Adam Schiff on Silicon Valley Bank

[womanofthehills]

Link to tweet

?s=46&t=YZgyyp4w_z7vW3neKxa6cQ

Link to tweet

?s=46&t=YZgyyp4w_z7vW3neKxa6cQ

Link to tweet

?s=46&t=YZgyyp4w_z7vW3neKxa6cQ

[NBachers]

1. We haven't even begun to see the impact of the fallout from this yet. Another pendejo45 atrocity.

[TheBlackAdder]

2. Peter Thiel's tipoff to pull all of the money he had there just days prior needs to be investigated.

[Dorian Gray]

4. I don't think he started the storm

but he added greatly to it. His "rec" made the biggest news and caused the most panic.

What kills me here is that all these companies run payroll for their employees through this bank. (And other banks that may be affected, like First Republic and Signature.) And it isn't only silicon valley companies. People are quick to say: Let them fail, and I understand the instinct.

Best case scenario is that SVB finds a "buyer" (more like forced takeover) for it's commercial banking arm and people can still run payroll for their companies. Let SVB become obsolete without hurting the population.

[Shanti Shanti Shanti]

3. If other banks go under on a Monday panic the whole house of cards could tumble

Several regional banks are likely to go under from what I've heard, this won't be an isolated case

[DVRacer]

5. I won't pretend to understand all of this

But people smarter than me are saying this has to do with the sharp rise in interest rates from the Fed. I see that is also hurting the housing market and car market with rates double what they were and lenders saying no to people not A+ credit.

[Fiendish Thingy]

7. SVB had the same info on rate hikes as all the other banks

But chose to handle it differently, buying bonds, then selling them for a loss to raise capital.

[usonian]

8. They were un-hedged against interest rate rises.

Flew under the scrutiny demanded of large banks so as to play risky games, it seems.

More here. In more detail than I can fathom.
https://www.democraticunderground.com/100217719896

[Fiendish Thingy]

6. Sorry Schiff, no bailouts beyond FDIC max to depositors

Sure, the government can try to find a buyer for SVB, but if the bank folds, the 6,500 employees will have to go on unemployment, just like when a factory closes, or a tech firm lays off thousands (which has happened several times recently) and doesn’t get a taxpayer funded bailout.

That’s not going to cause a run on other banks- SVB’s specialty was raising and disbursing large amounts of venture capital to tech start ups. Their cash on hand fluctuated wildly. They lobbied congress hard to change the rules about cash liquidity, and, with the same information all the banks had about the feds planned interest hikes, gambled with their assets and lost.

SVB was not like George Bailey’s savings & loan.