They really catered to the startup crowd. Think about it this way. If a startup banked with Chase or Bank of America, their customer service and treatment wouldn't be all that different than the treatment I would get as a regular consumer with a standard deposit account. SVB on the other hand made an effort to provide higher levels of customer service for startups. A startup with $2,000,000 in cash got infinitely better treatment with SVB than with a larger mega bank. This is also why people in general bank with regional banks. You just tend to get better service. Also when applying for things like lines of credit and other forms of debt, you're more likely to get what you need with a bank like SVB. And considering how critical debt is for early startups, it made sense to go with SVB Also SVB had built relationships across the VC world in the Bay Area so a lot of VCs just recommended SVB to all of the startups they invested in. Lastly, SVB did have a wealth management business that focused on the 1% in Silicon Valley. And much of wealth management also boils down to relationships and SVB had ties to everyone in the Bay Area so they picked up a ton of wealth management business.
They were willing to give credit and accounts to tech startups that other banks weren't. Basically it. There's a complicated explanation of why they would and why other banks wouldn't, but in a nutshell these VCs and angel investors could launch startups with accounts there that they couldn't get elsewhere.
When cheap money gets more expensive, poorly managed capital gets washed out. Tech layoffs should have been a bigger red flag is the bouquet of red flags. The contagion is just now getting started.
this has literally nothing to do with tech industry. This is entirely about a bank putting money in long term investments that got upended by fast rising interest rates. the bank itself had plenty of assets, they were just parked somewhere they couldn’t access in time. Their problem isn’t about tech.
These right wingers are so naive man there's no point in debating them. I've given up long time ago. Not worth the energy. Dumb as dirt.
It's not clear to me why this is a right wing / left wing thing. Is it just about tying this to Biden somehow so it has to be a referendum on some left wing "tech industry?" WTF?
Are you not reading the thread where they're blaming "woke policies" as the reason the bank failed. Their brains are rotten. Folks can't grasp the concept that it's corporate America vs us. These folks get caught up in the culture war garbage
LOL No i did not see that. Good grief. The bank was invested in traditionally very safe options. Unfortunately they bought ones with too long of maturity dates. With rising interest rates, their value got killed. A run on their bank happens and they can't cash out their investments to pay. Poof. Nothing to do with wokeness or politics. They just bet on a long term safe investment that suddenly became hard to move. Bad bet. However, if there had been no run they would have been fine. They had the assets. At maturity date they would have been worth everything they needed them to be worth.
Open your eyes. This is why we can't ever accomplish anything in this damn country. Corporate america has bought out media ad slots which forces the media to blame "woke culture war" garbage instead of exposing real issues which are Corporate greed and bad governance. It's so tiresome you eventually give up. This hits your point.
When people would discuss yield farming on crypto sites like FTX and voyager, I would ask them where that yield came from. Naturally they did not know and did not like the answer I provided them. It was a ponzi. And I had been around in the space long enough to know bright skies turn very dark in seconds. When a bank is aggressively lending and going further out on the risk curve than other banks, questions should be asked by those who deposting tens of millions+. It doesn't matter if the collateral was not accessible in a timely manner. The fact remains bright skies turn very dark in seconds. Margin calls happen at the most inopportune times. And this bank was poorly defended on several fronts. The Fed has stated over and over they would continue to raise rates until bad things happened. This was no secret so rising rates is really not an excuse. The contagion is not covered because the loans that probably shouldn't have been granted no longer have a means to get future lending if the capital is not productive. Commercial banks will tighten further going forward thus making loans harder to get. Tech is extremely bloated. Companies who are struggling to operate in the green are going to get hammered. SVB is a symptom, not a problem.
No loans went bad. The risk they took was betting on conservative securities. tech may have problems but this has nothing to do with that industry. You also don’t understand the investments they were in. They put money in places with maturity dates, they bought before interest rates spiked. Once they did, they couldn’t sell them and they couldn’t get out of them. the better right wing talking point here would be to blame democrats for inflation causing rising interest rates and killing the bank.
Reading this thread is a hilarious exercise. astros123 trying so hard to explain this sh-t to people, getting pissed that people are stupid. ATW occasionally chiming in substance, but really here to poke astros123 and asking him why he so mad Tinman adding absolutely nothing of value, but still manages to generate a high volume of posts about wokeness when it has nothing to do with this. spaceghost seems to be trying to discuss this in good faith, right or wrong. justtxyank comes in with low volume high value posts, just like when he posted in GARM regularly back in the day. commodore freaking me out in this thread by posting actual facts and making sense, which has me reconsidering my assessment that he is an imbecile (as it relates to D and D topics).
Wokeness has everything to do with this The employees of these start up’s were too woke @Salvy So they couldn’t do any work because they were constantly being victimized by themselves
I understand they took on these very conservative securities such as MBS. They are the gold standard for collateral and SVB went heavy on these securities which allowed them to go further out on the risk curve. As long as they can provide liquidity to their depositors, they are in great standing. These securities are great for insurance companies. They couldn't sell them because they would have had to back stop with some other form of collateral and take a loss they could not have afforded. It was better to hold them in hopes there would not be something like a bank run. What SVB should have been doing is diversifying out of these particular securities and tighten their lending policy a long time ago. Instead of hedging their risk, they went all in. They were not overwhelmed with bad loans, if any at all. They simply lacked easy liquidable collateral that was not as profitable in exchange for illiquidable collateral that was much more profitable.... until it wasn't due to rate hikes and the bond market taking a dump. Putting my conspiracy theory hat on, I believe Theil encouraged the bank run intentionally.
