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Top-level
 To the point about dominoes falling: if I were a journalist, I'd start asking gig workers (DoorDash, Uber, Lyft) whether they've been told to expect delays in payment for their services. Lots of people that have absolutely nothing to do with tech will start sharing that they're not getting paid b/c their payroll department used financial services software that moved money through #SVB. The impact will be much broader than people expect. 20 comments
The next shoe to drop is going to be another bank (but I won't speculate about which one because I'm not a VC, and therefore know better) and/or a massive capital call that shifts lots of money into liquidities Turns out #SVB's CEO was one of the guys whispering in the Fed's ear to manufacture a recession— and cost tech workers their jobs. Now, he's out as one of the executives at the San Francisco Fed Board. #Karma h/t @heidilifeldman The irony is that this fucker was almost certainly trying to jack up the Fed's rates in this tight VC funding environment with the expectation that startups would have to borrow money to extend their runway— at higher rates. He did this to himself, and to everyone else he screwed over. He needs to go to prison. What did Elon's BFF Peter Thiel know, and when did he know it? #SVB "Founders Fund withdrew millions from SVB, said the person, who asked not to be identified discussing private information." "Peter Thiel’s Founders Fund had no money with Silicon Valley Bank as of Thursday morning as the bank descended into chaos, according to a person familiar with the matter." https://news.yahoo.com/thiel-founders-fund-withdrew-millions-005223894.html Just going to post this *riiiiight here* "The venture world took note late last week as news broke that San Francisco-based Founders Fund will cut the size of its $1.9 billion venture fund raised last year by about half." https://news.crunchbase.com/venture/founders-fund-investments-peter-thiel-abnb-stripe/ I'll close by noting that the Washington Post had a journalist on the ground outside of Silicon Valley Bank in Menlo Park, but the New York Times did not (at least not when I was there). Worth noting as you read coverage of the #SVB fallout over the coming weeks and months. Why? Because when press outlets don't have journalists on the ground, they rely on the bullshit spin that comes out of crisis comms and PR shops. I fully expect a lot of faux-empathetic framing that pushes for a bailout. /X Lots of "thought leaders" on the hellsite and elsewhere are already bullshitting about the #SVB failure and blaming it entirely on the banks balance sheet. That's a reductive and shallow take. Their balance sheet and naked risk was a factor but, at the end of the day, SVB was very well capitalized and their spread was 2.00% as of last quarter. They went under because their CEO fucked around, there was a $43 billion bank run but SVB could only come up with $42 billion, and investors panicked. Why mention this ^^ because the spin cycle is at work— I've lived through this bullshit 3 times already. The playbook is *always* the same: blame everything *other than* the lack of regulation and lackluster enforcement. Find shameless, clout-seeking useful idiots to amplify, give them fancy sounding titles, and run their hot takes on a loop until the public accepts the "need" to bail out the billionaires that manufactured the mess. Let's not get fooled again. As I warned about in yesterday's posts to this thread: Every. Fucking. Time. https://www.washingtonpost.com/us-policy/2023/03/11/silicon-valley-bank-bailout-washington/ Let's be clear: the #SVB money is there. It's in government bonds and other illiquid assets that will be sold (at a loss) but the money is there. On Monday, the U.S. government will make it possible for each customer to withdraw up to $250K. Those pushing to "make all depositors whole" are angling for a billionaire bailout. That's who stands to lose as the FDIC sells the bank's assets. The money is there. The money is there. The money is there. Where do people think all those equities on #SVB's balance sheet came from? Why do people think that Y Combinator-investors are vocally demanding a bailout? Hint: some folks will lose all their profits when their convertible notes are sold at a discount. Let's be crystal clear: this was a bank run directed by one group of venture capitalists, which left another group of venture capitalists holding the bag. The latter is vocally demanding that taxpayers "make them whole" which translates into: rewarding them for assuming unmitigated risk. The FDIC will ensure that bills are paid, loans are serviced, and payrolls are funded. The VCs that go out of business played the game and lost. That's capitalism. They can't have it both ways. |
Gregory's Server
For those trying to catch up on the #SVB story, here you go: