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My take: 1. Some mighty people/companies will bail out all depositors as this would cause a chain effect damaging the whole USA innovation. 2. Still, the cons

My take: 1. Some mighty people/companies will bail out all depositors as this would cause a chain effect damaging the whole USA innovation. 2. Still, the consequences will be grim as many startups will lose access to venture debt and need to do layoff quickly.

TaylorGood 4y ago
A friends AI startup already laid off 30 to control the bleed as their working capital was at SVB.
- lovich 4y ago
  They laid off 30 people in less than 24 hours of this announcement? That sounds like those people were already getting laid off and this was a convenient cover
UncleOxidant 4y ago
> 1. Some mighty people/companies will bail out all depositors Yeah, I'm sure Elon Musk can just write a check to cover this... oh, wait. Seriously, who do you think would have the capital to swoop in here and cover something north of $170B in shortfall? Especially right now given that money is pretty tight everywhere.
- celestialcheese 4y ago
  Where are you getting 170b in shortfall?
  - UncleOxidant 4y ago
    In one of the other threads discussing this SVB was said to have ~$200B in assets, 93% of which were not covered by FDIC. That actually comes out to $186B.
- jakozaur 4y ago
  The shortfall is much smaller. The challenge is $80Bln mortgage-backed securities, which they likely have to sell at a 20-30% markdown and cover that.
  - woeirua 4y ago
    This is the real question. How much are those MBS worth on the open market? Their value decreases every day as the fed keeps raising rates. I don't think anyone can really say what kind of hole SVB might be in right now.
- fairity 4y ago
  Once its becomes more clear how much SVB assets can be sold for and along what time frame, there will be plenty of firms willing to either: 1) purchase receivership certificates at a discount to expected value 2) issue bridge loans to cover the expected value of receivership certificates. It's not a bail out in the sense of free money. It's a bail out in the sense of a short term loan, just like after the GFC.

TaylorGood 4y ago

A friends AI startup already laid off 30 to control the bleed as their working capital was at SVB.

lovich 4y ago
They laid off 30 people in less than 24 hours of this announcement? That sounds like those people were already getting laid off and this was a convenient cover

UncleOxidant 4y ago

> 1. Some mighty people/companies will bail out all depositors Yeah, I'm sure Elon Musk can just write a check to cover this... oh, wait. Seriously, who do you think would have the capital to swoop in here and cover something north of $170B in shortfall? Especially right now given that money is pretty tight everywhere.

celestialcheese 4y ago
Where are you getting 170b in shortfall?
- UncleOxidant 4y ago
  In one of the other threads discussing this SVB was said to have ~$200B in assets, 93% of which were not covered by FDIC. That actually comes out to $186B.
jakozaur 4y ago
The shortfall is much smaller. The challenge is $80Bln mortgage-backed securities, which they likely have to sell at a 20-30% markdown and cover that.
- woeirua 4y ago
  This is the real question. How much are those MBS worth on the open market? Their value decreases every day as the fed keeps raising rates. I don't think anyone can really say what kind of hole SVB might be in right now.
fairity 4y ago
Once its becomes more clear how much SVB assets can be sold for and along what time frame, there will be plenty of firms willing to either: 1) purchase receivership certificates at a discount to expected value 2) issue bridge loans to cover the expected value of receivership certificates. It's not a bail out in the sense of free money. It's a bail out in the sense of a short term loan, just like after the GFC.