Market Crash

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Over on Hacker News they are talking about the failure of Silicon Valley Bank, and it’s illiquid long dated treasuries.

With the rapid rise in internet rates, almost all the long dated debt over the last 2 decades have taken a HUGE haircut, so suddenly many banks and such will be under capitalized and the Treasury market is much less liquid.

Couple that with debt ceiling shenanigans and possible China dumping UST as political stunt or even prelude to Taiwan attack, and the US could suddenly have no way to pay its bills and could collapse.

Surprised more ppl not talking about SVB…..

DP. Same here. And I’m not even surprised, as someone who worked at SVB for a year. That place was ran so terribly bad, it’s no real surprise it’s falling apart.

Considering how inept so many VC firms can be (see Sequoia love letter to SBF https://web.archive.org/web/20221027180943/https://www.sequoiacap.com/article/sam-bankman-fried-spotlight/), and all the copycat startups funded by every VC firm, there is a certain amount of emperor has no clothes in tech….

Google and FB were legit money makers, basically inventing online advertising and draining from TV. Since them, what companies have managed to actually make money on that scale?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Over on Hacker News they are talking about the failure of Silicon Valley Bank, and it’s illiquid long dated treasuries.

With the rapid rise in internet rates, almost all the long dated debt over the last 2 decades have taken a HUGE haircut, so suddenly many banks and such will be under capitalized and the Treasury market is much less liquid.

Couple that with debt ceiling shenanigans and possible China dumping UST as political stunt or even prelude to Taiwan attack, and the US could suddenly have no way to pay its bills and could collapse.

Surprised more ppl not talking about SVB…..

Well it’s a west coast startup focused thing, so it’s crisis seems contained. But the root problem with the mark to market drop of long date treasuries is a wider potential problem.

This looks like a total over reaction. SVB looks solid. This is a minor not major issue for other banks.

FDIC disagrees.

https://www.fdic.gov/news/press-releases/2023/pr23016.html

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Over on Hacker News they are talking about the failure of Silicon Valley Bank, and it’s illiquid long dated treasuries.

With the rapid rise in internet rates, almost all the long dated debt over the last 2 decades have taken a HUGE haircut, so suddenly many banks and such will be under capitalized and the Treasury market is much less liquid.

Couple that with debt ceiling shenanigans and possible China dumping UST as political stunt or even prelude to Taiwan attack, and the US could suddenly have no way to pay its bills and could collapse.

Surprised more ppl not talking about SVB…..

DP. Same here. And I’m not even surprised, as someone who worked at SVB for a year. That place was ran so terribly bad, it’s no real surprise it’s falling apart.

Considering how inept so many VC firms can be (see Sequoia love letter to SBF https://web.archive.org/web/20221027180943/https://www.sequoiacap.com/article/sam-bankman-fried-spotlight/), and all the copycat startups funded by every VC firm, there is a certain amount of emperor has no clothes in tech….

Google and FB were legit money makers, basically inventing online advertising and draining from TV. Since them, what companies have managed to actually make money on that scale?

I've seen some arguments thrown out that SVB is so systemically necessary for the tech sector that there is going to be a "too big to fail" bailout. Guess the gov is going to need to prop up crypto in order to save the economy.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Over on Hacker News they are talking about the failure of Silicon Valley Bank, and it’s illiquid long dated treasuries.

With the rapid rise in internet rates, almost all the long dated debt over the last 2 decades have taken a HUGE haircut, so suddenly many banks and such will be under capitalized and the Treasury market is much less liquid.

Couple that with debt ceiling shenanigans and possible China dumping UST as political stunt or even prelude to Taiwan attack, and the US could suddenly have no way to pay its bills and could collapse.

Surprised more ppl not talking about SVB…..

Well it’s a west coast startup focused thing, so it’s crisis seems contained. But the root problem with the mark to market drop of long date treasuries is a wider potential problem.

This looks like a total over reaction. SVB looks solid. This is a minor not major issue for other banks.

FDIC disagrees.

https://www.fdic.gov/news/press-releases/2023/pr23016.html

18th largest US Bank??? Is that right??

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Over on Hacker News they are talking about the failure of Silicon Valley Bank, and it’s illiquid long dated treasuries.

With the rapid rise in internet rates, almost all the long dated debt over the last 2 decades have taken a HUGE haircut, so suddenly many banks and such will be under capitalized and the Treasury market is much less liquid.

Couple that with debt ceiling shenanigans and possible China dumping UST as political stunt or even prelude to Taiwan attack, and the US could suddenly have no way to pay its bills and could collapse.

Surprised more ppl not talking about SVB…..

DP. Same here. And I’m not even surprised, as someone who worked at SVB for a year. That place was ran so terribly bad, it’s no real surprise it’s falling apart.

Considering how inept so many VC firms can be (see Sequoia love letter to SBF https://web.archive.org/web/20221027180943/https://www.sequoiacap.com/article/sam-bankman-fried-spotlight/), and all the copycat startups funded by every VC firm, there is a certain amount of emperor has no clothes in tech….

Google and FB were legit money makers, basically inventing online advertising and draining from TV. Since them, what companies have managed to actually make money on that scale?

I've seen some arguments thrown out that SVB is so systemically necessary for the tech sector that there is going to be a "too big to fail" bailout. Guess the gov is going to need to prop up crypto in order to save the economy.

Most startups use them as their primary bank, since they accept shares as collateral in loans etc. it could seize up cash flows since most startups were above FDIC limit.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Over on Hacker News they are talking about the failure of Silicon Valley Bank, and it’s illiquid long dated treasuries.

With the rapid rise in internet rates, almost all the long dated debt over the last 2 decades have taken a HUGE haircut, so suddenly many banks and such will be under capitalized and the Treasury market is much less liquid.

Couple that with debt ceiling shenanigans and possible China dumping UST as political stunt or even prelude to Taiwan attack, and the US could suddenly have no way to pay its bills and could collapse.

Surprised more ppl not talking about SVB…..

DP. Same here. And I’m not even surprised, as someone who worked at SVB for a year. That place was ran so terribly bad, it’s no real surprise it’s falling apart.

Considering how inept so many VC firms can be (see Sequoia love letter to SBF https://web.archive.org/web/20221027180943/https://www.sequoiacap.com/article/sam-bankman-fried-spotlight/), and all the copycat startups funded by every VC firm, there is a certain amount of emperor has no clothes in tech….

Google and FB were legit money makers, basically inventing online advertising and draining from TV. Since them, what companies have managed to actually make money on that scale?

I've seen some arguments thrown out that SVB is so systemically necessary for the tech sector that there is going to be a "too big to fail" bailout. Guess the gov is going to need to prop up crypto in order to save the economy.

Bunch of wealthy tech companies fold is exactly what Fed wants to cool economy. BigTech will be fine.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Over on Hacker News they are talking about the failure of Silicon Valley Bank, and it’s illiquid long dated treasuries.

With the rapid rise in internet rates, almost all the long dated debt over the last 2 decades have taken a HUGE haircut, so suddenly many banks and such will be under capitalized and the Treasury market is much less liquid.

Couple that with debt ceiling shenanigans and possible China dumping UST as political stunt or even prelude to Taiwan attack, and the US could suddenly have no way to pay its bills and could collapse.

Surprised more ppl not talking about SVB…..

Well it’s a west coast startup focused thing, so it’s crisis seems contained. But the root problem with the mark to market drop of long date treasuries is a wider potential problem.

This looks like a total over reaction. SVB looks solid. This is a minor not major issue for other banks.

FDIC disagrees.

https://www.fdic.gov/news/press-releases/2023/pr23016.html

wowza.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Over on Hacker News they are talking about the failure of Silicon Valley Bank, and it’s illiquid long dated treasuries.

With the rapid rise in internet rates, almost all the long dated debt over the last 2 decades have taken a HUGE haircut, so suddenly many banks and such will be under capitalized and the Treasury market is much less liquid.

Couple that with debt ceiling shenanigans and possible China dumping UST as political stunt or even prelude to Taiwan attack, and the US could suddenly have no way to pay its bills and could collapse.

Surprised more ppl not talking about SVB…..

Well it’s a west coast startup focused thing, so it’s crisis seems contained. But the root problem with the mark to market drop of long date treasuries is a wider potential problem.

It’s not just some small west coast startup bank. It’s like the 14th biggest bank in the US. FDIC got involved with it this morning and shut them down.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Over on Hacker News they are talking about the failure of Silicon Valley Bank, and it’s illiquid long dated treasuries.

With the rapid rise in internet rates, almost all the long dated debt over the last 2 decades have taken a HUGE haircut, so suddenly many banks and such will be under capitalized and the Treasury market is much less liquid.

Couple that with debt ceiling shenanigans and possible China dumping UST as political stunt or even prelude to Taiwan attack, and the US could suddenly have no way to pay its bills and could collapse.

Surprised more ppl not talking about SVB…..

Well it’s a west coast startup focused thing, so it’s crisis seems contained. But the root problem with the mark to market drop of long date treasuries is a wider potential problem.

It’s not just some small west coast startup bank. It’s like the 14th biggest bank in the US. FDIC got involved with it this morning and shut them down.

This is a huge deal.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Over on Hacker News they are talking about the failure of Silicon Valley Bank, and it’s illiquid long dated treasuries.

With the rapid rise in internet rates, almost all the long dated debt over the last 2 decades have taken a HUGE haircut, so suddenly many banks and such will be under capitalized and the Treasury market is much less liquid.

Couple that with debt ceiling shenanigans and possible China dumping UST as political stunt or even prelude to Taiwan attack, and the US could suddenly have no way to pay its bills and could collapse.

Surprised more ppl not talking about SVB…..

Well it’s a west coast startup focused thing, so it’s crisis seems contained. But the root problem with the mark to market drop of long date treasuries is a wider potential problem.

It’s not just some small west coast startup bank. It’s like the 14th biggest bank in the US. FDIC got involved with it this morning and shut them down.

This is a huge deal.

+1
I don't know what all the implications are, but it's definitely a big deal.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Over on Hacker News they are talking about the failure of Silicon Valley Bank, and it’s illiquid long dated treasuries.

With the rapid rise in internet rates, almost all the long dated debt over the last 2 decades have taken a HUGE haircut, so suddenly many banks and such will be under capitalized and the Treasury market is much less liquid.

Couple that with debt ceiling shenanigans and possible China dumping UST as political stunt or even prelude to Taiwan attack, and the US could suddenly have no way to pay its bills and could collapse.

Surprised more ppl not talking about SVB…..

Well it’s a west coast startup focused thing, so it’s crisis seems contained. But the root problem with the mark to market drop of long date treasuries is a wider potential problem.

It’s not just some small west coast startup bank. It’s like the 14th biggest bank in the US. FDIC got involved with it this morning and shut them down.

This is a huge deal.

+1
I don't know what all the implications are, but it's definitely a big deal.

Second largest bank failures in US history.

https://en.wikipedia.org/wiki/List_of_largest_U.S._bank_failures

[Anonymous]

Anonymous wrote:the politics on this thread belongs in the politics forum.

meanwhile, the collapse of SVB and silvergate is happening right now, and the risk of contagion seems real.

Anything is possible, but it seems unlikely. As someone who was intimately involved in the stuff at the heart of the financial crisis, at least so far I don’t see the kinds of unrecognized systemic interconnections that were at play there. Banking is much more highly regulated now than it was then. Guess we’ll see.

[Anonymous]

Anonymous wrote:

Anonymous wrote:the politics on this thread belongs in the politics forum.

meanwhile, the collapse of SVB and silvergate is happening right now, and the risk of contagion seems real.

Anything is possible, but it seems unlikely. As someone who was intimately involved in the stuff at the heart of the financial crisis, at least so far I don’t see the kinds of unrecognized systemic interconnections that were at play there. Banking is much more highly regulated now than it was then. Guess we’ll see.

6 of largest 10 companies are tech companies:

https://www.electronicsandyou.com/blog/us-top-10-companies-by-market-cap.html

A lot of revenue for tech companies come from VC backed startups -- they spend their money on ads, cloud storage, cloud computing, etc

All of that stops. Probably startup CEOs stop buying Teslas too

[Anonymous]

This is a huge deal.
+1
I don't know what all the implications are, but it's definitely a big deal.

In short the bank will open Monday and account holders will have access to their balances up $250K that the FDIC insured. Monies over that 250K in limbo while regulators wrap up the banks business and sell assets. Eventually those customers will receive part of their account balances but when and hoe much are up in the air.

The major implication in all this is there us going to be a number of business, particularly the tech startups they catered to, that are going to have just $250K on Monday morning to try to stay afloat on.

[Anonymous]

SVB is not just a west coast problem. I’ve worked with 10 tech companies in the DC region and all use SVB. This is going to be detrimental to so many that don’t get a paycheck next week.