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No Liquidity - Silicon Valley Bank meltdown sparks contagion fears
Posted on 3/10/23 at 10:25 am
Posted on 3/10/23 at 10:25 am
quote:
Fears of a broad financial contagion spread on Friday after tech lender Silicon Valley Bank set off alarm bells over liquidity concerns — sparking share losses across the banking sector worth some $52 billion on Thursday.
Peter Thiel’s venture capital firm Founders Firm advised clients to withdraw their deposits from Silicon Valley Bank — despite the fact the lender has been a mainstay for tech startups for decades, according to Bloomberg News.
Bill Ackman, the billionaire hedge fund manager, called on the US government to step in and bail out Silicon Valley Bank.
Michael Burry, the eccentric investor featured in the 2015 film “The Big Short,” warned: “It is possible today we found our Enron.”
Shares of Silicon Valley Bank’s parent company, SVB Financial Group, nosedived by 60% on Thursday evening, wiping out more than $80 billion from its market capitalization.
NYPost
quote:
Greg Becker, the CEO of Silicon Valley Bank, tried to calm tech investors and startups during a Thursday Zoom call.
“My ask is to stay calm because that’s what is important,” Becker told listeners on the call. “We have been long-term supporters of you — the last thing we need you to do is panic.”
quote:
On Wednesday, Silicon Valley Bank said it would raise $2.25 billion following a $1.8 billion after-tax loss in various bets on securities.
“We knew that would create a lot of noise, which it has,” Becker conceded. “But what we wanted to do was reposition … a low-yield asset to a high-yield asset.”
SVB, which does business as Silicon Valley Bank, launched a $1.75 billion share sale on Wednesday to shore up its balance sheet.
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Posted on 3/10/23 at 10:27 am to member12
Too big to fail.
Posted on 3/10/23 at 10:28 am to member12
Where’s Uncle Billy when you need him?
Posted on 3/10/23 at 10:28 am to member12
Sounds like they really fricked up
Posted on 3/10/23 at 10:29 am to member12
Feature not a bug
Posted on 3/10/23 at 10:33 am to member12
quote:
Peter Thiel’s venture capital firm Founders Firm advised clients to withdraw their deposits from Silicon Valley Bank — despite the fact the lender has been a mainstay for tech startups for decades, according to Bloomberg News.
Peter Gregory was a better version of Peter Thiel (or at least funnier version). Silicon Valley Bank must have stopped supporting startups of college dropouts.
This post was edited on 3/10/23 at 11:16 am
Posted on 3/10/23 at 10:34 am to member12
I'm pretty sure there securities short fall was selling a few billion in bitcoin to raise funds as bitcoin was dropping by 20 percent.
Likely some shenanigans being pulled by the smartest guys in the room that are running the bank.
Please don't let the feds bail out these guys. Let it burn
Likely some shenanigans being pulled by the smartest guys in the room that are running the bank.
Please don't let the feds bail out these guys. Let it burn
Posted on 3/10/23 at 10:35 am to member12
Interesting and alarming.
SVB is trying to sell itself right now, but there is a run on it and the deposit outflows are making valuation efforts difficult. This bank may fail soon.
A lot of VC-backed companies in the valley rely on this bank for loans and to hold operating cash. This is a big development for the self proclaimed “cradle of innovation”. They grew pretty fast and didn’t really develop their loan portfolio.
Those of you old enough to live through and understand the S&L crisis in the 1980s….what are the parallels?
SVB is trying to sell itself right now, but there is a run on it and the deposit outflows are making valuation efforts difficult. This bank may fail soon.
A lot of VC-backed companies in the valley rely on this bank for loans and to hold operating cash. This is a big development for the self proclaimed “cradle of innovation”. They grew pretty fast and didn’t really develop their loan portfolio.
Those of you old enough to live through and understand the S&L crisis in the 1980s….what are the parallels?
This post was edited on 3/10/23 at 10:39 am
Posted on 3/10/23 at 10:36 am to member12
My firm uses them, and last night we transferred all our of cash to a new bank.
Posted on 3/10/23 at 10:36 am to member12
domino or no domino....???
Posted on 3/10/23 at 10:39 am to member12
quote:
Bill Ackman, the billionaire hedge fund manager, called on the US government to step in and bail out Silicon Valley Bank.
Absolutely not.
They will, but its pure corporate welfare on top of corporate greed.
Posted on 3/10/23 at 10:39 am to tigeraddict
And trading is halted meaning SEC is letting big players get all their chips lined up to hedge losses.
Regulators are the fricking worst.
Regulators are the fricking worst.
Posted on 3/10/23 at 10:40 am to tigeraddict
They went from $17 billion in value to less than $7 billion (and dropping) in a week.
Posted on 3/10/23 at 10:40 am to SouthMSReb
quote:
And trading is halted meaning SEC is letting big players get all their chips lined up to hedge losses.
Regulators are the fricking worst.
You sound almost as cynical as me.
Posted on 3/10/23 at 10:41 am to RogerTheShrubber
If the taxpayers bail this bank out, I am going to be supremely pissed.
Posted on 3/10/23 at 10:42 am to member12
Someone will end up with the short stick here when the bank runs out of liquidity. Smart VCs taking the life boats early
Posted on 3/10/23 at 10:52 am to Upperdecker
Wonder how their credit portfolio looks? Everyone is wanting liquid right now, but once they run the value down, if the credit book looks solid, there could be some value there for someone.
Posted on 3/10/23 at 10:53 am to Rebel
quote:
Too big to fail.
Billionaires keep the profits.
Taxpayers eat the losses.
That's what happens when banks buy Senators.
Posted on 3/10/23 at 10:58 am to wareaglepete
quote:
Everyone is wanting liquid right now, but once they run the value down, if the credit book looks solid, there could be some value there for someone.
Something is fishy, I think the other poster hit the nail with crypto being the real culprit. Because if we're to believe this story at face value that SVB has too many treasury bonds, that doesn't explain the bond yields rising to offset the decrease in bond prices. It's a journal entry movement, nothing to cause a run.
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