Ken WhiteMar 11, 2023
I know I am extremely culturally biased but “Silicon Valley Bank” kind of screams “Juicero Pets.com Savings and CryptoLoan” to me.
Show threadJason Petersen (he)Mar 11, 2023

@Popehat why is this so odd to people? This bank is 40 years old. Not ancient, but that’s no predictor of stability, but it’s not like they’re swindling people.

The problem is likely a bunch of VCs and later stage investors pouring poison in the ears of startup leaders (or outright commanding them) and rallying everyone into a run on the bank. When your customers are all startups beholden to investors, you’re fucked if the investors say get out.

Show threadJohn Minnihan

@jason @Popehat svb actively pitched itself to startups for at least the past 15 yrs. their relationship w/ stripe is not a simple banking one. it's them embedded in the financial health of nearly every startup that signed up for atlas.

questions of stability predictors *must* include the fact that svb was largely used by startups, startups that serviced other startups, VCs that dealt w/ startups, and family offices of wealthy VCs who funded startups.

i know this whole ecosystem pretty well

Mar 11, 2023 at 1:23amWeb
Show threadJason Petersen (he)Mar 11, 2023

@jbminn @Popehat oh yeah it’s a huge fucking circle jerk, an Ouroboros of “we’ll juice your editba if you juice ours”, and having a system like that be the monoculture of an entire bank is Bad. I was just pushing back on “hey this bank seems sketch”. It’s sketch because of the system its a part of, rather than something banking-specific it did.

Anyways I guess maybe we all get fucked over again for a while because everyone with money put it in one spot again. Cool.

Show threadJohn MinnihanMar 11, 2023
@jason @Popehat normals probably don't have too much exposure afaict
Show threadJohn MinnihanMar 11, 2023

@jason @Popehat ...unless there's some really bizarro paper that svb sold to mainstream banks that's somehow tied to mainstream deposits.

kooky bankers who sniff their own farts do weird shit

Show threadJason Petersen (he)Mar 11, 2023

@jbminn here’s hoping. I know all the blowhards crying wolf about “contagion” just want Powell or Yellen or whoever will listen to drop money from helicopters on them, but it’s hard not to be a bit skittish.

But I finished undergrad and entered employment in Spring ‘08 so this might be a once burned etc thing.

Show threadJohn MinnihanMar 11, 2023

@jason of course. see my last tweet for my experience in this context

there are def some VCs crying today because they have *personal* exposure. they couldn't give two shits abt anyone else.

Show threadcassius1213Mar 11, 2023

@jason @jbminn

spring 2009 here, so I very much agree...

my take is that there's a process to deal with bank failures: depositors get $250k each and an IOU to maybe get a few cents on the dollar for their uninsured deposits in a few years

no helicopter money, no making uninsured depositors whole & everyone in the valley learns that bank failure risk is something that's real and that occasionally *they* lose big

Show threadJustin MaxwellMar 11, 2023
@jbminn @jason @Popehat thanks. This is accurate to my experience as well. A lot of snark flying around from people who don’t know. SVB was operationally tech-friendly in a way tech needs and other banks just completely don’t understand.