Peter Thiel's Founders Fund got its cash out of Silicon Valley Bank before it was shut down, report says
Bloomberg reported that Thiel's VC fund took all its cash out of SVB after encountering problems with transfers during a "capital call."
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I am on vacation and on a Saturday, yet here I am nerding out the Silicon Valley Bank (SVB) failure. Just when you thought I was already a big dork and then I come in with an even dorkier post like this. Ahahahahaha. I am not crapping on credit unions or trying to create distrust (I have been in the CU industry since 1994), but just to give you some insight on what I do and what I know.
I actually look at a bunch of CU balance sheets, and the few minutes I spent looking at SVB’s balance sheet doesn’t look all that much different than a CU. What I mean is the types of assets they have on their balance sheet are very similar to what I see with a credit union. They had a ton of securities, but all these securities were pretty much plain vanilla like what a credit union would purchase (their portfolio was agency/treasury bullets and agency MBS/CMOs).
At this point I see SVB had two major risks they didn’t manage correctly. 1) was the deposit withdrawal risk (they had a high concentration of big dollar accounts - a few big accounts leaving the credit union created a liquidity issue) 2) their interest rate risk was not managed appropriately (their balance sheet had too much in long-term investments that were fixed rate). Once the big dollar accounts started leaving recently, SVB had to sell their securities for liquidity. The sale of these securities were at a big loss.
Credit unions usually don’t have the big dollar accounts concentration risk SVB had, but there are some that do. As an example, I know of a credit union with about 20% of their deposits in marijuana related business accounts (not the same as big dollar accounts buy have similar risk exposure of deposits leaving), and this credit union is aware if there is a regulatory change to how marijuana accounts are treated by the federal government (the govt relaxes regulations) those deposits will walk out the door. As for interest rate risk, there are a ton of credit unions with a similar amount of volatility SVB had.
Once SVB added all the long-term investments, I think they should maintained a large portion in overnight funds and could have also hedged the interest rate risk (12 months ago) with a derivative swap (or cap). I realize the word “derivative” can be kind of a trigger, but some complex credit unions can and do have derivative instruments to hedge against interest rate risk.
It will be interesting to see the autopsy of how the regulators looked at what Dodd-Frank (DFAST) stress tests were run and how SVB got a pass. Note credit unions with an asset size over $10 billion need to run the DFAST stress tests.
Thanks for reading…
tell me how progressive you are when they start financing social security with your retirement...It's amusing how people will be all Libertarian/bootstraps until it's THEIR money in jeopardy.![]()
It's amusing how people will be all Libertarian/bootstraps until it's THEIR money in jeopardy.![]()
What the fuck are you on about?tell me how progressive you are when they start financing social security with your retirement...
No idea who that dude is, but I'm going to venture a guess that he has a bunch of money at risk in the bank shenanigans.
No idea who that dude is, but I'm going to venture a guess that he has a bunch of money at risk in the bank shenanigans.![]()
millionsNo idea who that dude is, but I'm going to venture a guess that he has a bunch of money at risk in the bank shenanigans.![]()
billions
this douche
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Start-up investor Jason Calacanis raising millions of dollars for Musk’s Twitter deal
Jason Calacanis, who's known for early bets on companies like Uber and Robinhood, is pulling together funds to invest in Twitter.www.cnbc.com
And elon's other buddy from paypal
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Negative. Even my UK native friends are refusing to go home. Total shit show apparently.Maybe a good time to plan an Imperial vacation?
Didn’t the uk lose last time? And we are still friends…..
we invade them for their healthcareDidn’t the uk lose last time? And we are still friends…..
You’d better hurry up then, the tories are rapidly cutting sections off and privatising them.we invade them for their healthcare
so we are invading in another way. Maybe we can invade Australia for the health care.You’d better hurry up then, the tories are rapidly cutting sections off and privatising them.
becsuse the call chips crisps and fries chips. Bloody bogan savagesWhy invade when you own them and they are already your lackys?
Are you saying Australians speak proper English?Perhaps they can also teach you proper English language?
Lost cause.Perhaps they can also teach you proper English language?
"they will make good slaves"Perhaps they can also teach you proper English language?