image stats
date added
previous votes
Get woke... oh noes its more fake news!
1 star2 stars3 stars4 stars5 stars
Get woke... oh noes its more fake news!

"a woman standing in front of a screen"

Rate image:
[ | | ]
[ | ]
Comments for: Get woke... oh noes its more fake news!
pulse Report This Comment
Date: March 14, 2023 05:32AM

As head of risk in UK I'm sure she contributed directly to the failure of the US bank smiling

They were indeed without a risk officer, after Laura Izurieta left in April last year and wasn't replaced until January. It wasn't because this woman was promoting lesbian porn.

Probably also had nothing to do with SVB's constant bets that interest rates would fall until those bets all failed to pay off.. especially as they increased financial assets 300% over the previous 2 years and had to cover the losses on those.
woberto Report This Comment
Date: March 14, 2023 06:02AM

The UK, Denmark & Sweden are "representative offices" and you can’t generate sales from a representative office (you can only run non-transactional operations).
So yeah they have no impact on the US bank. According to TechCrunch+.
Get woke go broke is a wholistic approach to destroying a company.
If you are spending time and money on that shit then you are not fit to handle other peoples money.
pulse Report This Comment
Date: March 14, 2023 12:21PM

This is one of the best writeups I've seen on the situation (in simple terms)
Silicon Valley Bank (SVcool
smiley was thriving. Credit losses are fairly low. Its deposits TRIPLED from 2019 to ‘21.

How’s that a problem? It sounds great, right?

1. When banks accept deposits from clients, they OWE the client that money. So deposits are liabilities to the bank. Liabilities cost money……”cost” both to serve those clients (branches, tellers etc ) and any interest the bank pays you on your checking account (deposit).

2. To pay for the cost of those liabs, banks turn them into assets: lending deposits as small business loans, mortgages, etc.
If a bank can’t lend deposits responsibly, it often uses excess to BUY loans or “securities,” like US Treasuries & Mortgage Backed Securities (MBS)

3. As mentioned above, from 2019-2021, the deposits tripled! SVB needed to take those funds & acquire “assets” to pay its costs.

4. Much of the $ was from VC-backed companies that needed a place to deposit the $ they raised. Those are big deposits.

5. Deposits were pouring in too fast to lend responsibly. SVB recognized that. Rather than make dumb loans, SVB bought assets guaranteed by the US government - Treasuries and MBS. BUT, it bought long duration. Often 10+ year bonds.


6. When rates rise, fixed income prices fall.
A general rule of thumb is for every one year of “duration,” each 1% interest rate move impacts the price of the bond by:

1% x Duration

A 1% move on a 9 yr duration bond is ~9% +/- on the bond price.

But banks are levered…

7. Remember: banks generally acquire assets by using deposits (liabilities) as the capital source.

And banks like SVB are levered 10:1 or more: owing $10+ for every $1 of shareholder equity.

If you’re levered 10x, a 10% loss on assets is a 100% wipeout.

8. So SVB bought high quality assets, but it bought tons of them with LONG duration at LOW interest rates.

When the Fed raised rates, those assets declined in value…

…1% x Duration.

Those losses, multiplied through the leverage at SVB, caused a big problem!

9. SVB now has a mark-to-market hole in its balance sheet. It’s “just” mark-to-market: as long as its liabilities are sticky (ie, depositors leave their money SVcool
smiley, it will ultimately be fine.
But that’s a big “if.”

10. Technically, if all the depositors ask for their $ back at once, SVB needs to sell those bonds at the mark-to-market value, crystallizing what could have been a temporary loss. And if those losses are big enough, it may not have enough money to pay out all depositors.

11. But that situation rarely happens. However, once it starts, game theory kicks in: NOBODY wants to be the last depositor at a bank.

12. Which brings us to today. SVB has large depositors. Large depositors aren’t fully insured by the FDIC - they have an incentive to find HIGHLY sound banks. Once a whiff of issue pops up, large depositors run…“bank run.”

13. As a bank’s deposits go in reverse, it has to sell assets. The FHLB steps in to help turn its less liquid assets into more liquid.
woberto Report This Comment
Date: March 15, 2023 02:17AM

pulse Report This Comment
Date: March 15, 2023 02:42AM

I think it's only fair that everybody covers my losses, too
woberto Report This Comment
Date: April 23, 2023 05:52AM

woberto Report This Comment
Date: January 29, 2024 10:51AM

And in the latest chapter of - Get woke go broke.