**When will Too Big To Jail kick in? My first bet is the Fed will bankstop SVB to bail out some of the most egregious sociopaths in America. It sounds like they will get all their money back, just not now. "Here’s $250,000. That other $300 Million? Yeah, we’ll get back to you . . . eventually.
I sure hope the Feds look into all the crypto rug pulls these guys were behind and how they hid their $USD from cash-outs and buy-ins at $SIVB, but I won’t hold my breath.**
From Barron’s: It’s fallen on hard times since then. SVB’s stock has dropped more than 80% from its record high in late 2021 as interest rates have increased, boosting the cost of the deposits the bank uses to fund loans. The company in its press release on Wednesday said its latest actions were partly due to expectations for a continued higher interest-rate environment and partly because deposit levels have declined.
Given the current volatile economic environment, venture-capital firms have been less willing to fund start-ups—a problem for SVB, which gets deposits from VC-backed start-ups that were earlier flush with cash. As of Feb. 28, SVB had client funds of $326 billion, a decline from $341 billion at the end of last year.
“What we learned over the last 12 to 24 months is that in a fast-paced rising rate environment, customer deposit dynamics are different than what we had expected,” said Chief Financial Officer Daniel Beck in a conference call with
Yessir, bail the whales! From Saul’s board (and this Barron’s article above) it looks like everyone will come out smelling like a rose, except $SIVB. Unless we find crypto shenanigan loans to other unscrupulous Silicon Valley types. (No, I am not suggesting $BILL has any dealings with crypto. They just used $SIVB as a “processor” along with other banks. It’s the bums like Thiel who have snookered so many young investors through misspent crypto deposits and dispersals. These guys always win.
Startups should get some money this coming Monday, but we shall see what’s what among all the rendering of rich people’s garments on Twitter this coming week. The vitriol on display leaves me to believe certain VCs shorted $SIVB this past Friday. Boy will they probably regret the move once $SIVB begins payouts. The crypto crowd is busy trying to figure out who will fall next in crypto land. (On Twitter it’s name-calling with the biggest Mentors pulling old posts (talking about you Rug Pal or Raoul Pal.) Good. We need to flush about 99% of alt-coins and tokens.
Startup founders are beginning to worry about whether they’ll be able to keep paying employees following the failure of Silicon Valley Bank.
Payroll service provider Rippling notified customers on Friday that some processing had stalled because SVB helped handle its payments. The company, a startup itself, switched to JPMorgan Chase, but not soon enough: Paychecks were already “in flight” with SVB and have yet to be paid out — and the firm is still trying to understand what the bank’s collapse on Friday will mean for them, Rippling Chief Executive Officer Parker Conrad said in a Twitter post.
And now a long form piece (at least for their website) from CNBC. But I just know Matt Levine is burning the midnight oil for a piece in Bloomberg this Monday which will better explain the craziness and what more is out there in this new contagion.
p.s. I just laid a post that the rumor tonight on Twitter is $FHN is in trouble. I posted the chart too. Still trying to find a good article explaining the stress at that bank.
I don’t know where that guy stands politically… doesn’t matter because there are idiots all along the spectrum from one end to the other and points in between. But… isn’t it disheartening to think that folks like that… vote? sigh…
Rob
He is no fool who gives what he cannot keep to gain what he cannot lose.
