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SVB collapse had zero to do with crypto. You must not have read any of the news - it was a classic bank run.

by monero-xmr 4y ago

etc-hosts 4y ago
I am not convinced this is true.
- aardvarkr 4y ago
  Cite your sources or go away with your FUD
  - arcanemachiner 4y ago
    People are allowed to have opinions.
- geuis 4y ago
  The state of your conviction has little to do with the widely reported truth of the actual state of matters.
- monero-xmr 4y ago
  Circle was 1% of SVB’s assets. First there was a run on the (traditional, regulated) SVB because VCs caught a whiff of desperation and told all their portfolio companies to exit. Next came the run on USDC because $3 billion was locked inside SVB. Contagion spreading to non-mega banks because the federal government told them to buy “risk free” treasuries and mortgage backed securities. Rates go up and suddenly if they need cash the bonds must be sold at a loss. To blame a problem caused by central banking on crypto is absurdity to the highest level.
- afavour 4y ago
  > Thursday, 9 AM: in one chat with 200+ tech founders (most in the Bay Area), questions about SVB start to show up. > 10 AM: some suggest getting the money out of SVB for safety. Only upside. No downside. https://twitter.com/torrenegra/status/1634573234187407369 https://twitter.com/torrenegra/status/1634573234187407369 Anecdote to be sure but it's fascinating to read the account of people organising a bank run.
  - PheonixPharts 4y ago
    I've pointed this out a few times in other threads but it's worth repeating. SVB had just recently reported that they had no liquidity issues and did not foresee any need to sell any of their assets at a loss. Then Thursday morning the announced that they had, in fact, liquidated some of their assets at a loss. Your bank is supposed to be zero risk and essentially as good as cash. Any sign that your bank might have liquidity problems significantly raises that risk from 0. In that case it is beyond prudent to try to move out of that bank fast. I love a good conspiracy theory as much as the next, and wouldn't be surprised if there were ill intentions behind some of those meetings. However this bank run was rational and does not need to be explained away by any conspiracy to organize a bank run.
jgalt212 4y ago
If SVB hedged its interest rate risks, it would be a going concern today.
- ozi 4y ago
  You can't hedge something that is likely to happen in a cost efficient way. Yield curves are predictable.
  - oarabbus_ 4y ago
    Huh? A bond portfolio always includes a significant amount of short-dated maturities to provide liquidity. SVBs decided to take on much more risk and forego short-maturations for extra yield. Yield chasing blows up overleveraged entity, nothing new here really, except usually people rightfully criticize the yield chasers/overleveragers for being greedy; this time people are acting like SVB was a victim of the Fed instead of their own extreme incompetence.
JumpCrisscross 4y ago
> SVB collapse had zero to do with crypto Had Silvergate not collapsed, SVB's balance sheet weakness may not have prompted a run.
- monero-xmr 4y ago
  And if the Fed had backstopped Silvergate rather than letting it fail, then SVB wouldn’t have needed the same thing (which did get the bailout). Turtles all the way down
  - FormerBandmate 4y ago
    Silvergate is a winddown the same way SVB and Signature will end up being. No one loses their money, even stockholders get some money. It was just more structured
stephen_g 4y ago
There was only a bank run once people worked out they were insolvent. They wouldn’t have been able to survive unless interest rates went back down without much net deposit change in the meantime…
- deepsun 4y ago
  > They wouldn’t have been able to survive Or would. They lost only <2B so far, maybe they could earn it back, same way as banks make money. It's not like they were married to their bonds assets, they could do a lot of things with those.

SVB collapse had zero to do with crypto. You must not have read any of the news - it was a classic bank run.

etc-hosts 4y ago

I am not convinced this is true.

aardvarkr 4y ago
Cite your sources or go away with your FUD
- arcanemachiner 4y ago
  People are allowed to have opinions.
geuis 4y ago
The state of your conviction has little to do with the widely reported truth of the actual state of matters.
monero-xmr 4y ago
Circle was 1% of SVB’s assets. First there was a run on the (traditional, regulated) SVB because VCs caught a whiff of desperation and told all their portfolio companies to exit. Next came the run on USDC because $3 billion was locked inside SVB. Contagion spreading to non-mega banks because the federal government told them to buy “risk free” treasuries and mortgage backed securities. Rates go up and suddenly if they need cash the bonds must be sold at a loss. To blame a problem caused by central banking on crypto is absurdity to the highest level.
afavour 4y ago
> Thursday, 9 AM: in one chat with 200+ tech founders (most in the Bay Area), questions about SVB start to show up. > 10 AM: some suggest getting the money out of SVB for safety. Only upside. No downside. https://twitter.com/torrenegra/status/1634573234187407369 https://twitter.com/torrenegra/status/1634573234187407369 Anecdote to be sure but it's fascinating to read the account of people organising a bank run.
- PheonixPharts 4y ago
  I've pointed this out a few times in other threads but it's worth repeating. SVB had just recently reported that they had no liquidity issues and did not foresee any need to sell any of their assets at a loss. Then Thursday morning the announced that they had, in fact, liquidated some of their assets at a loss. Your bank is supposed to be zero risk and essentially as good as cash. Any sign that your bank might have liquidity problems significantly raises that risk from 0. In that case it is beyond prudent to try to move out of that bank fast. I love a good conspiracy theory as much as the next, and wouldn't be surprised if there were ill intentions behind some of those meetings. However this bank run was rational and does not need to be explained away by any conspiracy to organize a bank run.

jgalt212 4y ago

If SVB hedged its interest rate risks, it would be a going concern today.

ozi 4y ago
You can't hedge something that is likely to happen in a cost efficient way. Yield curves are predictable.
- oarabbus_ 4y ago
  Huh? A bond portfolio always includes a significant amount of short-dated maturities to provide liquidity. SVBs decided to take on much more risk and forego short-maturations for extra yield. Yield chasing blows up overleveraged entity, nothing new here really, except usually people rightfully criticize the yield chasers/overleveragers for being greedy; this time people are acting like SVB was a victim of the Fed instead of their own extreme incompetence.

JumpCrisscross 4y ago

> SVB collapse had zero to do with crypto Had Silvergate not collapsed, SVB's balance sheet weakness may not have prompted a run.

monero-xmr 4y ago
And if the Fed had backstopped Silvergate rather than letting it fail, then SVB wouldn’t have needed the same thing (which did get the bailout). Turtles all the way down
- FormerBandmate 4y ago
  Silvergate is a winddown the same way SVB and Signature will end up being. No one loses their money, even stockholders get some money. It was just more structured

stephen_g 4y ago

There was only a bank run once people worked out they were insolvent. They wouldn’t have been able to survive unless interest rates went back down without much net deposit change in the meantime…

deepsun 4y ago
> They wouldn’t have been able to survive Or would. They lost only <2B so far, maybe they could earn it back, same way as banks make money. It's not like they were married to their bonds assets, they could do a lot of things with those.