When Silicon Valley Bank, the 16th (or 18th depending on how you count) largest bank in the country based on assets but with only 16 retail branches, suddenly fails, it means a lot of people are going to be hit with losses. According to Zerohedge, a lot of those assets are left with no protection….
Silicon Valley Bank, aka SIVB, the 18th largest bank in the US with $212 billion in assets of which $120 billion are securities (of which most or $57.7BN are Held to Maturity (HTM) Mortgage Backed Securities and another $10.5BN are CMO, while $26BN are Available for Sale, more on that later )…
… 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.
…and without even the phony “insurance” provided by the FDIC, it looks like a lot of powerful people are about to get a major financial haircut. Never fear, that isn’t going to happen. The propaganda is already starting…..
Entrepreneur and Dallas Mavericks owner Mark Cuban has demanded the Federal Reserve take action and assume responsibility following the collapse of Silicon Valley Bank (SVB) Friday.
“The Fed should IMMEDIATELY buy all the securities/debt the bank owns at near par, which should be enough to cover most deposits,” Cuban wrote as part of a lengthy Twitter chain Friday. “Any losses paid for in equity and new debt from the new bank or whoever buys it. The Fed knew this was a risk. They should own it.”
“If the Fed doesn’t own it, trust in the banking system becomes an issue,” Cuban argued. “There are a ton of banks with more than 50 pct uninsured deposits.”
Billionaire investor Bill Ackman wrote a lengthy analysis of the Silicon Valley Bank failure on Saturday, arguing that the U.S. government needs to protect all of the bank’s depositors.
The financial expert says that the government needs to take action by Monday to avoid an economic meltdown.
Stories like this, dutifully posted by Fox, are priming the pump for the Federal government to take action. It is straight up propaganda on behalf of the elites.
The depositors at this bank are not little old ladies who direct deposit their Social Security checks, they are venture capitalists and the type of people who run in the same circles as billionaires like Mark Cuban and Bill Ackman. That is why I keep pointing out how few branches SVB operated. They are not funded by regular retail depositors, they get their money from people with deep pockets to provide capital to start-ups.
You probably won’t see it but I suspect that Congress will act to make these well connected depositors whole, using made up “money” that will get tossed onto the national debt dumpster fire and increase inflation for the rest of us. What is the point of buying politicians unless you can rely on them to protect your shekels when someone screws up?
Now if your local actual bank goes under? Tough shit peasant, you might never be made whole.
All bank customers are equal but some are more equal than others.