The Financial Crash of 2023

90% of all Y Combinator capital ventures fail. Greensboro’s Boom Supersonic is emblematic of these Ponzi schemes.

Record Bank Run Drained A Quarter, Or $42BN, Of SVB’s Deposits In Hours, Leaving It With Negative $1BN In Cash

Funded by over $173 billion in deposits (of which $151.5 billion are uninsured), has long been viewed as the bank at the heart of the US startup industry due to its singular focus on venture-capital firms. In many ways it echoes the issues we saw at Silvergate, which banked crypto firms almost exclusively…

Several prominent venture capitalists – such as Peter Thiel – advised their tech startups to withdraw money from Silicon Valley Bank on Thursday…

Why are VC icons ganging up and Lehmaning SVB? If your business model relied on QE wouldn’t you try to trigger the next QE too…


JP Morgan Chase & Co sought to convince some SVB customers to move their funds Thursday by touting the safety of their assets…

And while we wait to see if Dimon’s participation in the Epstein scandal will now fade from media coverage, and whether Powell will launch QE, we know one thing for sure: JPM was a clear and immediate benefactor of SIVB’s collapse because in a day when everything crashed, JPM stock was one of the handful that were up.’

Top comment:

“The thing about the internet . . Its instant . . News of Bank runs is EVERYWHERE. It could be a very very black Monday.”

The Run on Silicon Valley Bank was FTX 2.0 on Stablecoins

The fall of Silicon Valley Bank – hundreds of Israeli technology companies exposed

“Moody’s reduced SVB’s credit rating, from A minus to BBB+, which created an influx of customers who wanted to withdraw their money from the bank…

Over 500 Israeli hi-tech companies are the bank’s customers and it is the second most popular bank among Israeli hi-techists after Bank Leumi. Paradoxically, there were Israeli hi-tech companies that transferred funds to SVB following the social protest and now they fear that these funds are at risk.”

Silicon Valley Bank’s failure is an extinction-level event for startups, says Y Combinator’s Garry Tan

Yellen Says Government Will Help SVB Depositors But “No Bailout” As Fed, FDIC “Hope” Talk Of Special Vehicle Prevents More Bank Runs

Of SIVB’s $173 billion of customer deposits at the end of 2022, $152 billion were uninsured (i.e., over the $250,000 FDIC insurance threshold) and only $4.8 billion were fully insured…

The entire banking system suddenly becomes reduced to a game of chicken as follows: Fed/regulators won’t backstop deposits today and won’t admit a bank crisis is emerging, but if a bank crisis emerges and there is a flight of deposits on Monday morning, they will move.”

As JPM’s Michael Cembalest says “It’s fair to ask about the underwriting discipline of VC firms that put most of their liquidity in a single bank with this kind of risk profile. At the end of 2022, SIVB only offered 0.60% more on deposits than its peers as compensation for the risks illustrated below; in 2021 this premium was 0.04%”.

Fatal Distraction? Senior SVB Risk Manager Oversaw Woke LGBT Programs

While Silicon Valley Bank careened toward its spectacular collapse, the bank’s head of risk management for Europe, Africa and the Middle East devoted a chunk of her time to various LGBTQ+ programs.

Meanwhile, SVB went without a chief risk officer (CRO) from April 2022 to January 2023, the Daily Mail reports, as the bank apparently had little urgency to replace Laura Izurieta before finally tapping Kim Olson earlier this year.


Silicon Valley Bank Fails, With Deposits of Many Venture-Backed Companies Frozen. How Bad Will the Fallout Be?

SVB had a relatively small, highly committed group of depositors. About 37,000 customers accounted for nearly $157 billion or 74% of the bank’s assets with an average account size of over $4 million….at the end of 2022, 87% of the bank’s $173 billion in deposits were uninsured…

A Silicon Valley Bank branch in Manhattan today called the cops on tech investors trying to pull their cash out as a run on the bank forced regulators to seize its assets…

The CEO of a Boston-based health and wellness company said she has been unable to log into her Silicon Valley Bank account, where she has at least $10 million in deposits…

SVB was incredibly integrated into the lives of many founders. Not just their startup’s bank & lender, but also provided personal mortgages and other financial services.”

From the comments:

“They bought a lot of MBS at the worst possible time…

They chose to not hedge the interest rate risk.

Regulators close crypto-focused Signature Bank, citing systemic risk

Signature is one of the main banks to the cryptocurrency industry. As of Dec. 31, Signature had $110.4 billion in total assets and $88.6 billion in total deposits.

Fed Panics: Signature Bank Closed By Regulators; Fed, TSY, FDIC Announce Another Banking System Bailout

This is a regulatory failure of historic proportions by both the Fed and Treasury. Instead of preventing billions in losses, the Fed was worrying about board diversity and Yellen was flying to Ukraine. Everyone should be sacked immediately.

First Republic Shares Crash 60% As Regional Bank ‘Crisis In Confidence’ Spreads

Banks which are sitting on some $620 billion in unrealized losses on all securities (both Available for Sale and Held to Maturity) at the end of last year, according to the Federal Deposit Insurance Corp.

From ZH on Twitter:

$25BN? They think $25BN will stop this bank run???

Futures Tumble, Yields Crater, Banks Plunge As Market Realizes Latest Bailout Is Insufficient

It’s not just the regional US banks which we warned were about to be wiped out: big international banks are also getting crushed with Italian bank giant UniCredit shares halted, while Credit Suisse shares are not only 10% lower to new all time lows, but its Credit Default Swaps just hit a record wide…

2Y TSY yields have plummeted an insane 50bps… suffering the biggest 2-day drop since Black Monday in October 1987!..

The Fed is making it easier for banks to access the Fed’s discount window in order to turn assets that have quickly depreciated due to rising rates into cash without having to take the large losses the Silicon Valley Bank suffered last week. Essentially this would allow banks to obtain liquidity over the next year without selling assets…

SVB’s woes are a combination of one of the largest hiking cycles in history, one of the most inverted curves in history, one of the biggest bubbles in tech in history bursting, and the runaway growth of private capital.

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