Silicon Valley Bank is Dead

Discussion in 'The Mainboard' started by Menelaus, Mar 10, 2023.

  1. VaxRule

    VaxRule Mmm ... Coconuts
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    I never said that at all. I just pointed out that government action was a benefit to the owners.

    That’s it. That’s been my only point from the beginning of this.
     
  2. wes tegg

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    Hope so!
     
  3. VaxRule

    VaxRule Mmm ... Coconuts
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    Show me where I said shareholders would profit.
     
  4. Where Eagles Dare

    Where Eagles Dare The Specialist Show On Earth
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    :laugh:

    the owners lost 16 Billion dollars in 24 hours. They have nothing. The governments action was solely to protect the depositors, the customers of the bank. Come C-level liability and lawsuits aren't a benefit to shareholders. That's such an absurd conclusion to take.. :roll:
     
  5. Where Eagles Dare

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    Can you explain to me the difference between owners & shareholders, in your opinion? Explain how they are different?
     
  6. Where Eagles Dare

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    Best get that Valley practice established ASAP!
     
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  7. Detlef Schrempf

    Detlef Schrempf Back to Back to Back AAU National Champs
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    He’s got a valley practice. A Mississippi Valley practice.
     
  8. wes tegg

    wes tegg I'm a Guy's guy, guys.
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    All valleys, really. Peaks, too.
     
  9. GoodForAnother

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    I don’t work in insurance
     
  10. Where Eagles Dare

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    Yes, we know you're trying to become a micro influencer on twitter
     
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  11. GoodForAnother

    GoodForAnother I lost my heart to a Galway girl
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    trying? succeeding pal
     
  12. VaxRule

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    Do you understand that benefit and profit are not the same thing?
     
  13. Detlef Schrempf

    Detlef Schrempf Back to Back to Back AAU National Champs
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    Some will get pennies and others will get a bailout. Have you not put it together yet?
     
  14. Control

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    What's "AFF"? Hey if you can't handle another person's view on something, don't read it.
     
  15. GoodForAnother

    GoodForAnother I lost my heart to a Galway girl
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  16. Where Eagles Dare

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    What way do you think people who just lost 16B will benefit if it isn't monetarily? The govt stepping didn't provide any bit of "benefit" to the owners/shareholders (same thing)
     
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  17. GoodForAnother

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    hell yeah
     
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  18. Where Eagles Dare

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    Apparently b/c the gov't stopped a bank run, which would have led to more capital injection by the Fed, it benefited the owners b/c the people who owned 60mm shares that were worth ~$16B on Wednesday, but now worth $0, might be able to file a lawsuit?

    Okay...
     
  19. Sir Phobos

    Sir Phobos Knight of Mars, Beater of Ass.
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    I'm going to ask a purposefully dumb question because while I find this thread fascinating it's also well out of the range of things I consider myself at least slightly educated on but:

    shouldn't running a bank be fairly easy? or more precisely shouldn't it be easy if you're not a fatal combination of greedy and stupid?

    I'll hang up and listen, thanks.
     
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  20. GoodForAnother

    GoodForAnother I lost my heart to a Galway girl
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    no, it’s really hard. that’s why they get paid so much to do it
     
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  21. two

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    When the goal of the bank is to maximize profits and not protect the money you’re holding for others I’m sure it gets a lil difficult
     
  22. Sir Phobos

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    I'd like to hire you to repeat this to teachers, sir.
     
  23. pperc

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    A lot of assumptions. A buyer lining up is a rumor only at this point. Regardless, I’m not sure the burden legally falls to the previous SVB shareholders, are you?
     
  24. Where Eagles Dare

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    There is a lot of balancing that needs to take place. I'm sure there is an immense amount of nuance like running any Billion dollar company. They've been around for 50 years, so it's not like they were a new tech bank that ppl are making them out to be.

    I don't think this was really a case of greed. More on the side of stupidity, changing bond rate market really fucked them, combined with most of their heavy customers being VCs and they are all burning a lot of cash right now & taking a ton of withdrawals vs the past 5-7 years as deposits were just growing hand over fist from the client base. There is also a good bit of fault to go on the GOP for removing regulations of Dodd Frank for banks outside the top 4-5 in the US....their assets prices appropriately and probably could have seen this coming from a regulation/filing standpoint.

    It did appear the bank was trying/had been trying to raise capital b/c they saw this coming. Their stock sale was the last option & that tanked and was the end of it
     
  25. pperc

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    A government action to inject liquidity (note that this does not say they would cover any depositor short falls after liquidation is complete) would not benefit the former shareholders of SVB in any way, shape, or form. The government would be paid back once the long, slow liquidation process occurs that they are in control of and have full visibility into regarding the tangible assets and their value on the open market. The shareholders still get nothing from the federal government nor will they be let off any legal liabilities they might have (which I’m guessing is none) by the federal government should a liquidity injection occur. Your understanding of what’s being suggested isn’t correct.
     
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  26. herb.burdette

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    Owning a stock does not make a shareholder liable for the corporation’s debt. No stockholder is “on the hook” for anything.

    Shareholders will lose their investment in the stock. That money is gone.

    A receiver will take over management, removing existing management. Deposits will be paid from assets, but shareholders will not be paid from assets unless everyone else gets paid first.

    This bank has a lot of assets, because bank regulations require it.

    It just didn’t have liquid assets that could be sold immediately to stave off the run of depositors who withdrew their money.

    That is why the regulators took over.
     
  27. chuckmasterflex

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    I like the idea of the crypto guy more than the reality of him
     
  28. VaxRule

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    I don’t know who else would have to assume the bank’s liabilities than its owners.
     
  29. VaxRule

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    My entire argument has all along only been that a reduction in the bank’s liability is a benefit to its owners. That’s it. That’s the only argument I’ve ever made.
     
  30. bwi2

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    literally the antithesis of a corporation
     
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  31. Detlef Schrempf

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    Yes, which in this circumstance is an incredibly stupid argument since there is, you know, zero benefit to the owners of the company.
     
  32. herb.burdette

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    You seem to be assuming that stockholders are liable for debt. They aren’t. No stockholder owes anything to any depositor.

    Stockholders pay the bank money to own the stock and share profits. Now there are no profits and stockholders get nothing.
     
  33. Lyrtch

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    i largely hate this person but his heel turn has been fascinating

     
  34. Upton^2

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    https://www.ft.com/content/952f0c8f-ef27-48a2-8b21-40b2167bb220#comments-anchor

    Crypto group Circle admits $3.3bn exposure to failed Silicon Valley Bank

    Embarrassing quote from this crypto guy:

    Dante Disparte, Circle’s chief strategy officer, warned on Saturday that the company was protecting its stablecoin from a “black swan failure in the US banking system”. “SVB is a critical bank in the us economy and its failure — without a Federal rescue plan — will have broader implications for business, banking and entrepreneurs,” he tweeted.
     
  35. chuckmasterflex

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  36. THF

    THF BITE THE NUTS, THUMB IN THE ASS!
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    Interesting take on things

     
  37. Arliden

    Arliden Well-Known Member
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    Sorry if already posted, didn’t expect this to be at 9 pages already.



    Only the ones that have come out this far, lots of crypto in there. Wonder the knock on effects on things like USDC
     
  38. Sir Phobos

    Sir Phobos Knight of Mars, Beater of Ass.
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    again, forgive my ignorance, but isn't what Yang is saying is exactly what the government is doing? or at least attempting to do?

    or is he somehow suggesting just a no questions asked bailout and return of essentially every last penny to every last person and/or company?
     
  39. Upton^2

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  40. VaxRule

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    I think if depositors weren’t made whole and the scenario GFA described happened, that the corporate depositors still short on their deposits would attempt to claw that money back from such a settlement. Do you not?
     
  41. herb.burdette

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    This is the basic principle that caused FDR to declare a bank holiday when he took office, closed the banking system for a week, then ushered in the era of federally insured bank deposits.

    Banks could still choose to be State chartered, but banks within the FDIC program were deemed safer by customers due to FDIC insuring the deposits.

    In exchange for being FDIC insured, banks agreed to federal regulation and oversight.
     
  42. herb.burdette

    herb.burdette Meet me at the corner of 8th and Worthington
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    Shareholders and depositors will sue bank management.

    Shareholders and depositors will sue the board of directors who appointed the management.

    Shareholders and depositors will sue the outside auditor who certified the banks books.

    Shareholders cannot be sued by anyone. All the shareholders did was buy the stock, i.e., they gave the corporation money in exchange for the right to share in profits (a dividend) or sell the stock later at a higher price if the bank is profitable.

    Stockholders have zero liability to anyone for the corporation’s debt, in this case deposits.

    The only time a shareholder can be sued is if a fraudulent conveyance is made to them. For example, if SVB declared a dividend knowing it was insolvent. Depositors can sue to recoup the amount that was paid to them.
     
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  43. Detlef Schrempf

    Detlef Schrempf Back to Back to Back AAU National Champs
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    Yeah but the bailout, man.
     
  44. Lyrtch

    Lyrtch My second favorite meat is hamburger
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    tech bros really really really want the admin to come out and guarantee deposits at 100%
     
  45. VaxRule

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    But depositors won’t be suing anybody because they’re being made whole.
     
  46. herb.burdette

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    I’m kind of interested to see what assets this bank owns.

    This doesn’t appear to be like the S&L crisis in the late 80’s or 2009, which were driven by banks booking assets in real estate that was worth a fraction of what was booked. Those banks became insolvent because the real estate or mortgage backed securities they held cratered.

    Initial reports are that SVB had long term assets it couldn’t sell quickly when the run started. It may actually have valuable assets. Not sure any of that has come out.
     
  47. herb.burdette

    herb.burdette Meet me at the corner of 8th and Worthington
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    Right, this is the fundamental tenet that underpins the confidence in our banking system.

    A depositor is not a shareholder. Depositors don’t share in any profits. They don’t own the bank (unless it’s a mutual bank under state law, but that’s not the case here).
     
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  48. southside

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    Somewhat related
     
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  49. herb.burdette

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    I’m not sure we know that yet, but I assume that will be the case.

    But yes, you can sue only if you have a loss.
     
  50. Handcuffed

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    i guess it's going against popular sentiment in this thread but i find this compelling

     
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