6 ms·

See, that's what I started thinking as well. Except banks aren't startups. Banks actually make more money during high interest environment, and they don't need

See, that's what I started thinking as well. Except banks aren't startups. Banks actually make more money during high interest environment, and they don't need to have increasing deposits to stay alive (that's wrong projection from crypto grifters). If they had cash injection, they could still plan for reduced client deposits. They don't need their deposit base to grow to stay alive. That's startups projections.

HDThoreaun 4y ago
> Banks actually make more money during high interest environment SVB was not in a position to capitalize on raising rates. All their money was stuck in those low rate bonds and mbs's. If they want to get in on those higher rates they would need their deposits to increase, but they have been and will continue to decrease. They tried to raise money, no one gave them any because their book was underwater.
- machina_ex_deus 4y ago
  Again you're confusing bank and crypto. They wouldn't need to have their deposits increase. They would need to increase their capital. They weren't underwater before the bank run, they were undercapitalized. Which would mean that whoever would enter, would get a big chunk of their stock, but he would still have a good deal. Banks don't need increasing or decreasing deposits. They need stable and predictable deposits. They know how fast you burn cash, so they know what flows to expect from you and how much of your money they get to invest and for what duration. SVB failed to predict the Fed, but there's no way they survived this long without knowing how to plan around cash burning startups, that's their bread and butter. What made finding a buyer impossible is that their deposit base showed their unpredictability. And they have done tremendous damage to startups and banking relations after this. Finding banks is going to be much harder as a startup after this debacle, whether you're part of this bank run or not.
  - theironhammer 4y ago
    Was it Peter Thiel who started the bank run? "The bank run that led to SVB’s collapse was allegedly started by tech tycoon and Republican political donor Peter Thiel. After SVB’s collapse, journalists and critics have shifted their attention to Thiel, accusing him of pressuring companies to stop funding the bank. It is believed that his actions were the first to ignite the bank run, which prompted California regulators to step in." https://lifestyleug.com/peter-thiel-byrne-hobarts-newsletter-svb-collapse/ https://lifestyleug.com/peter-thiel-byrne-hobarts-newsletter...

HDThoreaun 4y ago

> Banks actually make more money during high interest environment SVB was not in a position to capitalize on raising rates. All their money was stuck in those low rate bonds and mbs's. If they want to get in on those higher rates they would need their deposits to increase, but they have been and will continue to decrease. They tried to raise money, no one gave them any because their book was underwater.

machina_ex_deus 4y ago
Again you're confusing bank and crypto. They wouldn't need to have their deposits increase. They would need to increase their capital. They weren't underwater before the bank run, they were undercapitalized. Which would mean that whoever would enter, would get a big chunk of their stock, but he would still have a good deal. Banks don't need increasing or decreasing deposits. They need stable and predictable deposits. They know how fast you burn cash, so they know what flows to expect from you and how much of your money they get to invest and for what duration. SVB failed to predict the Fed, but there's no way they survived this long without knowing how to plan around cash burning startups, that's their bread and butter. What made finding a buyer impossible is that their deposit base showed their unpredictability. And they have done tremendous damage to startups and banking relations after this. Finding banks is going to be much harder as a startup after this debacle, whether you're part of this bank run or not.
- theironhammer 4y ago
  Was it Peter Thiel who started the bank run? "The bank run that led to SVB’s collapse was allegedly started by tech tycoon and Republican political donor Peter Thiel. After SVB’s collapse, journalists and critics have shifted their attention to Thiel, accusing him of pressuring companies to stop funding the bank. It is believed that his actions were the first to ignite the bank run, which prompted California regulators to step in." https://lifestyleug.com/peter-thiel-byrne-hobarts-newsletter-svb-collapse/ https://lifestyleug.com/peter-thiel-byrne-hobarts-newsletter...