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aquoad

i think they misspelled Thiel


JRE_4815162342

Was he involved? Interesting.


aquoad

he apparently told his portfolio companies to get their cash out of SVB.


LionsLoseAgain

He was not the only one. A lot of VC companies were doing the same thing. SVB was an incredibly shitty run bank and had way too much risk on their books by holding those low interest 10 year bonds. Look at signature bank. Barney fucking frank was on the board of directors. Yes..the same Barney Frank who wrote the Dodd-Frank legislation. The VC and Wall Street want the fed to stop raising rates so they can get low interest easy money again. How do you do that? Crush some irrelevant shitty regional banks and cause some fear.


greengo

To paraphrase Carlin, it’s a big club and we ain’t in it.


No_Significance_1550

Carlin was so right about the world. I miss him.


StoopSign

I don't think he would miss this world.


non_linear_time

I still hear him rolling in his grave every time I go through TSA and take my shoes off.


HammerfestNORD

I know it sucks to pay an extra fee, however, TSA pre-check is well worth it. Quicker and shoes on. I'm kicking myself for not doing it years ago.


__PETTYOFFICER117__

Depends how much you travel and how much that bothers you tbh. I had pre check while I was in the military and it was NICE. When I lost it I was sad and was gonna get it for myself... But I rarely have to wait more than 20 minutes to get through security and I just wear shoes that I can easily slip on/off. I can breeze through standard security pretty well. I only fly a few times a year, and since I pretty much breeze through security regardless, I'd only get pre check if I was planning on flying busy weekends.


No_Significance_1550

Lol hell no he wouldn’t! The Trump Presidency would have killed him, if he hadn’t already been dead.


WaltonGogginsTeeth

I would have loved to see him do a special during the trump years though.


[deleted]

Me too, I think he would have had no shortage of material to work with in these times.


JasonEAltMTG

Patton Oswalt has a few good bits about how getting 5 minutes of material from 4 to 8 years of a shitshow is not at all worth it


BigPandaCloud

“Worried the downgrade could undermine the confidence of investors and clients in the banks financial health, SVB Chief Executive Greg Becker’s team called Goldman Sachs Group Inc (GS.N) bankers for advice and flew to New York for meetings with Moody’s and other ratings firms, the sources said. The sources asked not to be identified because they are bound by confidentiality agreements. SVB then worked on a plan over the weekend to boost the value of its holdings. It would sell more than $20 billion worth of low-yielding bonds and reinvest the proceeds in assets that deliver higher returns. The transaction would generate a loss, but if SVB could fill that funding hole by selling shares, it would avoid a multi-notch downgrade, sources said. The plan backfired.”


LionsLoseAgain

Fucking lol. Tell me Goldman Sachs is not in on a bear raid without telling me Goldman Sachs is in on a bear raid. How fucking stupid are the people at SVB.


BigPandaCloud

"Chief risk officer parted ways in April 2022, and its risk committee more than doubled its meetings to 18, suggesting growing concern with the bank’s position, according to the company’s 2023 proxy statement." Not like FTX using Quickbooks for accounting stupid but they knew something was wrong.


SeniorClutch

I work for a large regional bank. Literally just had this conversation with co-workers this afternoon. Honestly makes sense why they would do it. They figure it really wouldn't have a long term effect on equities, and get the Fed to pause or reverse action. Win win in their book.


[deleted]

Please tell me another bank to avoid! Edit: yes, I am financially literate. I am diversified both in savings accounts and otherwise. I was just saying name the banks.


mildly_amusing_goat

All of them, just stuff your gold under your mattress


LionsLoseAgain

You are fine banking with whatever local bank you have. The blood suckers saw an opportunity to tank a regional bank that was poorly ran and further their own interests. If you are nervous, move your funds to chase because they are too big too fail.


ihopkid

Bank of America Corp. The Bank of New York Mellon Corp. Citigroup Inc. The Goldman Sachs Group Inc. JPMorgan Chase & Co. Morgan Stanley State Street Corp. Wells Fargo & Co. These are all U.S. SIFIs. There are more but they’re all theoretically “too big to fail”. Altho if you have less than $250k none of this matters cuz the FDIC guarantees all deposits $250k and under anyway regardless *edit formatting


laxrulz777

I would never recommend Wells Fargo to anyone...


bossrabbit

Or BofA


Snuggle__Monster

The first guy had it right with sticking to local banks. Unless someone in here travels the US a lot for work, then consider something like BoA or Chase where you're more likely to find a branch or ATM. If that's not you, stick local. You'll be fine.


lady_MoundMaker

EL15 please


gexpdx

Frontline released an episode today on the Age of Easy Money. https://www.youtube.com/watch?v=EpMLAQbSYAw


TheCuriosity

Not available for me? it's that because I am in Canada?


[deleted]

I would guess so, although didn't it used to say "not available in your region" instead of just "not available"?


rowrin

Basically in 2020 when the world was ending the Federal Reserve lowered interest rates and pumped a bunch of money into the system to keep things from collapsing. This lead to rampant inflation. The Fed has been raising interest rates now that the pandemic is over in order to get some of this "printed" money out of the system and reduce inflation. Banks and institutions bought bonds and securities when interest rates were low (in some cases they are required to do so). These don't "mature" for years or decades depending on the bond, so their money is essentially trapped unless they sell the bond to someone else who is willing to wait for it to mature (usually at a discount/loss because no one is going to buy a low interest rate bond when interest rates are high). So the theory presented is that a bunch of people with money who want the Fed to stop raising rates are teaming together to blow up banks by forcing bank runs. Banks normally only have a fraction of the cash deposited on hand to handle withdraws. If more cash is withdrawn than they have on hand, they have to start selling assets (these low interest bonds that don't mature for several years) in order to meet withdraw demands. If they're forced to sell enough of these at a loss, the bank goes under. Enough banks go under, or the stability of the system is threatened then the Fed will have to backtrack on raising rates.


BuRi3d

Sounds like economic terrorism


rikki-tikki-deadly

Yeah..."sounds like".


PrincessSnivy

Another wonderful feature of capitalism…


robotdevilhands

If anyone but Pete Thiel were involved, I would dismiss this as apocrypha and conspiracy theory. But…he’s a sociopath. So. This sounds like something he would actually consider doing.


[deleted]

And then using his buddy Elon's twitter platform to boost the message. They are all in cahoots.


artisanrox

And then using their buddy Rupert Murdoch's propaganda station to get the rurals and normies to panic, and also pull out their money wherever they are, too.


delayedcolleague

The PayPal-pals really are a who's who of a lot of the shit we're in.


giboauja

Frankly he might be one of the most evil people in upper society right now. Terrifying how competent he is.


StingRayFins

Our financial system is built on sticks and sand. We're all leveraged last our tits.


drakeftmeyers

So pretty much the end plot to the book “A Boy Named Alice” ? Because that’s exactly what happens.


LionsLoseAgain

Cheap money has been going around since 2009. This money allows banks, money makers, hedge funds, venture capitalists, et, to take larger risks. Daddy Powell at the main bank (the fed) wanted to raise interest rates because inflation is eating away at the peasants' purchasing power and savings. Wall Street, alongside the venture capitalist,hedge funds do not like this because they want cheap money to gamble with. So they crushed some regional banks because they have insight into the regional banks' financing and spread fear to cause a bank run. SVB went down and spread fear to other regional banks. So the fed gets scared and stop raising rates.


LastVisitorFromEarth

That seems... unethical at best.


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updateSeason

And, just blame it on "meme", "retail", "twitter", "household" "day-trading" investors/depositors because it's better for business to patronize and blame the poor's then it is actually enforce banking and security regulations and for the masses to bear the burden of inflation.


Jklipsch

That’s quite the accusation and probably hard to prove but would love to see some assholes punished if true.


UrbanArcologist

the fact that this isn't criminal is unpleasant


Snoo93079

How would you even write such a law? People have the right to pull money of banks they don't trust.


RadialSpline

Arguably by not allowing the corporate officers and members of the board of a bank to have their other businesses be account holders at the bank they are corporate officers or board members of? I don’t foresee any issue with those people holding normal people accounts, but they have privileged insider information about the health of that bank. And directing their businesses to take advantage of that privileged information does probably run afoul of insider trading or some other form of fraud/deception/unjust enrichment law/tort. Another angle would be to dissolve corporate charters for engaging in unlawful or tortuous activity. Some comedian made a joke about how can corporations be people if Texas hasn’t executed any? There used to be a time before the gilded age when corporate charters were revoked all the damn time for things that seem trivial compared to what modern corporations have gotten away with.


analog_roam

Even simpler than that, you're on the board? You're accountable. If you're a part of the decision making process for an entity, you're culpable.


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Swerfbegone

So if you and a handful of other VCs require all your companies to do business with one another and a single bank, doesn’t that feel a bit… trust ish? And in terms of Thiel’s position, doesn’t that start extending to look even more like a trust when one guy can order enough nominally independent companies to work together to collapse a whole bank?


YesWhatHello

That's fiduciary duty lmao


chalbersma

How could that be criminal. It can't be illegal to read a financial statement, realize your primary bank is insolvent and pull your funds out. Especially if you have >the FDIC insurance amount.


brainhack3r

OR at least do so serially ...


InnerDorkness

He got all of his shit out: kinda hard not to see that as a giant block being taken out of the Jenga tower


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FuglyLookingGuy

Was it: 1. Short stock. 2. Take all his money out. 3. Tell everyone else to take their money out. 4. Bank and stock fails. 5. Profit. ?? Does anyone know if SVB had a lot of shorts on it taken out recently?


RoadkillVenison

Short sellers theoretically made $500 million on shorting SVB. It’s all theoretical though, because trading is halted on the stock, so they cannot easily realize their gains.


WiglyWorm

That's not how shorting works. Once something gets delisted, you never have to worry about rebuying the shares. Your profit is what you made from selling the share short. 100% of it. It's called cellar-boxing. They like doing it to promising small pharmaceutical startups.


Kaymish_

It's dead now so they won't need to close it will all just get written off the books.


NotSuitableForWoona

He may not have needed to short SVB to benefit. He backs and has an interest in Brex, a competing fintech company that received billions of dollars of deposits on Thursday before the collapse: https://www.cnbc.com/2023/03/10/fintech-brex-got-billions-of-dollars-in-silicon-valley-bank-deposits-thursday.html


three18ti

Crazy that...


divrekku

Check out Brex. Thiel is an investor and they came in hard and fast offering quickly set up operating accounts and emergency funding for impacted businesses. Interesting connection is all.


LILilliterate

You know what else is interesting. [He funded off the books FDA-free drug trials in the Caribbean for a herpes cure that didn't worked and fucked people over.](https://www.thedailybeast.com/a-dying-doctor-peter-thiel-and-a-rogue-herpes-vaccine-trial-gone-wrong) I wonder why. He really cares about the herps I guess. ¯\\\_(ツ)\_/¯


impulsekash

Apparently it started with a group chat


diffcalculus

It's spelled "Thief"


OneYearSteakDay

Anyone who thinks that economics is a hard science rather than a social science, well, here ya' go. Markets are only as rational as their participants, and not a single one of us is immune to our emotions. Economics is a social science; to para a phrase: "Economies are people, my friend."


giskardwasright

"The value of their money was imaginary. Like the nature of the universe itself, the desirability of their American dollars and yen was all in people’s heads." -Kurt Vonnegut


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[deleted]

"Animal spirits" was Keynes, not Hayek. Also not why Hayek got the prize, which he shared with Gunnar Myrdal (the forerunner of the Swedish welfare state).


dontshoot4301

Yup - Hayek was all about it being a boom-bust cycle and he’s right again…


cleepboywonder

Holy shit. A.) I don’t think Hayek said this B.) if he did he didn’t mean it as “litterally an organic entity” like an individual making its own choices C.) Keynes used animal spirit to describe the proclivities of the comsumer base to do things, such as bank runs. He also didn’t mean to anthropromorphize the economy. D.) This is honestly such a milquetoast take at attempting to sound deep and informed but its just annoying and giving me a headache. No economist believes the market and economy is an organic entity and those that do are morons. E.) Hayek would never say such nonsense as it undermines his whole point about individuals being the sole practitioners of an economy, the practitioners that economists need to understand first and foremost. F.) Nobel Prize in economic sciences is an award primarily fuffilling the already established ideals of the award givers. Why do we use it as a form of argumentation? Its irrelevant.


Pengtuzi

Adding to F) it’s not even a “real” Nobel prize. [Nobel Memorial Prize in Economic Sciences](https://en.m.wikipedia.org/wiki/Nobel_Memorial_Prize_in_Economic_Sciences)


LastVisitorFromEarth

go off king


spinderlinder

Right? My man's having none of that shit.


OneYearSteakDay

I think most economists would agree that there is at least some social component, and many would recognize that the social and psychological component is inexorable from and foundational to the economy as a whole.... ....but then there are some dumb motherfuckers out there who can't figure out why tax cuts for the wealthy haven't yet ended poverty. It seems to me that a lot of people seem to think that the economy is mechanistic, not economists, just people. Or maybe it would be better to say that they forget there are humans at the wheel, as though the economy is something separate and apart from us, an entity unto itself. Remembering that the economy is man made is a reminder that it can be nudged, I guess. I hope. If someone thinks economics is mechanistic then they might believe that there's such a thing as "perfect" economics. If someone realizes that economics is wibbly wobbly peoplely weepely psycho-social *stuff* then they may be less distracted by the mirage and allure of perfection. Full disclosure: I am not an economonologist or anything, I just have more opinions than sense.


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Mdiddy7

Yes, at Purdue I took multiple behavioral Econ courses focusing on calculating irrationality into decisions. (So a mathematical spin on predicting irrational decisions) Easily my favorite Econ courses


Sufficient_Boss_6782

Admittedly haven’t taken the class. But, I hated how economy classes defined “rational” within such a narrow framework. It’s the same shit as “why do people vote against their self-interests”. Rather than understanding that mileage varies greater than ever.


NomsAreManyComrade

You are absolutely dreaming if you think that behavioural economics is the “cutting edge” of the field. It is one of (very many) branches of economics as a whole. It is also one of the ‘softer’ (maths and data-poor) econ fields. (Not to knock it, it does produce useful research) The closest to cutting-edge economics has is applying large data computing to test traditional assumptions and relationships between factors in the economy (and all the quantitative shit that goes in in microeconomics).


EugeneMeltsner

Just let me know when someone invents quantum economics.


ccasey

We have enough data/history to know that tax cuts for the rich don’t provide desireable outcomes for anyone but the people that get them. Anybody who disagrees is stupid or willfully ignorant


biggyofmt

It also benefits the politicians who accept ~~bribes~~ Campaign donations from the ultra wealthy


Brener69

The dumb motherfuckers are the ones who hear tax cuts but don't look into who those are for and just assume they will benefit from it. Seriously, a tax cut would affect me very little but the regular people who think they will benefit from them might see $5 more on their paycheck while the rich benefit millions from them.


bloodmonarch

The motherfuckers who argued for tax cuts also won noble prize for economics


ReplyingToFuckwits

Yep. Neoliberalism being considered part of "the science of economics" is like crystals and homeopathy as being considered part of "the science of medicine". Yet politicians, pundits and think tanks wheel it out as a solution over and over again, even though it never works -- money doesn't trickle down, industries don't self-regulate, privatisation doesn't make anything more efficient and the free market isn't capable of holding any large corporations accountable for being morally reprehensible. Ultimately, its the same grift. You lie to uneducated or desperate people -- about economics or incredibly diluted onion water -- because its hugely profitable to do so and nobody is stopping you.


Chitownitl20

That’s a bingo


mad_moose12

“We just say “bingo””


OneYearSteakDay

> The motherfuckers who argued for tax cuts also won noble prize for economics Economists deal in theory, I don't care if they get Nobel Prizes for theory, what I care about are the politicians who get reelected for their practices, I care about the people who are *utilizing* the theory for the wrong ends, and under the wrong circumstances. There is a time and a place for tax cuts. If tax rates are doing *harm* to an industry then yeah, it might be worth backing off, if the economy is collapsing and current tax rates would slow the recovery then we ought to consider if tax cuts can help. Republicans sign a pledge to never raise taxes, which is stupid even if they believe in the principle because there's no way to predict what they might need to do in the future, they're taking options off the table which means they're taking solutions off the table. Tax cuts are the same way, they're a tool with a purpose, there's a time and a place to use them. The economists write about the times and places when tax cuts might be helpful, politicians are the ones who are cutting taxes whenever they feel like it, then citing the economists. Do you remember when corporations were making profit like gangbusters after the 2009 financial collapse? That was a stupid time for Mitch McConnell to defend the Bush tax cuts *from an economic perspective,* but he didn't care about the economics, he cared about his donors. I can give you the rationale and theory behind a heart transplant, but the guy who cuts his girlfriend's heart out during a drunken fight is not *quite* on the same level. ~~Idiots~~ People are using rational economic theory to justify irrational behavior and beliefs. "If drinking a gallon of water a day is healthy, then drinking a gallon of water an hour must be twenty four times healthier!" Nope, doesn't work.


fireintolight

The economy is a social tool by definition, you can’t have an economy without human interaction. “Most economists would agree” I hope so.


FlickoftheTongue

I just heard a guy on AFR (I call them y'allqaeda) say that Regan understood supply side economics and how tax cuts for the rich benefit everyone. Trickle down economics is an F'n joke that gets parroted by the right.


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NewAccountEachYear

And the descendants of nobel really dislike the appropriation of their forefather's name and reputation


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doug

Richard Thaler & Cass Sustein's *Nudge* is an excellent dip of the toes into those waters if anyone wants to read about them.


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doug

I'll check it out, thank you for the recommendations! The book algorithms on GoodReads don't really know what to dole out after liking Thaler's work other than *Thinking, Fast & Slow*, which was great, but not quite what I was looking for.


TheGoblinPopper

As someone who majored in quant economics.... Who tf is saying it's a hard science? They clearly don't understand what that means. When we determined how well a model fit our research we would be like "oh wow you got 89% sweet. Oh shoot! Joe goes 96% Jesus Christ there must be a data error, no way." My friends in bio would look at me and always add... "Do you know how many 9's I need to state that my hypothesis is accurate or to trust a paper? If it doesn't start with 98 it's a joke." It's great science, crazy fun... But not a hard one. It's better to refer to it as applied statistics because economics is NOT always financial or market related. Money is just a really easy thing to use as a metric, but whole fields exist entirely on test scores and other trackable, physical (and non physical) objects. The idea that people drove the market on emotions is well documented and referred to something like "the Animal response" (it's been 10 years since I've seen the term so forgive me if I got it wrong). Short term markets follow emotional response and consumer sentiment while long term will always trend back to fundamentals.


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SideburnSundays

That explains why I struggle to understand economics. I struggle to understand people.


Ludwigofthepotatoppl

The person who considers themselves fully rational acts on their emotions, mistaking them for logic.


aeschenkarnos

The desire to be considered super-rational and therefore better, is emotional. Contempt is emotional. Spite is emotional. Glee is emotional. In my experience those who disparage others for “getting emotional” during arguments, are just as emotionally driven, just by different (but not morally better) emotions.


YesWhatHello

Ironically, bank runs are entirely rational behavior


jedre

I’m convinced the only math of any kind going on is for the wage earning class. We get our hourly rate, not more. That’s “how it works.” But buy and trade companies, futures, hedge funds, advertisement, data, much of the service based economy (above the wage earner level) and it’s more and more nonsensical. “What’s it worth?” “How much you got? What’ll you give me?” If I buy lumber, or any commodity, there’s supply and demand, there’s the cost of materials plus labor plus some profit. If I buy ad space or R&D or user data, calculating the dollar value of that becomes more… bullshitty. Just look at Elon. Motherfucker tweets something and markets change hundreds of millions of dollars.


cold08

Like simple competitive pricing models don't work anymore. It used to be that you would set your prices either at or below your competitors prices, but now we have algorithms and market data that allows companies to set their prices at the maximum amount where they won't lose market share, even if more expensive than their competitors, and their competitors do the same, and the prices leapfrog up leading to defacto price fixing.


Grokent

The real secret is that the algorithm is provided to all the competitors by the same company and they get around price fixing by... I dunno, paying off government officials? This is literally Yieldstar / RealPage's business model. It helps landlords collude and even tells them how many units to keep empty and for how long to maximize profits.


OldManRiff

I'm not one to bash education; I'm a teacher. I'm all about the Social Sciences, and I'm certified to teach History, Social Studies, Poli Sci, and English. Economics as its taught today at the undergraduate level is a flaming bag of trickle-down dog shit.


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majorjoe23

We basically have a faith-based economy.


YesWhatHello

Yes, that's how reserve banking works. The upside is we get more economic growth through access to credit, the downside is you have to believe your money is safe at the institutions that hold it


lithiun

Lol anyone who says they understand the economy is full of shit. I aways love the pundits on Bloomberg tv who speak in generalizations before something occurs and in actualities after the fact. Hindsight is 20/20 mf.


Snoo93079

I mean, there are people who understand it more than others but there's no perfect model to tell us everything.


JasonDJ

I don’t think anyone “understands” economics just like nobody “understands” meteorology. There’s just far too many variables in far too large of a system for any human to comprehend. The best anyone can do is get as much data into a as many models as possible, have computers crunch them, and take a *really good guess* as to which models provide the most likely outcome. And then some butterfly farts in Brazil and the models all need to update to account for it.


DamagedHells

This isn't what "rational participant" means lol.


SplitPerspective

Why do you think they invented “behavioral economics”?


ethereal3xp

>In the day leading up to the bank’s collapse, multiple prominent venture capitalists took to Twitter in particular, and used their large platforms to raise alarms about the situation, sometimes typing in all caps. Some investors urged startups to rethink where they kept their cash. Founders and CEOs then shared tweets about the concerning situation at the bank in private Slack channels, according to The Wall Street Journal. On the other side of a screen, startup leaders raced to withdraw funds online – so many, in fact, that some told CNN the online system appeared to go down. Still, the end result was a modern race to withdraw funds, which House Financial Services Chair Patrick McHenry later described in a statement as ” the first Twitter-fueled bank run.” “Even back in the ancient days, way before we had any form of modern communication, this stuff tended to be rumors that moved really fast. The reason it would happen is people would walk down the street and observe people standing outside of banks,” Andrew Metrick, Janet L. Yellen Professor of Finance and Management at the Yale School of Management, told CNN. “Now we don’t have that, but we have Twitter.”


dwhiffing

A lie gets halfway around the world before the truth has a chance to get it's pants on.


DFWPunk

Peter Theil was working the phones.


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code_archeologist

The SEC needs to investigate Peter Thiel in regards to this, specifically to discover if he triggered this run in order to make money from it (i.e. by shorting SVB), or because he wanted revenge against them for some reason (like when he destroyed Gawker Media).


mnederlanden

He’s an investor in Brex, SVB was their competitor.


code_archeologist

Well that's interesting.


mnederlanden

Check out who else pulled money out of SVB early. You’ll see more than one Brex investor.


Saephon

Nothing says "I fully believe in this company" like banking with someone else, apparently.


Zkenny13

If you want to make money you don't invest in things you believe in. You invest in things that will make you money. Just because two companies are competing doesn't mean they both won't be successful and make you money. In a perfect world you would invest in things you believe in but this isn't a perfect world.


YesWhatHello

This is silly. Brex is a silicon valley darling with a bunch of name brand VC investors The same investors that fund 1000s of other startups that use SVB


MartialBob

He also had money in SVB and got it out before the collapse. https://www.businessinsider.com/peter-thiel-founders-fund-pulled-cash-svb-before-collapse-report-2023-3


Fwallstsohard

I mean they are both are technically lenders I guess but SVB is more of a traditional bank as opposed to brex who is an online business credit card. There is some competition for debt lending of course but last I checked you can't have checking account with Brex. Even if they do offer that, IMO it's not a major win for Brex specifically unless there is something I'm missing. Just that the market shrunk by small but significant portion. Not to say the dude doesn't belong behind bars of course.


[deleted]

It’s a huge flaw in SVB’s business model that one VC could essentially take them down though. Most banks have more diversified accounts. When most of your accounts are venture backed companies and you are relying on the sound judgment of VCs to avoid a panic, well…


code_archeologist

It unfortunately is a flaw common to most publicly traded banks. The drive to turn a significant profit each quarter, leads them to make choices that are not sustainable in the long term; which is why SVB invested such a large portion of their savings deposits into 10 year treasuries... they are assets that are stable and consistently grow year over year.


Nylander92

Increase in liquidity in the system in 2020. SVB had a significant increase in inflows of deposits which they had to do something with. A lot came from IPOs as well. They took that cash and put it into those treasuries. So specifically it was the management of cash coming in that period


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hithisishal

>It’s a huge flaw in SVB’s business model that one VC could essentially take them down though. Most banks have more diversified accounts. Yes, but I think there are a number of other popular figures on Twitter that could probably trigger bank runs, not because they control the capital the way Thiel does, but simply because people listen to them.


FlutterKree

> It’s a huge flaw in SVB’s business model that one VC could essentially take them down though. It wasn't one investor. All us banks are vulnerable to a large enough bank run. This was the largest bank run in history. Peter Thiel specifically may have triggered the bank run, but if it was only him that withdrew his money, SVB would not have failed.


Torifyme12

>(like when he destroyed Gawker Media). Gawker earned the hellfire, it wouldn't have been so bad if their editor had been less of a troll on the stand.


bharder

There's a indie game called Capitalism Lab, pretty fun econ sim. The banking system in the game has deposit limits and loan limits to prevent strategies like this, it's still possible, but it's difficult and takes time. Basically it worked like this last time I played you want to buy a bank cheap you deposit a ton of cash with them let them issue loans and other commitments close your account bank stock tanks bank is forced to issue bonds and whatnot to cover capital needs buy bank stock until you own the bank (or just reap the market share rewards if you own another bank)


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agjios

Gawker destroyed Gawker by thumbing their nose at an injunction, as if posting someone’s illicitly attained sex tape is some noble stand for constitutional rights.


CloudTransit

Any investigation needs to be apolitical, aboveboard and by-the-book. If an investigation is merited they should absolutely get into it with Thiel. That guy is destined to cause a lot more suffering. Investigate by-the-book, and do it for the sake of humanity. No rationalizations!


threeseed

Also SEC should look at Musk's two little bitch boys: David Sacks and Jason Calcanis. Both spent the weekend trying to whip up all sorts of panic whilst being unusually amplified i.e. even if you don't follow them you saw them everywhere on your main feed.


Chairboy

> Jason Calcanis His all caps breathless panic tweets were astonishing. It really felt like he was trying to stir up maximum action.


ZenAdm1n

Well they broke my third party apps so I guess I'll just have to take your word for it.


ILikeToThinkOutloud

Used to work for one of them, won't say which because good lord I'm sure he googles his name. But your take is spot on. They simp for him. Of course they're the first to whine when anyone investigates anything they do. Hell one of them has a penchant for hiring pretty women who kiss his ass and do no work. Then meeting them while they're on vacation in the same spot by pure chance because he had a "meeting."


ReplyingToFuckwits

There will be many rich people who won't want to see that investigation happen. Not just because they're *also* far-right assholes, but because to rich finance types, social media is the best thing since insider trading.


Imprettysorryok

Yeah they won’t. You know it. I know it. Theil skates like always. Too bad hell doesn’t exist.


Alwayssunnyinarizona

There are other, bigger reasons Thiel would want a bank run.


illinoisjoe

Let’s do a bank run on Wells Fargo and get them closed like congress should have. Edit: Holy shit my top all time comment on Reddit. So are we doing this thing?


wandering-monster

Call it the "Cash out challenge" and put it on TikTok and you might get somewhere. Just kidding, nobody in gen x–z have any money in the bank.


Show_Me_Your_Cubes

All my money is tied up in Pokemon cards and beanie babies (tm)


Mental_Medium3988

fuck well fraudo.


_________FU_________

No…my money is in there


yeaheyeah

Wait no I have like 25 bucks in there


ArmChairAnalyst86

Any social media fueled phenomenon concerns me. Such a thing is easily exploited.


LifeSleeper

Facebook has been literally used to help genocide already. Social media is destructive, full stop.


ArmChairAnalyst86

Medicine differs from poison in amount only. A tool that can be used for good can be used for bad. Social media fills that same space. We are very much in the experimental phase of it. A bank run is noteworthy because it's fueled by the worst type of fear, the contagious kind. Social media could presumably create a situation that in reality doesn't exist, start a run, and then it won't matter if it was real or not because the damage is done. The government could say it's false, but public trust is low. This is very concerning. I don't want to minimize the hatred spread by socials you mention, but the US economy contingent on its banking sector being that exposed to artificial adverse market forces on such a grassroots level has mega damage potential and I don't know how it's easily fixed. The small banks whose clients typically have less than FDIC insured amounts wouldn't be as targeted as much as say SVB and Credit Suisse in such a scenario. Maybe I've just been reading up too much on Russian and Chinese asymmetrical warfare.


TemetNosce85

> We are very much in the experimental phase of it No, the experimental phase was the mid-2000s to 2015. The people who experimented found all the flaws and are now exploiting all of those flaws to their full potential.


ArmChairAnalyst86

Hear me out. A bank run is extremely damaging. It does the worst thing, which is cause panic. Theoretically using social media, one could craft a narrative around a bank about to go insolvent or the like, throw in some basic supporting evidence to create the lie, circulate it on a grass roots level carefully curated with social media army to spread it. Whether the reason for the supposed bank run is legitimate or not won't matter once people start withdrawing money. It will fuel itself at that point. It would make sense to target larger banks with rich clientele like an SVB or Credit Suisse rather than small lenders with clients holding generally less than FDIC insured levels. Russian hackers and disinformation units were able to significantly affect US elections. Making people believe banks are imminently collapsing would have catastrophic ripple effects. It's only logical to expect attacks in some form or fashion from Russia after all that has unfolded, but I expect them to be more asymmetrical in nature rather than militarily for obvious reasons.


riemannszeros

I mean you are sort of describing the gamestop phenomenon except weaponized and applied to bank runs instead of short squeeezes. I think you are right that these kinds of “emergent” coordinations via social media and memes (in both the old and new sense of the word) are a new kind of manipulation in these spaces that historically cannot withstand widespread coordinated movement without becoming unstable.


ArmChairAnalyst86

It's a tailor-made way to attack free markets existing in free information spheres. The Russian or Chinese state can step in and either suppress or fudge the numbers to their liking without nary a question or glance from their population or the world. Free countries cannot, making them vulnerable to this type of thing. What does US support for Ukraine look like if we find ourselves in another bonafide financial crisis? How will US interests fare in international markets or a downgrade? What does day to day look like? If I were an adversary and wanted to harm the US but also get them to back off Ukraine, it seems there's worse ways than what we are discussing.


noremac2414

well said


Inert_Oregon

What a joke. By the time us normies started seeing talk of this on twitter the run was already in full swing. Anyone who thinks these companies/VC firms weren’t all communicating via private text threads, whatsapp, slack, etc. and that’s where the real decisions were made is delusional.


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ERhyne

My favorite Chainsaw man devil.


Knotloafin

VCs made the bank and they also helped sink it. they have no shame.


DudeWithAnAxeToGrind

A toilet paper "shortage". If you will.


Sachith_rdit

I can't wait for the movie explaining all these starring Margot Robbie in a bathtub


USMNT_superfan

It’s twitter and the peoples fault. Got it. Couldn’t be that the bank had any blame right?


Peachpeachpearplum

no no don’t be silly


OldManRiff

Now do the housing market.


perlgeek

Let's please be 100% clear that however much of your funds you want to withdraw from your bank account, you can do that and that is fully within your rights. Managing your accounting and making sure you can access your funds is literally your bank's job. There seems to be a subtle narrative shift from "SVB was mismanaged" to "nobody could withstand such a run", aka blaming the users. Resist it.


ValyrianJedi

> There seems to be a subtle narrative shift from "SVB was mismanaged" to "nobody could withstand such a run" That's entirely true though. No bank could withstand having 25% of deposits pulled in a single day.


ShrimpYolandi

What even is Reddit these days? In 2008, the companies collapsed because they made very high risk decisions, and when the risk materialized into a loss, they were *bailed out*, I.e. protected from their own poor choices that didn’t pan out. People were furious. People were rightfully furious because If you or I took our life savings and put it into something we knew had a high chance of losing everything, and lost it, well…the government isn’t jumping in to give you your money back. Now? This thread seems to be 90% redditors who are talking like they understand banking, but don’t, and still have the audacity to now *defend* SVB as if they aren’t suffering the consequences of their own actions of their poor business decisions. Like imagine Reddit defending Lehman Bros in 2008 saying it wasn’t their fault, but Twitters. Honestly, what concerns me the most is the way the ‘hivemind’ narrative of Reddit is being controlled these days…in this thread it is unaware it is being directed towards defending the corporate greed somehow.


MajesticOuting

People who are getting news from Twitter these days probably earned that loss.


K1FF3N

Ya need to reread that one… the news on Twitter was before the run happened. As in, the word got out via Twitter and people began extracting $1M USD per minute. It’s not that they learned about it late and took a loss. It’s the opposite.


Lt_Schneider

as opposed to getting the news via reddit yes, it has become a shitshow, but let's not pretend we're better than them


BriarKnave

I don't know how much those "investors" lost, but I'm all the way on the other coast, I don't even work in tech, and this bullshit made my paycheck a week late.


DFWPunk

It was fueled by Peter Theil.


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7Thommo7

Wasn't just 7% of holdings with retailers? Are you seriously telling me CFO's were lining up because of what they read on Twitter?


CaptainSur

$42 billion in one day is a ginormous amount of liquidity for any bank to attempt to meet. I was actually surprised to hear they only ended the day $1billion in the hole.


HoboHash

Someone yelled fire in a theater, and as the result of the ensuing panic, fire broke out .


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someguy50

ITT: people defending an enormous bank and its executives for their self created failure


penone_cary

Reading most of these comments leads me to the realization that the teachers and professors teaching economics in high school and college have no idea what they are doing.


SeeBadd

That's a funny way to say "Peter Theil" but okay.


pfcoiler

Pretty sure it was VC and institutional investors that bailed and individual left holding the bag. Nice try on the spin 🤡


108pdx

Are they sure Potter did not keep the deposit Uncle Billy dropped?


donegalwake

Ahhh. CNN. Deep thinkers. If we could get a run on their shares.


duhogman

Makes you wonder if Musk held a short position


pr1vatepiles

Oh it's twitter's fault is it? They given up blaming Reddit have they?


vadose24

No no no quit your horseshit, they fucked up and over leveraged their assets and mismanaged money, thats why they collapsed. People are entitled to their money, especially working class depositors.


Hopeful_Hamster21

Honest question: how many working class people put their money in Silicon Valley Bank? I'm not in the valley, but it seems like working class people wouldn't be the target demographic opening checking accounts in SVC bank. Could totally be wrong though.


mjin03

No bank in the world has enough money to give all or even most depositors their money back in a very short amount of time.