrack the thread into the usual victim fest, focusing on the queer of course, being they are still at the top of the hierarchy of liberal deities.

The woke garbage didn’t cause the collapse but it sure as hell didn’t help matters either.

No, he didn’t. He showed no actual causation at all. Keep trolling trolls.

[Louie Detroit]

Originally Posted by TheRealBadger

No, he didn’t. He showed no actual causation at all. Keep trolling trolls.

Not everything in life is provable, that is where common sense comes into play.

[Rob]

Risk has great rewards, but often at a cost

[TheRealBadger]

Originally Posted by Louie Detroit

Not everything in life is provable, that is where common sense comes into play.

So, your alleged common sense aligns with bill’s? That this has nothing to do with significant economic events in the world and has everything to do with the gays?

[Bill]

Twitter

Oh no, that sucks. Anyway......

[Old Ben]

Originally Posted by TheRealBadger

I understand you believe that.

But please tell me why that caused the bank to fail or why it’s relevant?

Same thing as the housing bubble burst. Loans to subpar barrowers that they knew could not make the payments. Finest affirmative action in play.

[TheRealBadger]

Originally Posted by Old Ben

Same thing as the housing bubble burst. Loans to subpar barrowers that they knew could not make the payments. Finest affirmative action in play.

Actually, that has nothing to do with it. This is not a default issue.

And it has nothing to do with housing as this is a commercial bank. Do you know what a commercial bank is?

And none of that has anything to do with affirmative action.

[Old Ben]

Originally Posted by TheRealBadger

Actually, that has nothing to do with it. This is not a default issue. BS

And it has nothing to do with housing as this is a commercial bank. Do you know what a commercial bank is? YES

And none of that has anything to do with affirmative action. BS

[LATB]

Originally Posted by Louie Detroit

Instead of being pregnant, barefoot and in the kitchen making a sammie, they chose to once again demonstrate the Peter principle and why serious businesses need to be run mostly by
adult white men.

The backbone of America. And “they” hate it.

[Hardluck]

This must be STS's brother!! He thrives on this chit! Ignore him and don't feed the fuking troll!

[Vette40th]

Borrowed from a financial forum.
"So here is possible explanation for what happened to Silicon Valley Bank.

A couple year ago, Venture Capital money was flowing like a tsunami into tech startups.

Those tech startups dumped all their VC raises into SVB.

SVB has to get some yield on that tsunami of deposits.

SVB didn’t buy Powerball tickets or invest in Nigerian gold schemes.

SVB bought low-risk bonds and Mortgage Backed Securities(MBS).

Many may be familiar with MBS and Collateralized Debt Obligations(CDO) from the book and film The Big Short.

The difference being that the MBS bought by SVB were boring, low yield, and safe assets to store depositor cash and get some yield(under 2%).

The problem seems to be that the tsunami of VC backed tech startup deposits arrived when interest rates were insanely low.

A few years ago, risk free return was pretty much zero.

But as interest rates rapidly rose, the risk free return today buying US T-Bills is approaching 5%.

While the MBS that SVB bought a few years ago will all pay out with interest(over 10 years), their market value today is discounted if liquidity is needed.

SVB sold a bunch of MBS at a discount for the liquidity and took a hit of under $2B, while concurrently conducting a debt/equity capital raise.

SVB wouldn’t need to rapidly sell some of their MBS at a discount if there wasn’t a spike in redemptions from a bank run sparked by the likes of Peter Thiel.

And the rapid redemptions /bank run scared away the investors lined up for the SVB debt/equity capital raise.

To be clear, this wasn’t buying The Big Short / GFC era MBS that were toxic wet dynamite.

These were boring and safe MBS, with better yield and worse liquidity than T-Bills.

If depositor cash was put into T-Bills instead of a mix of T-Bill and 10 year MBS for some extra yield(when interest rates were approaching zero), this would not have happened.

It also appears 3 members of SVB senior leadership made substantial sales of their SVB shareholding less than 2 weeks prior to the collapse.

Publicly traded company insiders are limited to certain trading windows and senior leadership typically pre-schedule transactions for transparency.

The Chief Risk Officer part is interesting.

Laura Izurieta left the role of Chief Risk Officer for SVB in April ‘22.

Kim Olsen, the current Chief Risk Officer for SVB, has only been in the job and working at SVB since January ‘23.

Details on the departure of Izurieta and the hiring of Olsen being thrown a “hospital pass” would be interesting to learn.

Mezzanine and bridging loan biz to startups is going to be fast and furious the next few months.

The most painful part of this saga is thinking of it like a sequoia/red wood forest suffering from a forest fire.

The giants will be scorched, but they are robust and resilient and will survive.

The tiny startup seeds that haven’t breached the surface and started to scale will survive, but most of them fail to breach the surface and die before scaling anyway.

It’s the adolescent sequoia/redwood startups that have already stated scaling with most of their growth risk in the rear view mirror that are at greatest risk of being burned to a cinder here."

And that would leave a giant smoking hole in the cycle of startup life. That’s where the wealth and well paying jobs creation really accelerates.

The folks with the liquidity to save them will probably make Tony Soprano level extortion seem like Mister Rogers.

I hope that is not the case.