OT: Stock and Investment Talk

[Rutgers Chris]

How do you think the SVB story will play out? Fed/gov bailout or someone buying it?

Very good summary here including what happened, where to point blame and the downstream effects. They advocate for a bailout similar to TARP where if done correctly the gov’t can turn a profit and not stifle innovation in tech startups.

E119: Silicon Valley Bank implodes: startup extinction event, contagion risk, culpability, and more

Podcast Episode · All-In with Chamath, Jason, Sacks & Friedberg · 03/11/2023 · 1h 29m

podcasts.apple.com

 

[RUDead]

How would you know that?

Were you part of the interview process or did you know the person and other candidates that were interested in the position?

I am really interested in the history and background of the hire and especially who was passed up.

It's all over twitter:

 

[T2Kplus20]

Very good summary here including what happened, where to point blame and the downstream effects. They advocate for a bailout similar to TARP where if done correctly the gov’t can turn a profit and not stifle innovation in tech startups.

E119: Silicon Valley Bank implodes: startup extinction event, contagion risk, culpability, and more

Podcast Episode · All-In with Chamath, Jason, Sacks & Friedberg · 03/11/2023 · 1h 29m

podcasts.apple.com

Thanks for posting!

 

[Morrischiano]

It's all over twitter:

I would hit that....

 

[RUinPinehurst]

I would hit that....

She'd hit you back. She "likes" women. Capisce?

 

[Barnaby&Neill]

It's all over twitter:

Bro...that's their UK subsidiary. Kim Olson was their Chief Risk Officer (and as I mentioned the chief risk officer role was vacant for most the last year).

 

[tom1944]

I saw this person as the Chief Risk Officer

SVB Hires Kim Olson as Chief Risk Officer

SVB today announced the appointment of Kim Olson as Chief Risk Officer (CRO). In this role, Olson will lead the Risk function and team, developing and maintaining SVB’s risk management framework and a culture of risk management across the company.

www.svb.com

 

[tom1944]

It's all over twitter:

Is Twitter anything more than people spreading rumors?

I dont think I trust it as a source even though it is right some of the time.

I would need other sources.

 

[redking]

It's all over twitter:

Not a good look, but there may be more to the story in the future. This reminds me of that firm with Chief Risk Officer Sarah Robertson who tried to warn her colleagues, Jared Cohen and John Tuld. But they didn’t listen.

 

[tom1944]

Not a good look, but there may be more to the story in the future. This reminds me of that firm with Chief Risk Officer Sarah Robertson who tried to warn her colleagues, Jared Cohen and John Tuld. But they didn’t listen.

Also, not the Chief Risk Officer

 

[rutgersdave]

I saw this person as the Chief Risk Officer

SVB Hires Kim Olson as Chief Risk Officer

SVB today announced the appointment of Kim Olson as Chief Risk Officer (CRO). In this role, Olson will lead the Risk function and team, developing and maintaining SVB’s risk management framework and a culture of risk management across the company.

www.svb.com

The other person is in the UK. Another political trick Twitter post.

Silicon Valley Bank had no official chief risk officer for 8 months while the VC market was spiraling

SVB's former CRO stepped down in April 2022, and the next CRO was appointed earlier this year, according to the bank's regulatory filings.

fortune.com

Laura Izurieta stepped down from her role as CRO of SVB Financial Group in April 2022, and formally departed the company in October, according to an SVB proxy filing. The bank appointed her permanent successor as CRO, Kim Olson, in January of this year.

 

[RUDead]

In summary, the former CRO, current CRO and the UK subsidiary CRO are all diversity hires. 😀

 

[RUinPinehurst]

Re: SVB's CRO.... “Kim’s deep and multi-faceted financial services experience as a senior risk leader and former regulator and bank supervisor positions her perfectly to actively manage SVB’s financial and non-financial risks and to build and scale the firm’s risk management capabilities through our next phase of growth,” said Greg Becker, president and CEO of SVB.

Oops.... That "next phase of growth" took a hell of a turn.

BTW, Becker is a grad of Indiana U.
Go Hoosiers!!!

 

[Barnaby&Neill]

BTW, Becker is a grad of Indiana U.
Go Hoosiers!!!

Would be kind of funny if he was at the Big Ten tournament. IIRC, Jimmy Cayne only reluctantly left a bridge tournament to manage Bear Stearns downfall.

 

[RUinPinehurst]

From Axios re: SVB:

"Silicon Valley Bank's customers withdrew $42 billion from their accounts on Thursday. That's $4.2 billion an hour, or more than $1 million per second for ten hours straight.

• Why it matters: To put that in context, the previous largest bank run in modern U.S. history took place at Washington Mutual bank in 2008, and totaled $16.7 billion over the course of 10 days. That's a mere trickle in comparison to what was seen at SVB, Axios' Felix Salmon writes.
• Above: Compare SVB's wild ride to the KBW Bank index, which tracks 24 bank stocks, including SVB.

🖼️ The big picture: Almost none of SVB's deposits, by value, were FDIC insured — its customers were overwhelmingly corporations with much more than $250,000 in the bank.

• Until 2012, an obscure Fed program insured such corporate accounts, but that expired when the global financial crisis was deemed to be over.

🧠 Between the lines: Most of SVB's customers are just one degree of separation away from a small group of venture capitalists who started making it clear on Thursday that they thought pulling cash from SVB was prudent.

• By yesterday morning, the amount of cash left in SVB's coffers, per California's department of financial innovation and protection, was negative, to the tune of $958 million. SVB itself was insolvent.

The bottom line: No bank can withstand that kind of outflow in a single day. That's why SVB is now a ward of the state, desperately hoping to find a buyer before Monday."

 

[rutgersdave]

In summary, the former CRO, current CRO and the UK subsidiary CRO are all diversity hires. 😀

Anytime a female is hired then it’s a diversity hire. Hey, the CEO is a white male and he fully responsible for the operation. He changed the rules for cash out and cashed out $3.5 million before the collapse.

Silicon Valley Bank CEO sold $3.5M in shares just two weeks before collapse

Two of Silicon Valley Bank’s top chiefs dumped millions of dollars worth of stock just two weeks before the firm collapsed Friday, records show.

nypost.com

 

[RUDead]

Anytime a female is hired then it’s a diversity hire. Hey, the CEO is a white male and he fully responsible for the operation. He changed the rules for cash out and cashed out 2.5 million right in January.

In their defense nobody listens to the CRO anyway. But to take that job in January knowing their financial position isn't very smart.

Those guys that were running the bank and selling stock in the last few weeks are in trouble.

I also just read that hedge funds are offering 60 cents on the dollar for peoples deposits.

 

[RUfinally2008]

Only on people earning more than $1M, also this will probably never pass.

Your right it won't pass, but it shows you how dumb the people that are advising El Presidente,truly are.Lol

 

[tom1944]

Your right it won't pass, but it shows you how dumb the people that are advising El Presidente,truly are.Lol

You should read what you write before you post.

It is "you are". You continually post your even after people mention it. Did you take 8th grade grammar?

I only bring it up because it is laughable that you could write "it shows how dumb the people are" while continuing making an 8th grade (or lower) grammar error.

 

[RUTGERS95]

Sure. But a double-whammy dynamic is likely to emerge as, in addition to mismanaged financial institutions like SVB, more than a few micro caps (particularly in the tech and biotech space) will be cut off from funding and will be unable to handle increased rates if their existing debt is restructured. Zombies going to be decapitated....

but again, that's not a credit issue and vastly different than what occurred in 1907 and 2008. To be frank, there better not be a bailout as what happened there was hubris, terrible management of liquidity and debt portfolios, and concentration issues.

Glass Stegal repeal was wrong, wish they'd put it back. Get's rid of too big to fail, creates jobs, easier management etc. Let the banks form coops to bid on large contracts if needed. Mandatory loan allowances and getting rid of 0% sweep moves would be a start.

let it fail, let them wallow, let them learn a lesson. Risk needs to be priced into the system

 

[RUfromSoCal?]

I saw this person as the Chief Risk Officer

SVB Hires Kim Olson as Chief Risk Officer

SVB today announced the appointment of Kim Olson as Chief Risk Officer (CRO). In this role, Olson will lead the Risk function and team, developing and maintaining SVB’s risk management framework and a culture of risk management across the company.

www.svb.com

Harvard....

she's clearly smarter than the rest of us...

 

[RUTGERS95]

How do you think the SVB story will play out? Fed/gov bailout or someone buying it?

they'll sell it

going to have a hard time convincing people that 590mm to oprah is good for the taxpayer. Her advisors should be fired of course

 

[RUfromSoCal?]

From Axios re: SVB:

"Silicon Valley Bank's customers withdrew $42 billion from their accounts on Thursday. That's $4.2 billion an hour, or more than $1 million per second for ten hours straight.

• Why it matters: To put that in context, the previous largest bank run in modern U.S. history took place at Washington Mutual bank in 2008, and totaled $16.7 billion over the course of 10 days. That's a mere trickle in comparison to what was seen at SVB, Axios' Felix Salmon writes.
• Above: Compare SVB's wild ride to the KBW Bank index, which tracks 24 bank stocks, including SVB.

🖼️ The big picture: Almost none of SVB's deposits, by value, were FDIC insured — its customers were overwhelmingly corporations with much more than $250,000 in the bank.

• Until 2012, an obscure Fed program insured such corporate accounts, but that expired when the global financial crisis was deemed to be over.

🧠 Between the lines: Most of SVB's customers are just one degree of separation away from a small group of venture capitalists who started making it clear on Thursday that they thought pulling cash from SVB was prudent.

• By yesterday morning, the amount of cash left in SVB's coffers, per California's department of financial innovation and protection, was negative, to the tune of $958 million. SVB itself was insolvent.

The bottom line: No bank can withstand that kind of outflow in a single day. That's why SVB is now a ward of the state, desperately hoping to find a buyer before Monday."

so, a bunch of billionaires got theirs'......... and now they want joe-taxpayer to make it better...

we've been here before...........

 

[rutgersguy1]

SVB needed George Bailey lol. The Mr Potters are out in force.

Hedge funds offering to buy startup deposits stuck at Silicon Valley Bank, Semafor reports

Hedge funds are offering to buy startup deposits stranded at Silicon Valley Bank (SVB) for as little as 60 cents on the dollar, Semafor reported on Saturday, citing people familiar with the matter.

www.reuters.com

 

[jtung230]

The Fed is a major contributor to the Failing of SVB. The bank was locked into low yield longer term treasuries and had to sell them at a loss since rates went up, to cover the run on the bank's cash. It should be a warning signal to the Fed that more regional/small banks may fail with rising rates.

Terrible take. SVB should’ve mark to market on those securities. Those bonds were already down way before last week. This is just piss poor risk mgmt.

 

[jtung230]

LOL - Bears of the thread are on a rampage trying to justify Fed actions. Funny to watch. The Fed is stressing the banking system and it's starting to break.

#gameover

That’s the bears laughing. It’s #gameover. Better dump your leveraged funds.

 

[Joey Bags]

so, a bunch of billionaires got theirs'......... and now they want joe-taxpayer to make it better...

we've been here before...........

A large bank or consortium of banks may deem the systemic risk to outweigh acquiring SVB, leading to a purchase without a federal bailout. That would be the best outcome.

 

[jtung230]

LOL! Elon tweet.....open to buying SVB and adding digital banking services to Twitter. I guess this is an easy way to obtain a banking charter.

Should be a fun week! 😜

Someone is making another purchase while getting high. Love it. Go Elon, make the $4.20 bid.

 

[RUTGERS95]

It's all over twitter:

go woke go broke

 

[Goo]

This is chess not checkers people…

The power brokers wanted this bank collapse and would welcome more.

Now ask….why?

Think two, three years down the road.

What is the end game?

 

[T2Kplus20]

SVB needed George Bailey lol. The Mr Potters are out in force.

Hedge funds offering to buy startup deposits stuck at Silicon Valley Bank, Semafor reports

Hedge funds are offering to buy startup deposits stranded at Silicon Valley Bank (SVB) for as little as 60 cents on the dollar, Semafor reported on Saturday, citing people familiar with the matter.

www.reuters.com

Potter only offered 50 cents on the dollar! :)

 

[rutgersguy1]

Potter only offered 50 cents on the dollar! :)

I tend to think they may find a buyer tomorrow evening but we’ll see.

 

[T2Kplus20]

I tend to think they may find a buyer tomorrow evening but we’ll see.

Me too. Most of the big banks remember in detail what happened in 2008/2009. They have the power to end this right now.

 

[RUfinally2008]

You should read what you write before you post.

It is "you are". You continually post your even after people mention it. Did you take 8th grade grammar?

I only bring it up because it is laughable that you could write "it shows how dumb the people are" while continuing making an 8th grade (or lower) grammar error.

So the argument is my grammar, not who you voted for,and what he proposes, I get it. Next time use a red marker on my spelling,that always got my attention.What will it take to get you to see what's happening? You said it's only a political document, it won't pass, then why parade it out there? If it was anyone from across the aisle, you'd have a hissy fit. Oh snap, I hope I used "you'd" correctly.

 

[ScarletNut]

Terrible take. SVB should’ve mark to market on those securities. Those bonds were already down way before last week. This is just piss poor risk mgmt.

I don’t disagree. That’s why I didn’t say the Fed was the only contributor to the bank’s failure

 

[RUfromSoCal?]

Do they give awards for being really bad at your job?

 

[jtung230]

I don’t disagree. That’s why I didn’t say the Fed was the only contributor to the bank’s failure

sorry, Fed had nothing to do with it. They were investing short term deposits in long duration bonds. What could poss go wrong 🙄

 

[Morrischiano]

I’m shorting CNOB in the open

 

[Morrischiano]

sorry, Fed had nothing to do with it. They were investing short term deposits in long duration bonds. What could poss go wrong 🙄

I still don’t understand the genesis of the run though…did something come up in their last earnings call?

 

[jtung230]

I still don’t understand the genesis of the run though…did something come up in their last earnings call?

I didn’t follow it but it started with them trying to raise $2.25 billion “to shore up” balance sheet.