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+--- Thread: Silicon Valley Bank’s collapse & Signature Bank (/showthread.php?tid=275514)
Silicon Valley Bank’s collapse & Signature Bank - Fritz - 03-13-2023
2008 again or ...
Re: Silicon Valley Bank’s collapse & Signature Bank - Acer - 03-13-2023
One bank was loaning heavily into tech start-ups, the other was in Crypto. It's no Lehman Brothers.
*whistles past the graveyard*
Re: Silicon Valley Bank’s collapse & Signature Bank - Buzz - 03-13-2023
2008 was predicated on Junk Bonds that **NEVER** should have been created in the first place, much less allowed to have been purchased by Federally Insured financial institutions. The idiot execs at those institutions should have been neutered and quartered for even thinking about purchasing that crap.
In contrast, SVB invested in US Treasuries, and got caught in an interest rate squeeze that the Fed, in large part, created to combat rising inflation. So now, all the Fed is doing, is loaning SVB and SigBank money based on the FACE VALUE of their US Treasuries, rather than the lower market value caused by the current interest rate squeeze.
Way, way, way different scenario.
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Re: Silicon Valley Bank’s collapse & Signature Bank - gabester - 03-13-2023
There's little systemic risk here but there may be ripples that create additional discontinuities... e.g. if the startups can't access their funds or the VCs can't transfer to them or the tech workers don't get paid we could see a regional slowdown... which could dull California's economy overall, and could couple with other unexpected events.
By itself SVB and Signature are just failures. Imagine if we'd canceled the FDIC and Federal Reserve like some people say they want to do... it'd be the wild west all over again.
Re: Silicon Valley Bank’s collapse & Signature Bank - SteveG - 03-13-2023
Roku, which manufactures streaming devices, disclosed it had more than a quarter of its cash — nearly half a billion dollars — deposited with SVB.
-Politico
Re: Silicon Valley Bank’s collapse & Signature Bank - ztirffritz - 03-13-2023
If a bank collapses and that bank primarily supports startup companies developing/selling products/services that don't actually exist yet...not many people will notice directly or care. It might ripple through the rest of the markets as wealthy investors raise prices on other products/services to cover their losses...but most of us just won't notice. Lehman was big because it rippled through ALL of the markets and caused almost immediate cascading failures.
Re: Silicon Valley Bank’s collapse & Signature Bank - Fritz - 03-13-2023
hoping you're all right.
For some reason, I have a distrust of financial institutions.
Re: Silicon Valley Bank’s collapse & Signature Bank - M A V I C - 03-13-2023
Acer wrote:
One bank was loaning heavily into tech start-ups, the other was in Crypto. It's no Lehman Brothers.
*whistles past the graveyard*
One of the SVB c-level execs was an exec at Lehman Brothers in 2008.
The issue in this case has nothing to do with loaning heavily into tech startups or crypto. The issue was they put too much of their money into investments that were too conservative.
Re: Silicon Valley Bank’s collapse & Signature Bank - Tiangou - 03-13-2023
The issue is that the regs passed after the 2008 debacle were all tossed out under the last administration and nobody’s watching the henhouse anymore.
Had they been required to do annual audits and stress tests, they’d have been caught by regulators ages ago.
Re: Silicon Valley Bank’s collapse & Signature Bank - NewtonMP2100 - 03-13-2023
……also didn’t someone pull back on bank regulation [ this person is orange ]…..??