Silicon Valley Bank

Barney was probably just there for the BOD fees, like most board members. He and Mark Cuban would be better off just keeping quiet.

I find it surprising that federally insured banks are allowed to invest in anything related to crypto currencies to begin with.

 

The author may be correct regarding his liquidity/insolvency/$250K cap comments. However, that first sentence of the next to last paragraph is just nonsense. The author must not understand what interest rate risk is.

The risk was very foreseeable and that is exactly what a risk manager is supposed to be in place for. Banks are supposed to have in place risk models that gauge the impact from a sharp spike in interest rates. Like it or not the rise in rates was telegraphed by the Fed and didn't just occur over night. Blaming the Fed for poor bank management is BS.

 

We have to pick a side and blame. It can’t just be that the bank made bad business decisions.

 

So its woke broke the bank? What an utter moron.

 

'Absolutely idiotic'. SVB insider says employees are angry with CEO | CNN Business

 

every bank is evaluated for it. I bad management of interest rates risk is just another factor, like bad loans, in a failure

 

Yep, fresh out of UF, I worked in banking for 15 years.

No different than aggressive lending.

 

This is still funny.

 

It is remarkable but when you think about it is isn’t. It was probably a couple of months ago on a podcast a person said that something like this would happen - that the primary danger of rate hikes wasn’t the obvious economic impact, but would be the second order affects of high interest rates and high debt service.

If you think about it, the process of raising interest rates always seems to have modest impacts but then something pops. In 2000 the stock market bubble bursted. In 2007 investment banks went under as some of the junk they were peddling went bust. This time banks with have runs. The process of raising rates is never a clean linear/smooth function in terms of moderating growth.

 

Is this the process being proposed?
the fed guarantees the bank owned bonds and buys them back at full face value and saves the interest. 2% for discussion

fed funds purchase with new debt of similar duration at 5% for discussion

Fed charges bank insurance for the 3% loss and bank insurance goes up to cover that cost.

Is that the deal being proposed?

 

It appears republicans are doubling down on the SVB=woke bank>>bank fail theory.

Tucker Carlson, Fox Blames ‘Wokeness’ for Silicon Valley Bank Collapse – Rolling Stone

 

Of course they are. Hard to engage in any kind of discourse with people that are completely full of shit.

 

Congressional zoom call last night. SVB and NY bank that failed will be made whole. Rich people are saved.

https://www.tiktok.com/t/ZTR7ktNmm/

 

Woke is the socially accepted catch-all code word (among the DeSantises and other like-minded white folks) for racism.

For those here who didn't know.

 

PolitiFact - Was Silicon Valley Bank demise caused by Trump easing regulation, 'woke' efforts, or something else?

 

America does function quite well for those people, shame about everyone else

 

Here's a video that explains in great detail what happened at SVB...

 

Most of their deposits came from companies that had a lot of money (SPAC or VC) but little in the way of profits. That's what they catered to. And when the investment money stopped coming in, companies burned through their cash and needed their deposits. SVB was forced to liquidate their long term, low interest treasuries at a loss to cover the deposits. When the $2B loss was announced, the run started.

From April of 2022 to January of 2023, SVB did not have a risk management chief.

From your link:

 

Since noone is talking about it, I want to put this out there on the heels of your post.

Yellen is a disaster. Sarah Bloom Raskin is not far behind.

This is not a criticism of Yellen's knowledge or policies. Sure, she was a "dove" on the reserve board. But even the doviest reserve board member is a fiscal hawk by political appointee standards.

A Federal Reserve Board Chairman should never, ever be appointed as the Treasury Secretary.

Raskin is both sides of the revolving door. She was on the Board of Governors, then Deputy Secretary of the Treasury, now reappointed to the Board. Obviously she is qualified. Independent she is not.

This destroys the premise of an independent Fed. Board members' decisions in the future will forever be varnished by their potential careers in the Cabinet, and vice versa.

The Banking Act of 1935 addressed this relationship removing the Treasury Sec from the Board.

The tightening of the money supply to fix inflation can only do so much if the Board of Governors has no street cred with the banks and investors.