Silicon Valley Bank

Don't know what credit cards u reference, but the average consumer's credit card rate was not even close to 5 % prior to the Fed starting rate increases , more like 14-15%.

 

You know that he is not being accused of having money in the bank, right?

I realize that it looks like he broke the law, and I am not disputing that, but can we at least keep straight what he actually did or did not do to get into trouble?

Gavin Newsom's ties to Silicon Valley Bank raise questions

 

Even if Thiel did start the bank run, wasn't he really the one person doing what he is obligated to do here? His fund started experiencing problems with transfers into SVB. He looked into it and became alarmed enoough withdrawl all of his Fund's money. He then warned all of the start ups that his VC fund works with that something was wrong at SVB and they needed to get their money now.

I do not know bank rule or laws, but seems to me, he was the only one acting responsibly here, regardless of whether or not that led to a bank run??

 

Yes and no.

It seems his analysis of the bank was correct. Yet, he’s in a pretty unique position, in terms of almost single handedly kicking off an actual bank run. Not many customers of any bank have that ability, he’s essentially an institutional client.

That being said, unless he had material inside/non-public information there was probably nothing illegal about his call. He acted in his self interest and his concerns proved valid. If he did have non-public info, I suspect that would be a different matter (legally).

 

Yeah I'd like to know too. A credit card with 5% interest? Where does one get one of those? Most are like 3 times that!

 

Saudi National Bank is the largest shareholder (10%) in credit suisse fwiw.

 

Anyone buying FRC at $35?

 

I read the letter from the CEO on Sunday. While I would not take you up on investing in FRC at $35, I do not believe that they are in the same boat as SVB.

 

Two charts that show why the carrying value of SVB's long-term treasuries declined in value. The cost of the ridiculously low interest rates over the last 14+ years are now "coming home to roost".

 

Too big to fail is the norm now. If you bank with the big fish, your money is safe. Smaller community banks? Not so much.

 

Beat me to it...damn, this should give everyone the warm fuzzies.

 

Agree. Although maybe some cards offered low promotional teaser rates I don't recall a credit card that ever had a regular interest rate anywhere near 5%. I might add that personally I don't really care about credit card interest rates since I can and do pay my balance in full every month.

 

The whole saga is very bizarre and quite scary. So now all of the sudden, the FDIC is going to insure bank deposits up to infinity $$$… as long as you bank at a bank the Feds consider a “systemic risk”. We’re getting into some murky waters. Oh yeah and when the big banks fail, the smaller banks who did it right will be the ones covering the tab.

 

“Anyone who doubted how detrimental Trump administration policies would be should analyze the damage unfolding for those trampled by Silicon Valley Bank’s collapse. On May 24, 2018, Trump signed into law the Economic Growth, Regulatory Relief and Consumer Protection Act (the “Reform Act”). This was a regulatory relief bill for regional and community bill, which bank lobbyists and numerous politicians had fought hard for.

Thanks to Trump and his supporters this all changed. Some of the key changes that EGRRCPA made were:

• Increasing the asset threshold for “systemically important financial institutions” or, “SIFIs,” from $50 billion to $250 billion.
• Immediately exempting bank holding companies with less than $100 billion in assets from enhanced prudential standards imposed on SIFIs under Section 165 of the Dodd-Frank Act (including but not limited to resolution planning and enhanced liquidity and risk management requirements).
• Exempting bank holding companies with between $100 billion and $250 billion in assets from the enhanced prudential standards.
• Limiting stress testing conducted by the Federal Reserve to banks and bank holding companies with $100 billion or more in assets.”

How Trump’s Deregulation Sowed The Seeds For Silicon Valley Bank’s Demise