The Rose Garden and White House happenings: Listening to voters’ concerns
just as a reminder about some ancient history.
the only scandal here is that the R's wasted millions of taxpayer dollars to try and destroy a leading Democratic presidential candidate.
=============================================================
Ten investigations were conducted into the 2012 Benghazi attack,
six of these by Republican-controlled House committees. Problems were
identified with security measures at the Benghazi facilities, due to
poor decisions made by employees of the State Department's Bureau of Diplomatic Security, and specifically its director Eric Boswell, who resigned under pressure in December 2012.[1]
Despite numerous allegations against Obama administration officials of
scandal, cover-up and lying regarding the Benghazi attack and its
aftermath, none of the ten investigations found any evidence to support
those allegations.[2][3][4][5] The last of the investigation committees issued its final report and shut down in December 2016, one month after the 2016 presidential election
So, back to banking for a moment, now that Credit Suisse is in so much trouble, do we still think that SVB’s collapse is because they’re new, inexperienced and ‘woke’??? (As opposed to larger economic issues out in the real world)
One of the other, not-discussed matters I was wondering about is your sale to us of 8 wonky subs for an outrageous amount of$$$, that won’t be ready for delivery now until 2045.
i believe it’s the third time the price has gone up and date extended. And you’re selling us outdated tech.
mtierney said:
as far as the comment someone posted earlier that the Rose Garden is ignoring other current events, may I remind folks that I have always tried to keep extraneous and deflecting topics from my garden. A lot like weeding.
I like the way mtierney believes that she is the moderator of this thread and not just the porta-potty fire people come to gawk at.
Naive but cute.
ml1 said:
start ups didn't receive funds from SVB. They deposited their money there.
Loans weren’t the cause of SVB’s troubles, but they did total $74 billion at the end of 2022, roughly a third of the bank’s assets.
https://www.svb.com/newsroom/facts-at-a-glance/
According to PitchBook, about 20 percent of the loans were for start-ups through venture capital firms.
https://pitchbook.com/news/articles/svb-asset-sale-liquidation-fdic
DaveSchmidt said:
ml1 said:
start ups didn't receive funds from SVB. They deposited their money there.
Loans weren’t the cause of SVB’s troubles, but they did total $74 billion at the end of 2022, roughly a third of the bank’s assets.
https://www.svb.com/newsroom/facts-at-a-glance/
According to PitchBook, about 20 percent of the loans were for start-ups through venture capital firms.
https://pitchbook.com/news/articles/svb-asset-sale-liquidation-fdic
if the loans went through VC firms, I don't think that contradicts my point. Those VCs must have had assets to put up against the loans.
Would the SEC even allow a bank to act like a VC? I'm thinking no.
Additional info: SVB’s pitch for venture debt, “a loan designed for fast-growing investor-backed startups.”
DaveSchmidt said:
Additional info: SVB’s pitch for venture debt, “a loan designed for fast-growing investor-backed startups.”
Would the SEC even allow a bank to act like a VC? I'm thinking no.
drummerboy said:
Would the SEC even allow a bank to act like a VC? I'm thinking no.
I admire the way you take information. What I had more in mind, in this case, was its relevance to ml1’s statements about start-up loans, and whether SVB’s necessarily went through VC firms.
DaveSchmidt said:
Additional info: SVB’s pitch for venture debt, “a loan designed for fast-growing investor-backed startups.”
I need to write better. My overall point to mtierney was that SVB wasn't just handing out checks to startups. Even that loan product seems to require that startups already have private funding to secure the loans. So my point that they didn't go broke handing out money that wasn't collateralized is still valid, even if I'm too stupid about banking to know all the details.
Hey ridski,
I lived at 47 Pierson Rd. What would you say is a reasonable price for that house today? Yes, I know I’m off topic. Sorry. Just reading a NYT article.
We had a wonderfully clear explanation of the collapse, with a timeline and Twitter exchanges, on our ABC program Media Watch on Our Monday night. Media Watch is known for the clarity with which it examines reality contrasted with media presentations (including the ABC’s), and holding all forms of media to account for misrepresentation.
It’s quite clear that some notable SVB backers got the jitters for personal reasons and demanded their shares be sold sold off, starting the rapid run because some shareholder chat was shared on Twitter.
None of which answers how/why this panic throughout the week was allowed to grow and feed the unrest on your stock exchanges sufficiently to affect the investors/holdings of a Swiss banks.
Some more “clarity” from The Atlantic — or not…
YOU SHOULD BE OUTRAGED ABOUT SILICON VALLEY BANK
Average Americans should let their displeasure be known.
MARCH 16, 2023
You should be mad about the chaotic and swift collapse of Silicon Valley Bank.
If you are a customer of Silicon Valley Bank, you should be furious with its executives for their incompetent risk management and poor communications strategy. If you work in start-ups or the technology sector, you should be angry at the venture capitalists who spurred a bank run at SVB only to turn around and beg for Uncle Sam’s help with impudence.
Perhaps most of all, you should be furious with the American government—not for its creation and execution of a bailout to protect the broader financial sector, but because its help was needed in the first place. You should be mad at Congress for loosening regulations on medium-size banks like SVB five years ago. And you should be mad at the federal and state regulators who, as supervisors of the system, allowed this mess to happen.
Annie Lowrey: Silicon Valley Bank’s failure is now everyone’s problem
With the acute phase of the SVB debacle coming to a close, Congress and the country’s regulators have an opportunity to make the financial system safer—by insuring a wider range of deposits and restoring scrutiny to regional banks. The risk is that, knowing that the government will act as a backstop, bankers and investors will become more reckless, rather than less. And Congress needs answers from the Fed and the FDIC about why they were incompetent in heading off this crisis and had to scramble to fix things after the fact.
The SVB crisis was unusual in many ways. It did not involve a risky hedge fund or investment bank, but a plain old depository institution. It was caused not by leveraged bets on exotic derivatives, but by executives parking cash in some of the safest and most liquid instruments on earth. The precipitating event was not the slow accumulation of mortgage defaults or the sudden arrival of a deadly virus, but the Fed raising interest rates, something it does with perfect transparency (it holds a press conference every time it does it, for goodness’ sake). That makes the debacle all the more bewildering and galling—even if the cleanup ultimately costs the taxpayer not a dime, even if there is little to no financial fallout.
By last week, catastrophe may have been unpreventable. SVB had expanded rapidly during the COVID tech boom, as new depositors poured billions and billions of dollars into the bank. Unable to lend all that money out, its executives instead invested in simple government-backed or government-issued securities. Those securities, such as Treasury bonds, decline in value as interest rates rise. There are a number of ways to manage this kind of interest-rate risk; SVB’s managers did so incompetently. The red ink in their portfolio meant that the institution would struggle to make depositors whole if and when they wanted their money back. On a single day last week, panicked account holders demanded $42 billion. The bank went kaput.
The danger of such an event was obvious, at least to the green-eyeshade types in Washington and New York, as soon as the Fed began raising rates last year. Indeed, Martin Gruenberg of the FDIC described it in remarks in December: “The combination of a high level of longer-term asset maturities and a moderate decline in deposits underscores the risk that these unrealized losses could become actual losses should banks need to sell investments to meet liquidity needs.”
A number of analysts saw what was coming for SVB in particular, too. Raging Capital Ventures, an investment office, noted the bank’s catastrophic interest-rate problems in January, publicizing the findings on Twitter: “The bank would be functionally underwater if it were liquidated today.” Moody’s had been examining SVB for a downgrade. Both were working with data from public filings made by SVB’s corporate parent.
As Aaron Klein of the Brookings Institution has noted, the bank’s supervisors should have looked into other straightforward issues. The bank had become reliant on low-cost financing from a federal home-loan bank. Only a small sliver of SVB’s account holders were fully protected by the FDIC’s $250,000 deposit-insurance policy. Moreover, SVB had no chief risk officer for eight months last year—the year of the crypto crisis, the year that tech began to melt down. Many of the bank’s prototypical clients—venture capitalists, start-ups, and technology firms—were struggling and drawing down their accounts. And its chief executive officer had started cashing out his stock.
Read: Silicon Valley was unstoppable. Now it’s just a house of cards.
Of course, the country’s regulators would have been paying more attention but for Congress. In 2018, a bipartisan group of legislators gutted parts of Dodd-Frank, the regulatory-reform law passed after the 2008 financial crisis. Indeed, they specifically exempted midsize banks—like SVB—from certain stress tests and capital requirements, as those banks argued that they did not pose the same systemic risk as big banks did.
To stop any risk to the financial system, the Treasury, Fed, and White House this weekend agreed that the SVB crisis did pose a systemic risk. The response that they concocted over the weekend is competent, I suppose. It is a bailout, but one that won’t leave the taxpayer on the hook for anything. SVB’s equity investors got wiped out, and its executives have been fired. The government is protecting its account holders’ deposits and has ensured that there are no runs on other regional banks.
But the government should never have to use its emergency financial-stability tools to help save one crappily managed midsize bank. The FDIC should have shut SVB down days, even weeks, ago. The Fed system should have known that the bank was at risk of collapse and acted accordingly. No start-up should have faced the prospect of scrambling for cash or figuring out furloughs, just because it had a checking account at SVB. No midsize bank should have faced concerns that it might, too, face a liquidity crisis.
There’s no success story here. The complexity of financial regulations and the dullness of balance-sheet minutiae should not lull any American into misunderstanding what has happened. Nor should the lack of a broad meltdown make anyone feel confident. The bank failed. The government failed. Once again, the American people are propping up a financial system incapable of rendering itself safe.
That system might become even more cavalier in the future, knowing that the Fed will paper over problems on bank balance sheets and that public officials will not tolerate any risk to the deposit accounts that make payrolls. The risk is not that SVB is endangering the financial system. The risk is that incompetent supervision and a dearth of rules are.
GL2 said:
Hey ridski,
I lived at 47 Pierson Rd. What would you say is a reasonable price for that house today? Yes, I know I’m off topic. Sorry. Just reading a NYT article.
Not to worry, GL2, this thread can handle your query to Ridski. The Rose Garden is a porporri of comments, questions, answers, etc. We still manage to stay the course.
{finds a tunnel to scream into} { goes off to read local news, with morning mug of coffee}
mtierney said:
Not to worry, GL2, this thread can handle your query to Ridski. The Rose Garden is a porporri of comments, questions, answers, etc. We still manage to stay the course.
What would we do without you?
DaveSchmidt said:
drummerboy said:
Would the SEC even allow a bank to act like a VC? I'm thinking no.
I admire the way you take information. What I had more in mind, in this case, was its relevance to ml1’s statements about start-up loans, and whether SVB’s necessarily went through VC firms.
I admire the way you seem to think that because SVB had a product with the word "venture" in it, that this means that SVB "was acting like a VC firm" ( the whole point of this tangent).
ml1 has explained it twice how they're not.
mtierney said:
Some more “clarity” from The Atlantic — or not…
YOU SHOULD BE OUTRAGED ABOUT SILICON VALLEY BANK
Average Americans should let their displeasure be known.
MARCH 16, 2023
You should be mad about the chaotic and swift collapse of Silicon Valley Bank.
If you are a customer of Silicon Valley Bank, you should be furious with its executives for their incompetent risk management and poor communications strategy. If you work in start-ups or the technology sector, you should be angry at the venture capitalists who spurred a bank run at SVB only to turn around and beg for Uncle Sam’s help with impudence.
Perhaps most of all, you should be furious with the American government—not for its creation and execution of a bailout to protect the broader financial sector, but because its help was needed in the first place. You should be mad at Congress for loosening regulations on medium-size banks like SVB five years ago. And you should be mad at the federal and state regulators who, as supervisors of the system, allowed this mess to happen.
Annie Lowrey: Silicon Valley Bank’s failure is now everyone’s problem
With the acute phase of the SVB debacle coming to a close, Congress and the country’s regulators have an opportunity to make the financial system safer—by insuring a wider range of deposits and restoring scrutiny to regional banks. The risk is that, knowing that the government will act as a backstop, bankers and investors will become more reckless, rather than less. And Congress needs answers from the Fed and the FDIC about why they were incompetent in heading off this crisis and had to scramble to fix things after the fact.
The SVB crisis was unusual in many ways. It did not involve a risky hedge fund or investment bank, but a plain old depository institution. It was caused not by leveraged bets on exotic derivatives, but by executives parking cash in some of the safest and most liquid instruments on earth. The precipitating event was not the slow accumulation of mortgage defaults or the sudden arrival of a deadly virus, but the Fed raising interest rates, something it does with perfect transparency (it holds a press conference every time it does it, for goodness’ sake). That makes the debacle all the more bewildering and galling—even if the cleanup ultimately costs the taxpayer not a dime, even if there is little to no financial fallout.
By last week, catastrophe may have been unpreventable. SVB had expanded rapidly during the COVID tech boom, as new depositors poured billions and billions of dollars into the bank. Unable to lend all that money out, its executives instead invested in simple government-backed or government-issued securities. Those securities, such as Treasury bonds, decline in value as interest rates rise. There are a number of ways to manage this kind of interest-rate risk; SVB’s managers did so incompetently. The red ink in their portfolio meant that the institution would struggle to make depositors whole if and when they wanted their money back. On a single day last week, panicked account holders demanded $42 billion. The bank went kaput.
The danger of such an event was obvious, at least to the green-eyeshade types in Washington and New York, as soon as the Fed began raising rates last year. Indeed, Martin Gruenberg of the FDIC described it in remarks in December: “The combination of a high level of longer-term asset maturities and a moderate decline in deposits underscores the risk that these unrealized losses could become actual losses should banks need to sell investments to meet liquidity needs.”
A number of analysts saw what was coming for SVB in particular, too. Raging Capital Ventures, an investment office, noted the bank’s catastrophic interest-rate problems in January, publicizing the findings on Twitter: “The bank would be functionally underwater if it were liquidated today.” Moody’s had been examining SVB for a downgrade. Both were working with data from public filings made by SVB’s corporate parent.
As Aaron Klein of the Brookings Institution has noted, the bank’s supervisors should have looked into other straightforward issues. The bank had become reliant on low-cost financing from a federal home-loan bank. Only a small sliver of SVB’s account holders were fully protected by the FDIC’s $250,000 deposit-insurance policy. Moreover, SVB had no chief risk officer for eight months last year—the year of the crypto crisis, the year that tech began to melt down. Many of the bank’s prototypical clients—venture capitalists, start-ups, and technology firms—were struggling and drawing down their accounts. And its chief executive officer had started cashing out his stock.
Read: Silicon Valley was unstoppable. Now it’s just a house of cards.
Of course, the country’s regulators would have been paying more attention but for Congress. In 2018, a bipartisan group of legislators gutted parts of Dodd-Frank, the regulatory-reform law passed after the 2008 financial crisis. Indeed, they specifically exempted midsize banks—like SVB—from certain stress tests and capital requirements, as those banks argued that they did not pose the same systemic risk as big banks did.
To stop any risk to the financial system, the Treasury, Fed, and White House this weekend agreed that the SVB crisis did pose a systemic risk. The response that they concocted over the weekend is competent, I suppose. It is a bailout, but one that won’t leave the taxpayer on the hook for anything. SVB’s equity investors got wiped out, and its executives have been fired. The government is protecting its account holders’ deposits and has ensured that there are no runs on other regional banks.
But the government should never have to use its emergency financial-stability tools to help save one crappily managed midsize bank. The FDIC should have shut SVB down days, even weeks, ago. The Fed system should have known that the bank was at risk of collapse and acted accordingly. No start-up should have faced the prospect of scrambling for cash or figuring out furloughs, just because it had a checking account at SVB. No midsize bank should have faced concerns that it might, too, face a liquidity crisis.
There’s no success story here. The complexity of financial regulations and the dullness of balance-sheet minutiae should not lull any American into misunderstanding what has happened. Nor should the lack of a broad meltdown make anyone feel confident. The bank failed. The government failed. Once again, the American people are propping up a financial system incapable of rendering itself safe.
That system might become even more cavalier in the future, knowing that the Fed will paper over problems on bank balance sheets and that public officials will not tolerate any risk to the deposit accounts that make payrolls. The risk is not that SVB is endangering the financial system. The risk is that incompetent supervision and a dearth of rules are.
this is all true. And only people like Elizabeth Warren were opposing the legislation that allowed this to happen.
Are you now a supporter of Sens Warren and Sanders? Or do you just want to bitch about the results of policies enacted by the politicians you do support?
drummerboy said:
I admire the way you seem to think that because SVB had a product with the word "venture" in it, that this means that SVB "was acting like a VC firm" ( the whole point of this tangent).
ml1 has explained it twice how they're not.
Thank you, but I haven’t said anything about what I think. I posted information in replies to a statement about how start-ups used SVB.
As in Formerlyjerseyjack’s thread, others can do whatever they wish with it.
No comments on Signature Bank? On First Republic? Still nothing on Credit Suisse??
I need more coffee.
https://www.bbc.com/news/business-64973321
(https://www.bbc.com/news/uk-64929819 number of existing subs changes constantly, as does price & delivery date. Very reminiscent of the deals we have to buy fighter jets off you. This sales technique is getting old.)
DaveSchmidt said:
Thank you, but I haven’t said anything about what I think. I posted information in replies to a statement about how start-ups used SVB.
As in Formerlyjerseyjack’s thread, others can do whatever they wish with it.
it's my bad for not writing clearly and writing about a topic I'm not expert on.
But sometimes the larger and more important point gets lost when someone steers the discussion into a consideration of whether or not what I wrote was technically true. I actually think it is in a very narrow technical sense. SVB was not like a VC firm. But either way the point I was making is pretty much lost now.
Mea culpa. I should do my research before commenting.
joanne said:
One of the other, not-discussed matters I was wondering about is your sale to us of 8 wonky subs for an outrageous amount of$$$, that won’t be ready for delivery now until 2045.
i believe it’s the third time the price has gone up and date extended. And you’re selling us outdated tech.
Are these the submarines you referred to, Joanne. From The Dispatch, today.
“The United States, the United Kingdom, and Australia announced on Monday the first major development of their trilateral partnership known as AUKUS: the planned sale of nuclear-powered (not nuclear-armed) U.S.-made submarines to Australia. The three countries also announced a program to boost nuclear submarine construction over the next several decades, train Australian soldiers at American and British submarine bases, and deploy U.S. and U.K. subs to a military base on Australia's west coast. That may sound like a lot of hullabaloo over a few submarines, but the announcements mark a significant strategic milestone as the three countries look to address rising competition with China in the Indo-Pacific.”
Only had time to scan quickly. Yep, I linked above from two sources, in two posts. Your snip barely covered the important bits, plus the subs will initially be in SA (Great Aussie Bight) not WA.
Also, I posted an Animals in the News item for you 
P.S.: we had announcement today of the sale of 220+ Tomahawk guided missiles to be added to those Virginia class subs — to be delivered in twenty years, when the world’s moved on to other forms of warfare.
ml1 said:
this is all true. And only people like Elizabeth Warren were opposing the legislation that allowed this to happen.
Are you now a supporter of Sens Warren and Sanders? Or do you just want to bitch about the results of policies enacted by the politicians you do support?
This^^ is the crux of it, mt.
Elizabeth Warren (you know her as Pocahantas), has been pushing for greater bank regulation for years.
Seems like you support that now. Ready to switch teams yet?
GL2 said:
Hey ridski,
I lived at 47 Pierson Rd. What would you say is a reasonable price for that house today? Yes, I know I’m off topic. Sorry. Just reading a NYT article.
Without checking zillow... Firstly, I pass that house pretty much every day walking my dog. Secondly, the last few years I've gone to a bunch of open houses in Golf Island and I haven't seen a house in that neighborhood sell for under $650 in a loooong time.
ETA the taxes though are always 20k+ a year these days.
ml1 said:
But either way the point I was making is pretty much lost now.
Sigh, the thanks I get for calling attention back to it and learning a couple of things.
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what goes on in your brain when you hear the word Benghazi must be a marvel.
As far as I can tell, it didn't change our world at all, except to create a new punchline for Republican idiocy and malfeasance.