The complaints of inflation are insane.

[Kaitzilla]

The USA's 16th largest bank, a venture capital lender named Silicon Valley Bank, has been shuttered with the FDIC stepping in.

Silicon Valley Bank's struggles spell further trouble for beleaguered tech startup market

Silicon Valley Bank's crisis is due to the challenges faced by its clients, though the problems could now get worse.

www.cnbc.com

Apparently they couldn't withstand rising interest rates.

Everyone is holding their breath a bit I think.

Silicon Valley Bank is shut down by regulators in biggest bank failure since global financial crisis

The tech-focused bank was closed by regulators on Friday after attempts to raise more capital failed.

www.cnbc.com

Financial regulators have closed Silicon Valley Bank
and taken control of its deposits, the Federal Deposit Insurance Corp. announced Friday, in what is the largest U.S. bank failure since the Global Financial Crisis more than a decade ago.

The collapse of SVB, a key player in the tech and venture capital community, leaves companies and wealthy individuals largely unsure of what will happen to their money.

**Edit**
The much smaller crypto bank Silvergate failed a few days ago too.

 

[Lexicus]

The USA's 16th largest bank, a venture capital lender named Silicon Valley Bank, has been shuttered with the FDIC stepping in.

Silicon Valley Bank's struggles spell further trouble for beleaguered tech startup market

Silicon Valley Bank's crisis is due to the challenges faced by its clients, though the problems could now get worse.

www.cnbc.com

Apparently they couldn't withstand rising interest rates.

Everyone is holding their breath a bit I think.

Silicon Valley Bank is shut down by regulators in biggest bank failure since global financial crisis

The tech-focused bank was closed by regulators on Friday after attempts to raise more capital failed.

www.cnbc.com

Excellent, I support the government taking over banks on principle

 

[Bestbank Tiger]

Too bad it wasn't Wells Fargo:

Wells Fargo Customers Report Missed Paychecks Due To Apparent Glitch

There’s no indication the problem is connected in any way to Thursday’s bank stock crash, sparked by Silicon Valley Bank’s collapse.

www.forbes.com

 

[danjuno]

Excellent, I support the government taking over banks on principle

Already there's discussion of a bailout like 2008. If taxpayers are expects to give their money to these clowns, at least they should get a controlling stake for their money.

 

[Birdjaguar]

Deposits up to $250,000 are insured. Over that and you might well be screwed. Venture capitalists with big holdings there may be in trouble. Oh well, they are risk takers....

 

[Lexicus]

Oh well, they are risk takers....

This bailout stuff is ridiculous because this is how they justify their great wealth. If there was no chance of losing it they didn't take a risk.

 

[RobAnybody]

"Too Big To Fail" is a terrible concept. I accept "we" allowed it to happen out of ignorance/incompetence once, & then had to deal with consequences as a society (I do not accept that there were virtually no consequences to those who caused the failure - that was a travesty). This is not that, however.

This is one Bank that... just failed. And that's fine. As long as the FDIC is protecting the "regular" people, as it is (see /\ Bird's post above), I'm fine with this one bank going down due to their own mis-management. If your whole MO is being a Venture Capital Based Bank, well, more power to you, I guess, but failing is the risk you take. I don't think (hope really) that it has any implication for what I'd characterize as "normal" banks. There should be no bailouts (other than the FDIC stuff of course).

EDIT: that wasn't addressed to anyone in particular, just my take on this situation

 

[Bestbank Tiger]

As long as the FDIC is protecting the "regular" people, as it is (see /\ Bird's post above), I'm fine with this one bank going down due to their own mis-management.

Agree. Bail out the depositors and let the bank fail.

 

[danjuno]

Capitalists? Actually having to accept the consequences of their mistakes? Surely you jest!

 

[Birdjaguar]

 

[RobAnybody]

I don't know that I should enjoy such things - i suppose it it reflects poorly on my character that I do, but I like seeing that graph.

 

[Kaitzilla]

The USA's 16th largest bank, a venture capital lender named Silicon Valley Bank, has been shuttered with the FDIC stepping in.

Silicon Valley Bank's struggles spell further trouble for beleaguered tech startup market

Silicon Valley Bank's crisis is due to the challenges faced by its clients, though the problems could now get worse.

www.cnbc.com

Apparently they couldn't withstand rising interest rates.

Everyone is holding their breath a bit I think.

Silicon Valley Bank is shut down by regulators in biggest bank failure since global financial crisis

The tech-focused bank was closed by regulators on Friday after attempts to raise more capital failed.

www.cnbc.com

**Edit**
The much smaller crypto bank Silvergate failed a few days ago too.

The New York Times story about the Silicon Valley Bank failure has come out.

Banking Turmoil: What We Know

Regulators trying to stem panic among customers shut down Silicon Valley Bank and Signature Bank within days.

www.nytimes.com

Flush with cash from high-flying start-ups, Silicon Valley Bank bought huge amounts of bonds more than a year ago. Like other banks, Silicon Valley Bank kept a small amount of the deposits on hand and invested the rest with the hope of earning a return.

That had worked well until the Federal Reserve began raising interest rates last year to cool inflation. At the same time, start-up funding started to dry up, putting pressure on many of the bank’s clients — who then began to withdraw their money. To pay those requests, Silicon Valley Bank was forced to sell off some of its investments at a time when their value had declined. In its surprise disclosure on Wednesday, the bank said it had lost nearly $2 billion.

Bailout or buyout should come by Monday.
If not, every bank that is not a huge bank will be in trouble.

Anyone who had hundreds of millions of dollars in that bank can get most/all ot it back in umm, months?
Lots of taking out loans to make payroll right now.

Anyone under $250,000 will get a check from the FDIC very soon I think.

Hundreds of startups face a crippling cash crunch and an 'extinction-level event' if no one buys Silicon Valley Bank by Monday

Silicon Valley Bank's collapse has left hundreds of startups facing a cash crunch and payroll crisis. A popular toy store held a 40% off sale to raise

www.businessinsider.nl

"We literally have no way of paying employees right now," Flow Health CEO Alex Meshkin told Insider.
Some startups took drastic steps on Friday to try and bring cash in. The popular toy store Camp told its customers it was in distress after its funds got trapped by the collapse.
"All of our cash was at SVB and we are trying to build up our balance at Chase," Camp CEO and cofounder Ben Kaufman told Insider via Twitter direct message.
The company announced a 40% off sale in a bid to raise cash from its customers, instructing them to use the tongue-in-cheek code 'BANKRUN' at the checkout.

The ripple effects of SVB's demise are likely to be extensive. According to its website, the bank supported nearly half of US venture-backed startups at the end of December.
In a tweet, startup accelerator Y Combinator's CEO Garry Tan said SVB's collapse was "an *extinction level event* for startups and will set startups and innovation back by 10 years or more."
He told The Wall Street Journal that a survey Friday of its 3,000-odd active companies found almost 400 had a relationship with SVB and more than 100 feared they couldn't make payroll in the next 30 days unless the situation was swiftly resolved. Tan urged people to contact their member of Congress to voice their concern.

 

[RobAnybody]

I appreciate the added information, but "the bank supported nearly half of US venture-backed startups at the end of December" (your bolding, nothing disparaging meant, just saying it wasn't mine), doesn't mean a lot. Most normal banks don't do that, as evidenced by the fact that they alone did it for "nearly half". They were a special case, with a unique business model. Which just... turned out to be dumb. Meaning it has no relevance (IMO) to "normal" banks.

 

[Kaitzilla]

I appreciate the added information, but "the bank supported nearly half of US venture-backed startups at the end of December" (your bolding, nothing disparaging meant, just saying it wasn't mine), doesn't mean a lot. Most normal banks don't do that, as evidenced by the fact that they alone did it for "nearly half". They were a special case, with a unique business model. Which just... turned out to be dumb. Meaning it has no relevance (IMO) to "normal" banks.

Someone with money in a small bank or has some of their stock has to be wondering right now just a bit though.

If the buyout or bailout comes, all will be well.

 

[EnglishEdward]

It is causing a problem in the UK too:

Government to meet tech firms following collapse of Silicon Valley Bank UK

Industry leaders expected to call for state intervention to avoid failure of hundreds of UK firms

www.theguardian.com

 

[Kaitzilla]

It is now Sunday night and things are starting to move.

US government moves to stop potential banking crisis

The U.S. government took extraordinary steps Sunday to stop a potential banking crisis after the historic failure of Silicon Valley Bank, assuring depositors at the failed financial institution that they would be able to access all of their money quickly.

apnews.com

NEW YORK (AP) — The U.S. government took extraordinary steps Sunday to stop a potential banking crisis after the historic failure of Silicon Valley Bank, assuring all depositors at the failed institution that they could access all their money quickly, even as another major bank was shut down.
The announcement came amid fears that the factors that caused the Santa Clara, California-based bank to fail could spread, and only hours before trading began in Asia.

Regulators had worked all weekend to try to find a buyer for the bank, which was the second-largest bank failure in history.
Those efforts appeared to have failed Sunday.

No buyer, hmm.

In a sign of how fast the financial bleeding was occurring, regulators announced that New York-based Signature Bank had also failed and was being seized on Sunday.
At more than $110 billion in assets, Signature Bank is the third-largest bank failure in U.S. history.

Oh no, another bank went boom!

In an effort to shore up confidence in the banking system, the Treasury Department, Federal Reserve and FDIC said Sunday that all Silicon Valley Bank clients would be protected and able to access their money.
They also announced steps that are intended to protect the bank’s customers and prevent additional bank runs.

“This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth,” the agencies said in a joint statement.
Under the plan, depositors at Silicon Valley Bank and Signature Bank, including those whose holdings exceed the $250,000 insurance limit, will be able to access their money on Monday.

In a separate move, the Federal Reserve late Sunday announced an expansive emergency lending program that’s intended to prevent a wave of bank runs that would threaten the stability of the banking system and the economy as a whole.
Fed officials characterized the program as akin to what central banks have done for many decades: Lend freely to the banking system so that customers would be confident that they could access their accounts whenever needed.

The lending facility will allow banks that need to raise cash to pay depositors to borrow that money from the Fed, rather than having to sell Treasuries and other securities to raise the money. Silicon Valley Bank had been forced to dump some of its Treasuries at at a loss to fund its customers’ withdrawals. Under the Fed’s new program, banks can post those securities as collateral and borrow from the emergency facility.

The Treasury has set aside $25 billion to offset any losses incurred under the Fed’s emergency lending facility. Fed officials said, however, that they do not expect to have to use any of that money, given that the securities posted as collateral have a very low risk of default.

Ahh, there we go.
Now banks won't have to sell their low interest bonds at market rates if they need to raise cash for depositer withdrawals.
They can get full price from the people with the printing press.
Woops, they can just borrow from the Fed directly with the low-interest bonds as collateral, nevermind.


The forced selling of low interest bonds at market rates is a pretty large problem for banks right now if their customers take all their money out.

MSN

The higher the Fed raises interest rates, the larger the $620 billion number gets.

 

[Kaitzilla]

Yup, too big to let fail.

https://twitter.com/x/status/1635086537812770816

...extraordinary step of designating SVB and Signature Bank as a systemic risk to the financial system, which gives regulators flexibility to guarantee uninsured deposits...

Crisis over.

 

[Birdjaguar]

Tax dollars at work protecting venture capitalists.

 

[Farm Boy]

Somebody better hang.

 

[Birdjaguar]

Somebody better hang.

Mike Pence is in line for that....