What was Silicon Valley Bank (SVB)? The 16th largest bank in the country, the bank of choice for tech startups, and a financial institution that was instrumental to the rapid growth of Silicon Valley. It was also the largest bank to fail since the 2008 financial collapse.
Yesterday, the Federal Deposit Insurance Corporation took control of the bank’s assets, as a result of a good old-fashioned bank run. The bank had heavily invested customer deposits in treasury bonds, which are incredibly sensitive to the rapidly-rising interest rates. SVB’s failure raises concerns that other banks could face problems too. Investors reacted by dumping stocks of similar banks, including First Republic, Signature Bank and Western Alliance, many of which cater specifically to start-up clients and have similar investment portfolios.
It’s relevant to consider that in 2018 the Trumpster signed a bill that lessened regulatory scrutiny for many regional banks. SVB’s chief executive, Greg Becker (more on him in a moment), was a strong supporter of the change at the time, which reduced how frequently banks with assets between $100 billion and $250 billion had to submit to stress tests by the Fed. The bank reported $209 billion in assets at the end of 2022, the majority of which was uninsured, making the next few days especially concerning for anyone with money tied up in SVB. Meanwhile, the bank’s CEO Mr. Becker, along with its CFO, and CMO sold over $4.4 Million in stock over the last two weeks. The timing is suspiciously convenient.
There’s plenty more to be said, and certainly better-informed financial experts to listen to, but here’s the bottom line: This is the only logical end result of a financial system that’s held up by banks that don’t have enough money and companies that don’t make enough money. People are going to suffer, jobs will be lost, companies are going to fold. Capitalism and its reliance on endless consumption and unsustainable growth are to blame.
Side Items
Anatomy of Apartheid: This article by the Washington Post goes to great lengths to prove what we’ve known all along; the corrupt and sadistic Israeli regime is perfectly happy executing innocent civilians in broad daylight. These poor fools really used 3D modeling to recreate a recent deadly shooting in Nablus, showing exactly how Israeli forces in an armored vehicle fired repeatedly into a group of Palestinian civilians, even though those civilians were visible. What the Post seems to be overlooking or outright ignoring is that Israeli forces are perfectly comfortable doing this because there’s no such thing as accountability in an apartheid state
Union Busting in Canton, NC: A paper mill in Canton, NC that has been central to the small community is being shut down. The mill has been around for more than a hundred years and is the largest employer in Haywood County, employing nearly a thousand union workers. The company’s executives told workers that the mill will close in a few months, but not before they could offload tens of thousands of shares of company stock, just before the prices dropped. How convenient
Liverpool’s Roller Coaster: The Reds followed up last week’s shellacking of third-place Manchester United with an absolutely piss-poor performance this morning against LAST PLACE Bournemouth, losing 1-0 to the relegation-threatened squad. It’s yet another chapter in what has become a season to forget. Liverpool have fully embraced the role of Robin Hood, taking points from top teams and gifting them to bottom feeders. Can’t wait to play Real Madrid on Wednesday…