I know I am extremely culturally biased but “Silicon Valley Bank” kind of screams “Juicero Pets.com Savings and CryptoLoan” to me.
@Popehat why is this so odd to people? This bank is 40 years old. Not ancient, but that’s no predictor of stability, but it’s not like they’re swindling people.
The problem is likely a bunch of VCs and later stage investors pouring poison in the ears of startup leaders (or outright commanding them) and rallying everyone into a run on the bank. When your customers are all startups beholden to investors, you’re fucked if the investors say get out.
@elfprince13 @Popehat to be clear…
Fed raises rates because “inflation”, except no one gives a shit and everyone yells this will make unemployment go up
Free money dries up, startups start to lean on cash
Seeing this, SVB sells bonds to shore up reserves
Bonds underperform because see rate hike above
They need $2B and start to talk about ways to get it
Fuckwits on Sand Hill psst psst to their vassals to pull out cash. I’m sure they could’ve scrounged $2B
$42B run on Thursday
Fin
