To investors, Silvergate Bank announced they would liquidate earlier this week. Now Silicon Valley Bank has come under immense pressure as a bank run commenced yesterday. There is a lot to unpack in this situation, so let’s dig in. Silicon Valley Bank is the leading bank for Silicon Valley tech companies. Great marketing in their name. Their customer base is dominated by businesses, not retail. And the bank is notorious for extending lines of credit to companies and venture capital firms as well, which many banks are more shy about participating in.
I completely agree with this statement: "it is impossible for banks, companies, and individuals to plan their lives with the constant interference of the central bank." Today's problems have affected me, and I am very unhappy about it. I hope that this situation will be resolved as soon as possible.
The oligarchs uber alles head space you have to occupy to blame the fed for doing its job keeping us out of the old school bubble-financial crisis-depression cycle of old rather than the modern finance firm making (typical) greedy and short sighted and stupid investment decisions is shockingly (willfully) ignorant and self interested. I'd call it insane if it weren't so depressingly prevalent.
You place all the blame on the Federal Reserve. The Federal Reserve didn’t force SVB’s mgmt team to buy $80B of 10 year 1.5% paper. That was an SVB mgmt decision. SVB did that because it thought it would make money and drive its stock price higher. The risk was known in the analyst community for at least a year with stock analysts writing fairly extensively on SVB’s long duration assets and its exposure to increased short term rates. SVB too knew of the risk. SVB’s Chief Risk Officer quit (presumably over this) and for much of 2022 SVB had no Chief Risk Officer. Noteworthy too SVB’s prior Chief Risk Officer sold her SVB stock in the past year.
It’s easy and reflexive perhaps to blame the Fed but it’s not a Fed issue. It’s an SVB issue.
Hi, Just wanted to say thanks. Nice to have perspectives on this that are not steered by mainstream media and their advertising partnerships.
And EDIT though, spotted a type near the end where you wrote "When you whip people from a low interest rate environment to a high interest rate environment, it is impossible for things to break."
Fix the error: you need to write: ‘not to beak’ in the sentence: When you whip people from a low interest rate environment to a high interest rate environment, it is impossible for things to break.
🚨 Silicon Valley Bank is one of the 10 banks who got Epstein related subpoenas from the AG in the US Virgin Islands who was trying to find his sources of money.
I completely agree with this statement: "it is impossible for banks, companies, and individuals to plan their lives with the constant interference of the central bank." Today's problems have affected me, and I am very unhappy about it. I hope that this situation will be resolved as soon as possible.
The oligarchs uber alles head space you have to occupy to blame the fed for doing its job keeping us out of the old school bubble-financial crisis-depression cycle of old rather than the modern finance firm making (typical) greedy and short sighted and stupid investment decisions is shockingly (willfully) ignorant and self interested. I'd call it insane if it weren't so depressingly prevalent.
You place all the blame on the Federal Reserve. The Federal Reserve didn’t force SVB’s mgmt team to buy $80B of 10 year 1.5% paper. That was an SVB mgmt decision. SVB did that because it thought it would make money and drive its stock price higher. The risk was known in the analyst community for at least a year with stock analysts writing fairly extensively on SVB’s long duration assets and its exposure to increased short term rates. SVB too knew of the risk. SVB’s Chief Risk Officer quit (presumably over this) and for much of 2022 SVB had no Chief Risk Officer. Noteworthy too SVB’s prior Chief Risk Officer sold her SVB stock in the past year.
It’s easy and reflexive perhaps to blame the Fed but it’s not a Fed issue. It’s an SVB issue.
This is the only complete explanation I have read. Kudos 👏
SVB's implosion isn't the fault of the Fed. The Fed didn't hold a gun to SVB's head and force the bank to buy long-term treasuries.
Excellent post! Thanks again for your work.
It seems that SVB buying long term bonds is essentially the same process as any other bank, business or individual buying long term Bitcoin.
Both fall victim to the same fate if their decision does not pan out; an unfortunate and once seemingly ill-advised investment gone wrong.
Exactly. Well done Pomp.
Hi, Just wanted to say thanks. Nice to have perspectives on this that are not steered by mainstream media and their advertising partnerships.
And EDIT though, spotted a type near the end where you wrote "When you whip people from a low interest rate environment to a high interest rate environment, it is impossible for things to break."
Keep up the good work,
Mr Elon Gates
Fix the error: you need to write: ‘not to beak’ in the sentence: When you whip people from a low interest rate environment to a high interest rate environment, it is impossible for things to break.
GO woke Go Broke
They say the entire PR dept & HR were run by woke non-binary overlords
They became so obsessed with their non-binary mission of equality that they ignored counting the beans.
Recall that 'banking' had always been the 'most boring business' and not a means for transitioning the world to a non-binary nwo
https://bilbobitch.substack.com/p/none-dare-call-it-insanity-well-the
"No one thought the things to break first would be US-based, regulated banks though."
Avi Gilburt and team have been sounding the warning bell for quite some time, in fact.
https://seekingalpha.com/article/4586255-we-are-seeing-the-initial-cracks-in-bank-stability-time-to-be-cautious
And see their site at https://www.saferbankingresearch.com
Looks like an EPSTEIN connection to the SVB banks bombs / virgin island pedo banks
Now you ready for the rest off the Story
https://twitter.com/PTRUMPFORTX2020/status/1634929873717428224
🚨 Silicon Valley Bank is one of the 10 banks who got Epstein related subpoenas from the AG in the US Virgin Islands who was trying to find his sources of money.