Silicon Valley bank
So if svb is no more, what does this mean for all the tech company’s money sitting in the bank?
More layoffs, in startups this time.
Got prestiged
Bailout…no impact
They're not gonna be bailed out, they're not systemically important and it will serve as a warning sign to other banks
Can't Jfed just fire up the printer again? /s
Fucked times to be had by all. Laid off folks were finding footing in startups and most SVB clients are reporting concerns around payroll and solvency. No bueno amigos. If you have a job you hate, learn to love it. It’s spooky season
Even this Tesla guy is staying put. If Tesla can do it, you can too
Hey, it’s a hell hole out there right now. Better the devil you know than the one you don’t 😂
All the money insingle accounts above $250,000 is gone. Only $250 k is recoverable per account
not really, it’ll take some time to get it but because the assets actually exist you’ll just get less
Yes but I doubt recovery the money above 250,000 is going to be easy. We talk about practical cases
There are thousands of US startups that banked at SVB, often as their *sole bank*. $250K per account is not going to last long. The #1 pressing issue for these startups is *payroll* - you can't have people work if you can't pay them. This means mass furlough. It might mean thousands of startups die before the FDIC gets through its receivership process and releases the funds.
Source: https://www.zerohedge.com/markets/expect-mass-layoffs-real-world-impact-svbs-failure
Withdrawals open again on Monday. FDIC transferred all SVB funds to a new banking entity in Santa Clara within the last day.
Small companies going bankrupt soon
The biggest problem is the credit crunch that is coming to a lot of small companies in tech. They were relying on SVB for their commercials credit needs, taking out business loans and setting up lines of credit to have flexibility in their business. They are all going to have to find a new lender. I don't know but I assume that any SVB lines of credit are now frozen. Companies with a balance will be expected to pay it back and none will be able to draw further on their line of credit. So that immediately impacts the ability of businesses to pay for things and use the line as a float. In the medium term all their business loans are going to roll over and need refinancing at some point. It's unlikely that the businesses will get as favorable terms anywhere else, and some might not be able to refinance at all. In that case these businesses will suddenly have to repay a lot of debt and they may not be able to do so without shutting down or scaling back. So to the extent that they have to scale down to meet their loan obligations they will have to lay people off
No depositors in any FDIC insured accounts have EVER lost ONE PENNY in the history of the FDIC irrespective of their actual balance (and there have been plenty of bank failures in the past). Relax.
Yeah that's not the problem. It's loss of access to credit that will to cause companies to go bankrupt. Their actual money on deposit they will get. There will be no further lending by SVB though, obviously. Their loans and lines of credit are what's at risk
You have proof to back up your statement? I found this which is diff from what you said: Since 1933, no depositor has ever lost a penny of FDIC-insured funds.” On https://www.fdic.gov/news/press-releases/2020/pr20032.html
Nothing good