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What do vegetarian Indians eat for protein?
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I have worked at TikTok US core tech for 3 years. AMA.
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I do tech screens at Google. AMA
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East Asian Men don’t talk to me bc I’m Vietnamese
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Can someone give a tl;dr recap on exactly why SVB ended up the way it is right now? Also why is this bank special (if it is)? Why didn’t this happen to a larger known bank of Chase or BofA? etc tc: 140k i know i could google this but having a post let’s me ask follow up questions and interact with others in the community
fractional reserve banking and everyone wanted to withdraw at once. Who could have thought that it’s a batshit insane idea to only require a bank to have 10% of dollars on hand of their users deposits. Our banking system is a total sham.
It’s worse than that during Covid they reduced it to zero.
Perhaps someone should start a bank that keeps 100% of deposits as cash. Wonder how much it'd cost for a checking account.
> what happened ? * SVB's 80%+ investment is in tech * after powell's speech market tanked and hit tech worst * SVB tries to raise 2B in cash while saying their on hand assets are now worth lower * investors sell stock because no confidence. which makes it even more expensive for them to get cash * VCs and startups run to withdraw their deposited cash * adds to SVBs struggles to raise cash * they give up and close shop > why? because they are over leveraged in tech > why not big banks? their investments are more diversified eg: bonds, corporate debt, mortgages & consumer credit, retirement accounts etc
80% in tech, this is like overleveraging in subprime mortgage all over again
what do you expect silicon valley bank to invest in? what do you think mayoshi son has been doing all these years? if you do it during greatest bull run you're a genius. if you do it during recession you're done
Liquidity crunch + fear contagion according to WSJ. In theory, some VCs warned startups and the fear spreaded. They ran to the bank, and then others did the same. The bank had to sell investments at a loss and couldn’t make everyone whole.
Well, if the bank ends up failing then how do we explain so many customers running to the bank? But yeah, the only thing we know is that they ran. Maybe they weren’t fearful. But I rather believe they were. Not very important after the facts though.
No. What’s the word?
What happening to wells fargo?
From my understanding, SVB is funded by lots of VC money to lend to tech companies… so it’s a domino effect from the recent tech valuations crash. The tech valuations drop, so tech investors to VCs want money out (i.e. VC run), which in turn means the VC also have to pull out funds from SVB, thus causing a bank run. The other banks are not as heavily leveraged in the tech sector as SVB. This is a good 101 summary if anyone is interested (read 1st half as 2nd half is opinion based): https://www.linkedin.com/pulse/few-thoughts-svb-jeremy-solomon