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> Let's be honest, very few of the VCs calling their founders telling them to pull their accounts had any clue about what "held-to-maturity" vs "available for s
by twblalock 4y ago
> Let's be honest, very few of the VCs calling their founders telling them to pull their accounts had any clue about what "held-to-maturity" vs "available for sell" meant in the context of SVB's investment portfolio
Uh, the fact that they knew what it meant was why they freaked out. They knew the bank was not liquid.
Plus you don't need to be a finance professor to know that if a bank is having trouble doing normal bank stuff like processing transactions, something is wrong. And a lot of people were going to notice that in the next few days. If it wasn't Thiel it would have been someone else the next day realizing that the bank was screwed.
Don't blame people for starting a bank run. Blame the bank for making a run the rational thing to do for anyone who cares about their money.
- zippergz 4y agoNo bank is infinitely liquid. Processing transactions at the volume that happened during the run is the opposite of "normal bank stuff." Neither of those points make any sense, and they reinforce the point the original poster was making. If you think that a bank is in trouble because they can't handle a huge percentage of their depositors pulling out their money, you don't understand how banks work.
- twblalock 4y agoThe bank was having trouble processing routine transactions for Thiel's fund. That is definitely normal bank stuff. The bank was illiquid to the extent that it was impacting day to day operations. The events are described here: https://news.yahoo.com/thiel-founders-fund-withdrew-millions-005223787.html https://news.yahoo.com/thiel-founders-fund-withdrew-millions...