Silicon Valley Bank

Undoubtedly, this will hurt. Based on what I have read, the snowball effect won’t be catastrophic but many will feel the pain.

If anyone has additional info on the downstream, please post.

 

First bank to be bailed out (actually the bank's depositors) by the FDIC since 2020.

 

I know this is wishful thinking, but I hope that any and all malfeasance is punished harshly.

 

Well, the CEO just happened to sell the bulk of his shares earlier this year...

 

I am not so sure there was any malfeasance per se, just bad business and no one holding the bank accountable for doing some of the exact same things that bankrupted big banks in 2008 and 2009.

Silicon Valley Bank shoots self in foot

 

In part, but crypto was a relatively small subset of SVB's business. Most of their business was with VC-backed tech and biotech firms.

 

You got too damn much money aging........
Time to offer succor to the poor, the downcast, the downtrodden.......

 

Yeah I'd imagine being heavily invested in "industry disrupting" startup "businesses" that never make any money isn't a great business choice when investment capital is no longer almost free.

They've surely more than accomplished their mission of enriching a few silicon valley good old boys by now though.

 

perhaps a big chunk of the VC money was from crypto gains that dried up and disappeared. seems odd that they have already decided to liquidate the assets.

 

But I'm sure they have a fabulous ESG score... Lol.

 

First domino to fall. More is coming, the tech industry is getting crushed with interest rates. Takes about a year for rates to catch up, and ironically it was about a year ago the fed started raising rates. We have a long way to go...

 

Below average, actually.

Company ESG Risk Rating - Sustainalytics

 

I have two clients who’ve been trying to pull funds from SVB this past week. Hopefully they will get something out today.

So who “buys” SVB …… Chase, Citi, BofA, Amazon, Google, Stripe, Comerica?


FDIC Creates a Deposit Insurance National Bank of Santa Clara to Protect Insured Depositors of Silicon Valley Bank, Santa Clara, California

 

I never really considered myself to be wealthy until Obama told me that not only was I wealthy but my company’s medical plan was a Cadillac plan that he taxed the shit out of so companies had to comply. Believe me, my premiums going up by 3X with a high deductible didnt hurt me anywhere near as much as it hurt our Hourly and Non Exempt workers

 

An email I just received. Employees may not be paid in a timely basis.


Dear Rippling Customer,

Yesterday afternoon, Rippling learned that Silicon Valley Bank (SVB) had solvency challenges. We have been working with SVB to ensure timely payments to our customers’ employees. However, this morning we learned that the FDIC had stepped in and taken control of SVB.

Rippling has historically relied on SVB to process payments for our payroll and other payments products. Thankfully, we had been working since last year to establish payments infrastructure with JP Morgan Chase & Co. (JPMC), and yesterday we completed that cutover. Any new payments initiated through Rippling will be processed through JPMC and will not be impacted by these events.

Unfortunately, payments in flight for today out of SVB have not yet been paid and some impacted employees will have received their usual pay stub notification email, despite this delay. SVB informed us this morning that this was an operational delay, and that funds would still be released by end of day today PST. However, given the FDIC’s involvement, there is a greater risk of non-completion of these payments.

Our top priority is to get our customers' employees paid as soon as possible, and we’re working diligently toward that through all available channels. In parallel, we are closely monitoring the FDIC takeover and what it means for today's payments.

You will receive an email today regarding updating your bank with the necessary details to ensure smooth continuation of payment services. The subject line of the email is, “You need to take action today to continue using Rippling.” Please ensure you complete this task with your bank(s) today.

Thank you for your understanding as we work diligently to complete delayed payments. Future payments through Rippling will not be impacted by this event, provided that your accounts have been updated as noted above.

We will provide another update as soon as possible for today’s payments.

Regards,

The Rippling Team

 

Big issue was they were swapping treasuries of longer expiration at lower rates for shorter expirations at higher rates. That caused them to take a big loss, evidently this is done often and is due to the huge upswing in rates.
CNBC was talking about it all day, typically a buyer comes in to stabilize the bank but I believe Peter Theel publicly told people to get your money out and it caused a huge run and exacerbated the issue.
Some are saying there will be a buyer before the weekend is out and that it doesn’t mean there is some systemic risk. (They finance a lot of tech start ups with little or now real assets.)

 

That's the public line at least for now. But, to an earlier poster's point and upon further reflection, it's probably no coincidence that Silvergate went down at the same time as SVB.

 

Isn't this an isolated case?

They were seized by the FDIC to protect clients accounts due to a run on assets spurred by their announcement that they intended to raise $1B to sure up their balance sheet. A balance sheet that took major losses by bad investments in Treasuries and Mortgage Backed securities.
However, as of Tuesday, the bank was well capitalized. The issue was the VC clients when on a panic run Thursday and withdrew $43B.

People are confusing their clients, whose money they held : VC groups, silicon valley start ups, etc...with the bad business practices of the bank itself. I understand how interest rates impacted their investments in variable yield vehicles, but I do not see how that relates to the tech sector in general??