Silicon Valley Bank

The shit-show that most of us have "woken" up to is that the Uber-wealthy (Net worth $10M++) have
Attorneys
Politicians
Auditors
that insulate most of the pain. Sure, they may not be able to spend 3 months at a French countryside mansion this year but their kids will still go to elite schools and once they graduate....rinse and repeat.

When I say most of us I mean the working class (defined as the 95% that pay a mortgage, have rent, struggle to pay bills, etc. even if earning a good wage, i.e > $100,000). Where I can agree with many of the Left is that this has been the way for many years for the lowest class but now with inflation and the loss of blue-collar jobs this is bubbling up to your local attorney, banker and Chamber of Commerce member. The seeds (Congress being able to trade on insider info, exempt from many laws that affect their constituents, and exposing of the seedy details of the elites) creates an anger and resulting kick back (Trump). IMO, this does not end well if not corrected. People are "mad as hell and are not going to take it anymore" and they are armed, not just with munitions, but with knowledge and skills (cyber) to disrupt what we consider "normal" life.

 

The thing none of you seem to get is this isn’t just about rich people. This is working capital of businesses that pay employees and flow through the economy.

What exactly does letting depositors funds evaporate accomplish that is good? Do we want to have regional banks? If bank runs are going to destroy depositors then companies will only use the biggest banks, or otherwise open dozens of bank accounts and shuffle cash back and forth to stay within the $250k limits. Is that a better state of the world? Is that the goal?

It is one thing for the bank and its share holders to go bust. They are the owners, they are taking risks and are accountable. It’s quite another to penalize depositors when bank runs happen.

It just seems to me you and City are upset with the inequities of capitalism and the human condition in general, and want to randomly take out a pound of flesh as a form of retribution. The sad thing is if we just allow a bunch of banks to fail, the economy will crash and all those people you worry about will suffer.

 

It is about rich people, their losses are socialized and their gains are privatized that’s the the way this country works. They know it, and act accordingly. But they blow smoke up everyone‘s asses with libertarian bullshit about not needing regulation or taking handouts. Why does capitalism always need bailouts to not destroy the economy? This is not a good system.

 

What's a bank run? The 10 moves that led to SVB's demise | CNN Business

 

Bailing out banks that made bad decisions isn't capitalism.

 

Gov lobbies for bailout with undisclosed monies in said bank...what a country!

 

Capitalism cant exist without the state (and the capitalist state cant exist without capital markets), so its definitely the state's 'job' to bail them out. This is how capitalism functions, the people that are like "you can let the economy" fail do have a point! Failure, financial ruin and not being bailed out is for workers and such, those are the only people a capitalist state needs to discipline, you cant generate capital without them, this type of thing is another way of demonstrating who's boss and who has the power.

 

I agree with what you are stating but none of that is capitalism. That’s all crony. Letting them fail hurts the little guy for sure but if they do fail people rich and poor change their decision making. I 100% agree the people that run these places know the precedent has been set that they won’t be allowed to ‘fail’. Only way to change that is to start letting these business and even institutions fail and fail hard….but thats a long play. And long plays don’t win short term elections

 

Man Americans are so horny for capitalism that even when it fails spectacularly they are like "we just need more of it, but better and I dont mind if I lose my shirt too." Maybe you can figure out a way where wealth doesnt buy you political influence and regulatory capture and these transactional relationships dont work. Even when we pass regulations, they are weakened soon after or corrupt politicians exempt institutions they have vested interests in. The USA has functioned this way the entire time it has existed, if you dont like so-called "crony" capitalism, you picked the wrong country to live in!

 

If we are looking at it like 2008-2009, *nobody* wins if you let that all play out. Small businesses aren’t parking their money in treasuries, they are in banks. These aren’t all rich guys. The failed bank CEO’s and employees should be the ones to pay, not people who simply have deposits.

Now it’s not unreasonable for institutional holders to take a haircut. Morally, they absolutely should. SVB shareholders are wiped out. That’s a lot of wealth wiped out. That is capitalism taking its pound of flesh. I don’t think it’s unreasonable to protect depositors, as we are seeing, it may even be necessary at this point.

 

i agree with you. If I’m being honest it’s not on the depositors that the bank made terrible decisions and they should be made whole.

 

What the bleep FDIC for? Small businesses for the most part don't have more than 250k in a bank somewhere and if they do, well kinda shame on them if they don't follow the rules. SVB uninsured bailout is purely political.

 

Markets gonna be a bloodbath today.

 

The fact that it wasn’t just a single bank should make it obvious it’s not just political for SVB. Something like 40 banks triggered circuit breakers. It was nipping a banking crisis in the bud.

I assume todays issue is triggered by Credit Suisse? That’s been a problem if not criminal bank for a long time. No tears should be shed for them, but it’s obviously bad (albeit not entirely disconnected) timing to have them collapse.

 

The fact that craploads of super wealthy dem donors have money in SVB means nothing...sure thing.

 

Republican megadonor Peter Thiel is the guy that started the bank run, the idea that this stuff happens because of political preference is basically why they can keep getting away with it. People end up talking about how the bank was "too woke" rather than you know, the real reasons it failed.

 

Just one question. What is the more logical explanation for the failure of SVB, "wokeness" or incompetent financial management combined with the reduction of federal oversight attributable to the decision of the Trump Administration and the Republican Congress to lift the Dodd-Frank oversight of SVB and similar sized banks in 2018?.
Be serious, conservatives. ‘Wokeness’ didn’t cause Silicon Valley Bank’s demise | Tayo Bero

 

Here's a link addressing the role of Thiel and his Founder's Fund in the collapse of SVB.
Thiel’s Founders Fund Withdrew Millions From Silicon Valley Bank

 

don’t disagree on keeping peoples eyes off the ball. What is your best guess / hypothesis as to why it failed ?