#silicon valley bank collapse

[mudwerks]

(via How to Think about the Silicon Valley Bank Collapse - TPM – Talking Points Memo)

Reading through the often frenzied commentary about the collapse of Silicon Valley Bank (SVB), it’s important to note how much that chatter conflates or confuses what are distinct if complex issues. The most high octane issue is

watching the dyed-in-the-wool libertarians and anti-regulation voices who run Silicon Valley suddenly demanding a bailout. 

Specifically, many are demanding that the FDIC backstop all the bank’s deposits rather than simply those up to $250,000 because of the number of startups which could quickly go under without money to make payroll and cover other on-going costs of doing business. (SVB’s deposits, roughly 95% of which are uninsured, are heavily concentrated in the tech start-up ecosystem.) It’s a hypocrisy that merits all sorts of guffaws and mockery. But hypocrisy isn’t new or terribly surprising...

[shivayrankar]

Silicon Valley Bank Collapse: What It Means | GripInvest

Understand the implications of the Silicon Valley Bank collapse. Stay informed and explore investment opportunities with GripInvest.

[cryptonewsme]

Silicon Valley Bank Collapses – What Happened and Why is USDC Affected

Only slowly picking itself from the impact of the FTX scandal,  the world got hit with news of the largest financial crisis since the global financial crisis in 2008. The renowned Silicon Valley bank was shut down by the government. Shortly after news of the bank’s failure broke, the stablecoin USDC fell rapidly to a record low. The report – shocking and scary – made several investors worldwide…

[daminouspurity]

EU passes Data Act including smart contract regulation

I think it's funny how the past three days have happened, including the #SVB paying out bonuses, the woke bank's CEO cashing out three days before the whole thing wen to sh*t, and mysteriously $25,600 per #Bitcoin happens.

So all out of the Blue, Bitcoin, up 25% since this weekend, the weekend were 3 banks collapsed. Also let's not forget the WEF's digital bank and digital coin agenda and most importantly the EU passed the "reset switch" bill.

The European Parliament adopted legislation under the Data Act on March 14, which includes provisions on smart contracts and the internet of things (IoT).

The legislation was passed with 500 votes in favor and 23 against it, aiming to boost business model development to create new industries and jobs. Article 30 of the Data Act includes provisions on “essential requirements regarding smart contracts for data sharing.”

The new rules will come into force in 2024 and companies must adhere to them if they want to provide services or products to EU-based consumers. Provisions under Article 30 mandate that smart contracts must have the same level of “protection and legal certainty as any other contracts generated through different means.” The bill also includes requirements around protecting trade secrets, data archiving and ensuring that "transactions can be interrupted and terminated" as needed.

Additionally, it mandates that smart contracts must be protected through “rigorous access control mechanisms at the governance and smart contract layers.” Under the new rules, smart contracts will be subject to “harmonized standards” defined in the Data Act. All under the radar and with the US bank distraction in place, all the countries and corrupt politician's just voted to unlock every person's bank account and bring in the "obey or we turn off your access to money" bill.

[mysharona1987]

[bitchesgetriches]

6 Lessons YOU Can Learn from the Silicon Valley Bank Crash

When news of the Silicon Valley Bank crash broke, I sighed deeply. Because sighing deeply is the age-appropriate version of a toddler pounding their fists on the floor screaming “I don’ wanna, I don’ wanna, I DON’ WANNA!” That’s always how I feel when I have to understand some complicated new brouhaha caused by oligarchs’ greed, when all I truly need in this life is more naptime.

Guys, don’t worry. Because I am a grown-up woman with finely tuned coping mechanisms, I worked through my tantrum and I did it! I understand what the hell happened to Silicon Valley Bank.

Paragon of intellectual generosity that I am, I’m going to explain it back to you.

If you want an in-depth, technical breakdown, this ain’t gonna be it. I’m going to focus on what this means for us plebs. That means skipping all the boring parts, creatively employing childish metaphors, recklessly speculating about its impact on the future of the economy, and oversimplifying absolutely everything.

Complex, dense financial topics explained by babies, for babies. That’s the Bitches Get Riches brand promise!

Keep reading

[tomorrowusa]

Republicans are like 4-year-olds who just learned a bad word and can’t stop saying it.

All Republicans do nowadays is scream “WOKE!” whenever they see something they don’t like. It’s true that woke is a dumb sounding word – that may be why most progressives haven’t used it much since this SNL fake commercial from 2017.

The Trump administration indulged in an orgy of deregulation which led to disasters like the four recent derailments in Ohio to the recent failure of the Silicon Valley Bank (SVB). Screaming “WOKE!” is their way of evading responsibility without having to provide explanations for their deregulation policies.

As soon as it was clear that Silicon Valley Bank would not survive the weekend, conservative influencers and Republican politicians had a culprit in sights.

Wokeness.

“They were one of the most woke banks,” Representative James Comer, the top Republican on the House Oversight Committee, said during a segment on Fox News.

The governor of Florida, Ron DeSantis, also spoke to Fox about the collapse of the bank, and he also blamed the bank’s diversity programs. “I mean, this bank, they’re so concerned with D.E.I. and politics and all kinds of stuff. I think that really diverted from them focusing on their core mission,” he said.

 Being Republican means you never have to back up your claims.

It is unclear whether these conservatives are working from the same memo or just share the same narrow obsession. Regardless, there is no evidence that D.E.I. or any other diversity initiative is responsible for the collapse of Silicon Valley Bank. It is nonsense. And while it shouldn’t be taken seriously on its own terms, this deflection is worth noting for what it represents: the relentless effort to mystify real questions of political economy in favor of endless culture war conflict.

The real story behind the collapse of Silicon Valley Bank has much more to do with the political and economic environment of the previous decade than it does with “wokeness,” a word that signifies nothing other than conservative disdain for anything that seems liberal.

The failure of the SVB was essentially caused by poor bets by the bank.

“Flush with cash from high-flying start-ups,” my newsroom colleague Vivian Giang explains, Silicon Valley Bank “did what most of its rivals do: It kept a small chunk of its deposits in cash and it used the rest to buy long-term debt like Treasury bonds.” As long as interest rates stayed low, those bonds promised safe returns.

Interest rates did not stay low. To fight inflation and reduce the price of consumer goods, the Federal Reserve raised interest rates seven times in 2022. With each increase, Silicon Valley Bank lost money on its bonds. Worse, the interest rate surge affected venture capital firms and the entire world of tech start-ups, harming the bank’s portfolio as those companies shed value and reduced deposits. Clients started to withdraw money to meet their liquidity needs, and last week, in order to fund these redemptions, Silicon Valley Bank announced it had sold $21 billion in bonds, at a loss of $1.8 billion. The bank then let it be known that it would sell $2.25 billion in shares to cover the loss.

Worried clients began to withdraw more money, which spooked investors, a development that pushed more clients to withdraw even more money. (Peter Thiel’s Founders Fund reportedly called for its start-ups to pull their cash while they still could.) On Friday, as the bank run gained steam, California’s financial regulatory agency announced that it had taken possession of the bank and placed it under the receivership of the Federal Deposit Insurance Corporation.

Remember how in the aftermath of the Bush financial collapse of 2008 the Obama administration under Treasury Secretary Tim Geithner initiated stress tests on banks to see if they were financially viable? Donald Trump and the GOP 115th Congress did away with those tests.

It’s not as if no one thought this collapse could happen. “The failure of Silicon Valley Bank is a direct result of an absurd 2018 bank deregulation bill signed by Donald Trump that I strongly opposed,” Senator Bernie Sanders said in a statement on Sunday. Senator Elizabeth Warren made a similar point in an essay published in The Times on Monday, in which she also mentioned the failure of New York-based Signature Bank in the immediate aftermath of S.V.B.’s collapse: “Had Congress and the Federal Reserve not rolled back the stricter oversight, S.V.B. and Signature would have been subject to stronger liquidity and capital requirements to withstand financial shocks.”

You’ll never guess which Florida congressman voted for bank deregulation.

[I]f you want to understand the collapse of Silicon Valley Bank, you have to understand the political environment that led Congress to loosen regulations on regional banking institutions. You have to understand the interests involved, the ideologies involved and the personalities involved, like DeSantis, who voted for the deregulation bill as a congressman.

😮 😳 🙀

The people who blame “wokeness” for the collapse of a bank do not want you to understand or even think about the political economy of banking in the United States. They want to deflect your attention away from the real questions and turn it toward a manufactured cultural conflict. And the reason they want to do this is to obscure the extent to which they and their allies are complicit in — or responsible for — creating an environment in which banks collapse for lack of appropriate regulation.

Yep, as a House member, Ron “Choke on Woke” DeSantis voted to weaken safeguards on the banking system. If he keeps screaming “WOKE! WOKE! WOKE!” constantly then he thinks he won’t have to answer for his vote back in 2018.

So if you hear GOP MAGA zombies and others on the far right screaming “wokeness” about some disaster, don’t argue with them – they don’t care anyway. Just scream back, “DEREGULATION!” instead. Put them on the defensive. Nobody wins by playing defense 100% of the time.

[mudwerks]

(via How Silicon Valley Bank collapsed, who it affects, and what happens now - The Verge)

If interested - the best summary and analysis of what happened, and what might happen now, that I’ve seen so far.

[nicklloydnow]

“Big banks including JPMorgan Chase & Co. and PNC Financial Services Group Inc. are vying to buy First Republic Bank in a deal that would follow a government seizure of the troubled lender, according to people familiar with the matter.

A seizure and sale of First Republic by the Federal Deposit Insurance Corp. could come as soon as this weekend, the people said.

The San Francisco-based bank has teetered for weeks following the March 10 failure of fellow Bay Area lender Silicon Valley Bank. The SVB meltdown spurred panicky First Republic customers to pull around $100 billion in deposits in a matter of days.

The stock has lost some 97% of its value since.

(…)

A seizure and sale of First Republic would cap the astonishing collapse of a lender that was, until recently, the envy of finance. With some $233 billion in assets at the end of the first quarter, it would be the second-largest bank to fail in U.S. history.”

“The Federal Deposit Insurance Corp. has asked banks including JPMorgan Chase & Co., PNC Financial Services Group Inc., US Bancorp and Bank of America Corp. to submit final bids for First Republic Bank by Sunday after gauging initial interest earlier in the week, according to people with knowledge of the matter.

The regulator reached out to banks late Thursday seeking indications of interest, including a proposed price and an estimated cost to the agency’s deposit insurance fund. Based on those submissions Friday, the regulator invited some firms to the next step in the bidding process, the people said, asking not to be named discussing the confidential talks.

(…)

JPMorgan is among a small number of giant banks that have already amassed more than 10% of nationwide deposits, making the firm ineligible under US regulations to acquire another deposit-taking institution. Authorities would have to make an exception to allow the country’s largest bank to get even bigger.”

[indescriptequilibrium]

hhhggghhghh put on a new epatch this morning n now im having a total fag moment nsfw edition at work ٩(ˊ〇ˋ*)و

[cyberianlife]

The Federal Deposit Insurance Corp has taken oven Silicon Valley Bank

[diablo1776]

Don't wait and be a panic buyer once the SHTF

[datawithstory]

I have written an article about the reason for Silicon Valley Bank's collapse