In Silicon Valley, a boom era feels like it’s ending
The near Lehman-like collapse of Silicon Valley Bank last Friday was a massive blow to the startup and venture-capital ecosystem, where new ideas and companies come from. And earlier this week, more layoffs and limited hiring at Meta Platforms Inc. META and Apple Inc. AAPL, respectively, pointed to a potentially longer economic downturn than first expected, as companies deal with a more stringent, cost-focused reality. #tech #housing https://stocks.apple.com/AZj3TKxt8TYe-jLKRxKsbfQ###
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I miss Trump
Low interest, infinite money, and overhiring happened on his watch
Smooth brain thinker right here
There’s nothing Lehman-like about SVB. SVB was invested in Treasury Bonds which is typically the safe move. But the fed turned the bonds into junk by haphazardly raising interest rates to try to slow down inflation. Instead we got inflation AND high interest rates. SVB was doing what conventional wisdom told them to do.
This is the typical reason (excuse?) I’ve been hearing/reading and it made sense to me. But after talking to very close friends who’ve worked in banking for a long time, they told me that every bank buys bonds but you’re supposed to hedge those investments with other assets in the event of interest rate increases. SVB did not manage their risk properly, it wasn’t conventional wisdom. Did the rapid interest rate hikes put a lot of pressure on SVB? Yes for sure, but the root cause was mismanagement.
What do you mean by “hedge those investments “?
It’s cyclical. In ten years it will be hot again and then wane.
This. It sucks right now but everything cycles…
It’s all orchestrated to increase unemployment and drive down wages. The fed doesn’t want prosperous, financially independent citizens. It needs everyone to live paycheck to paycheck in ever increasing debt.
Bingo. Abolish the Fed
Exactly Source: deal with feds
Sucks, glad it ain’t us again this time. Also, sorry for causing this one again.