The Demise of Silicon Valley Bank

Scott Gallow makes good points here

California is headed for years of agricultural profit, thanks to record rainfall. That’s why Elon moved headquarters back to Cali.

I haven't even heard of that bank before this weekend, and I live in California.

Sound like a top 1% problem to me.

It doesn't matter, really none it matters, the government will bail them out. If we learned anything over the past 20-30 years is that IF you are big enough and connected enough, the rules that small business have to play by do not apply to you.

Privatize the profits, and socialize the losses. It's a helluva business plan if you can swing it.

the bank was not bailed out. Its stock went to zero and all its assets were taken over.

Not bailed out.

Ag accounts for about 1.5% of CA economy. Even if it were to double, it wouldn’t overcome coming declines in the financial and real estate sectors that comprise close to 20% of the state’s economy.

California has a narrow state income tax base. A mere 500,000 taxpayers comprise half of the state's income tax revenue. Silicon Valley and stock values make up a large fraction of income of this 500,000.

The budget is more cyclical than is optimal.

This article was written a couple months ago. Now think about it’s predictions in light of the SVB fiasco:

latimes.com

Op-Ed: California’s budget surplus has vanished and its economy is in danger. It can go one of two ways

The state can’t continue to rely on the tax revenues generated by tech, media and ever-rising property prices. But there are ways to turn painful realities to California’s advantage.

Open link

What does it say?

but they did bail out all of those who didn't take the FDIC $250K insurance seriously

imagine you're insured for 100k/300k/100k on your vehicle, but then you get an accident and the insurance firm agrees to pay out $100 million

government needs to remove the $250K insurance bs and just say everything is guaranteed to infinity since that is their actual stance

These things are treated as one off isolated cases until more than one bank failure per month.

* Nick Leeson, Bank of England, circa 1992.

* Orange County, CA bankruptcy, circa 1994.

* Long Term Capital Management, circa, 1998.

Over 99% of you did not know it real time, but almost all the large N.Y.S.E. investment firms were firing more men & women than they were hiring from 2nd or 3rd quarter, 2005. [Ignore what they say. Watch what they do!]

If I recall, Bear Sterns was the last one everyone in charge in government and their media partners were able to say, Just a one off.

Fascinating, please tell us about Biden’s role in setting the HR policies of a limited company in the UK?

I’m eager learn from your expertise in this area because I was under the impression that the Fed is an independent agency operating under the supervision of Congress. But isn’t it true that woke President Trump appointed the current woke Fed chairman Jerome Powell? So confusing.

Burry's reaction:

2000, 2008, 2023, it is always the same. People full of hubris and greed take stupid risks, and fail. Money is then printed. Because it works so well.

Just as a shark must keep swimming to survive, some businesses must keep generating revenue to avoid sinking into financial losses.
The crypto crash just keeps getting worse, from FTX to Celcius and Luna/UST. Silicon valley bank had to shutdown their Crypto Exchange Network. About a week ago, they raised concern that their finances are struggling which led to a bankrun. Going from 13bn worth of assets in dec 2022 to crumbling. While the general public are still struggling with getting their money out, there are still crypto analysts and recovery experts helping users recover money of those directly affected. Don't waste time and contact me if you need help from these recovery experts, your funds can still be accessed but not for very long. Chelseamathers852 {at} gmail, com

Not yet. But none of them will lose anything. They'll be taken care of. Assuming they donated to the "right" people.

Hoping the failures are swift, creepy Joe gets sucked into a bunch of back alley handshake deals that blow up in the adminstrations face.

I'm in CA and somewhat financially aware, hadn't heard of it either before Friday. So weird.

They'll never outright say "everything is insured," even though that's what they're doing in practice. This would change how the FDIC works and their current stance gives them more flexibility. I'm not convinced that they would bail out depositors in a bank that doesn't have a ton of connections to VCs/rich people.