Silicon Valley Bank, has it affected you?

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John@Outfront

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So the FDIC says its going to now pay all depositors their monies--screw that!  we all play by the same rules, it was $250k max.  I believe big players are changing the rules.  if you dont pay us then we will...........  WH says it wont come out of tax payer dollars. because its coming from their FDIC accounts, so now the small community banks are screaming foul  and they should.

So we have just been unfortunately working on "out of state" sales tax that i need to start collecting from purchasers and we are using a large company called Avalara that calculates the taxes to be collected per state, county and sometime city.  then we pay a lump sum.  Well they used and banked with SVB.  their website now says that we are NOT to send any money to them as it would go into their SVB accounts and be not retrievable.  

the Fed say they are diverting a catastrophic issue at hand--i say let the cards fall where they may--(too big to fail?)  

 
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John@Outfront said:
So the FDIC says its going to now pay all depositors their monies--screw that!  we all play by the same rules, it was $250k max.  I believe big players are changing the rules.  if you dont pay us then we will...........  WH says it wont come out of tax payer dollars. because its coming from their FDIC accounts, so now the small community banks are screaming foul  and they should.

So we have just been unfortunately working on "out of state" sales tax that i need to start collecting from purchasers and we are using a large company called Avalara that calculates the taxes to be collected per state, county and sometime city.  then we pay a lump sum.  Well they used and banked with SVB.  their website now says that we are NOT to send any money to them as it would go into their SVB accounts and be not retrievable.  

the Fed say they are diverting a catastrophic issue at hand--i say let the cards fall where they may--(too big to fail?)  
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By passing the bailout cost to all banks by charging them more for FDIC coverage it really is passing the cost to anyone who banks, which is almost all of us. The banks won't absorb the cost, they just pass it on to their customers.

Same as when they want to raise taxes on business, the cost of those taxes pass through to the customer.

 
banks never take the hit. i bank with 2 local community banks and received emails from the CEO / President from both banks assuring us we're good. I hate bankers, But.....we have to have them! Peace

 
matt86m said:
Rumor is the Excs gave themselves a bonus right before they went under.
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Not sticking up from them but what I heard was this was the normal time line for that industries bonuses, ie this was the same paycheck week they got their bonuses in last year. And it was employee wide, not just the C-suites getting the bonuses. 

 
D-n-Tyke said:
Not sticking up from them but what I heard was this was the normal time line for that industries bonuses, ie this was the same paycheck week they got their bonuses in last year. And it was employee wide, not just the C-suites getting the bonuses. 
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From my view in the cheap seats, a bonus is a reward for doing well. If the bank is going under, those bonus dollars need to go to depositors and then shareholders. 

 
Luckily I am out of that rat race ... My first and second start ups I banked at SVG.  When the VC's put $8M in the first company it was all sitting in SVB. I know if this hit then the company would have been dead - took us nearly 2 years to get to break even -we lived off the cash in the bank. Would have missed payroll and bills and put 40 people  (including) me out of work.  I am sure Many start ups are dealing with that now 

As a start up I had no choice the VC's told me where to bank - I feel bad for the little guys that got destroyed  - most start ups miss two pay periods and its over

 
ChEFF said:
banks never take the hit. i bank with 2 local community banks and received emails from the CEO / President from both banks assuring us we're good. I hate bankers, But.....we have to have them! Peace
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Don't you sleep next to a retired one?

 
I bank with First Republic.  I still don’t understand how come my bank needed a 30 billion dollar deposit today from a bunch of banks. I moved a 3rd of my money to other banks yesterday just in case. Frb is The best bank I have ever worked  with in 50 years of banking.  Been with them 12 years. Best trained employees at any bank. I just don’t get it. 

 
dunenfool said:
I bank with First Republic.  I still don’t understand how come my bank needed a 30 billion dollar deposit today from a bunch of banks. I moved a 3rd of my money to other banks yesterday just in case. Frb is The best bank I have ever worked  with in 50 years of banking.  Been with them 12 years. Best trained employees at any bank. I just don’t get it. 
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I assume you weren't the only one to move money.  Assets on hand determines how much debt exposure they can have, so if everyone makes a run, their exposure comes due to offset the loss in assets/capital.  

At least how I understand it...

 
A lot of this was caused by the Fed hiking rates at a pace that has never occured before.  That hiking made the bonds that banks held on their balance sheet decline in value (banks have to hold bonds and the 'new' bonds yield more, thus the 'old' bonds are less valuable).  They essentially have a 'book loss'.  That book loss affects their liquidity ratio.  When the liquidity ratio declined; people got nervous and made a run on SVB.  Big thank you to J. Powell for F'n this whole thing up.  Best quote of his tenure 'inflation is transitory'......   LOL

 
1newbie said:
A lot of this was caused by the Fed hiking rates at a pace that has never occured before.  That hiking made the bonds that banks held on their balance sheet decline in value (banks have to hold bonds and the 'new' bonds yield more, thus the 'old' bonds are less valuable).  They essentially have a 'book loss'.  That book loss affects their liquidity ratio.  When the liquidity ratio declined; people got nervous and made a run on SVB.  Big thank you to J. Powell for F'n this whole thing up.  Best quote of his tenure 'inflation is transitory'......   LOL
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The party had to end sometime.  Decades of historically low practically free money wasn't a good record to have.  We cured the Dot Com crash hangover with more booze, then we created a real estate boom that crashed and cured that hangover with more booze that eventually came due when they shut the bars down (Covid) and there wasn't anymore booze to drink. 

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