Silicon Valley Techno-Utopianism

wow

Hopefully someone will buy the bank, but I don’t think there’s any appetite for the federal government to bail out the bank. - @SpeakerPelosi on SVB at @TheAtlantic’s event now #SXSW23.

— Anna Bross (@AnnaCBross) March 12, 2023

FWIW I looked up that family's political contributions and it's all Fetterman, Warnock, and Tim Ryan, though the contributions are pretty small given how rich they presumably are; I guess all the money goes back into the business!

interesting thread, might be some sort of fraud happening

So the conclusion is 1 of 3:
* The whole of Silicon Valley has no idea how to run a competent business
* There was some financial chicanery that led to a requirement to bank at SVB without an ICS backstop
* This is all a Big Lie to engineer a bailout@DavidSacks can tell us which

— David Dayen (@ddayen) March 12, 2023

I have had a dozen clients over the years who used SVB.

This is a good summary:

https://themacrocompass.substack.com/p/banking-crisis

the FDIC has a list of all the failed banks since 2000, about 550 -- California has a few dozen on the list. I didn't see any failed banks in Massachusetts, only a couple in Connecticut and NY (states that seem very bank-y), not very many in Texas either, but damn ... Florida and Georgia have had a lot of failed banks in the past 23 years.

xp - I don't know if I'd call categorizing bonds as "Held to Maturity" an "accounting trick" when these are assets that tend to be held to maturity. The "trick" to me is considering them eligible to be "liquid assets" if they are supposed to be "held to maturity" and that maturity isn't gonna happen for a few years. Because that's not very liquid.

https://www.bloomberg.com/news/articles/2023-03-12/fdic-auction-for-svb-said-to-be-underway-final-bids-due-sunday

It Is Happening

h8 to Take a Haircut

love to Be Made Whole

itt a normal person interacts with a valley titan who understands how life would collapse without startups

seems like a good opportunity to realize a lot of regular people are resentful of that "wealth creation engine" because it was run primarily for the benefit of insanely elitist and arrogant people at the expense of the rest of the planet

— lauren (@NotABigJerk) March 11, 2023

oops mookie, i see you posted about the wealth creation engine yesterday

Ok I’m feeling better that the government isn’t going to bail these creeps out.

Way back my friends and I started a bank. It was moderately successful but ultimately acquired by BBVA and shuttered. I have a lot of regrets about that experience. I’ve been trying to convince that same group of friends to join a bid for SBV and nobody is interested. I feel like this is my mid-life crisis moment. I believe it’s an absolute steal at the rumored bids and could be a way to make banking better for everyone but I know JPM will acquire it for nothing and nothing will ever change.

Humblebrag

Maybe

My friends and I started Wachovia as a goof out of college.

Credit unions already exist and are fine, Simple was nice but nothing saddled with VC money will ever be good in the long run is the lesson of the past decade

Observe that the Three Good Websites (Lichess, Bandcamp, Letterboxd) are not VC unicorn moonshot money holes, Silicon Valley has produced nothing of enduring value since approximately ever

wikipedia is a pretty good website

lol otm

Wikipedia’s kinda annoying to me tbh

when i started on lichess ~5 years ago these numbers were usually 9 and 3k, people flock to a good site

122,147 players
51,662 games in play

i donate monthly its a good site

where the incumbent chess dot com tries to nickle and dime you to death

also the guy started it just as a programming project he wasnt even trying to get it popular but early on when it didnt even really work like you could make illegal moves some players found it and started making bug reports and it turned into a real thing

but...why would he do that if the overwhelming drive wasn't to make as much money as quickly as possible and then sell it to fund his next venture? what a total weirdo

Yeah that’s the thing right, all this VC money creating huge valuations on stupid capital-intensive plays trying to become an instant monopoly like Uber or Facebook when like making the first version of a website is relatively cheap if you make a nice version of something people obviously already want they will use it and eventually spend a lot of money because they like your nice website

All these things derided as “hobby businesses” by the valley mindset are gonna last forever bc they are obvious and cheap

its open source too i tried to contribute but i dont know scala or understand oop also the code isnt really documented lol, they do have a discord tho, i shd try again

https://pbs.twimg.com/media/FrCghUiWcAAYPPt?format=jpg&name=small

these guys

The learn to code VC genius types wiped out their own troubled but probably ultimately solid bank because they were all in a group chat together and panicked. https://t.co/QimOqdlrQT

— Evan Hill (@evanhill) March 12, 2023

PS. Companies I cofounded:https://t.co/XvZaberYhx (AI that handles your remote job search and recruitment)https://t.co/wUMOlRjizm (a new communication platform for remote teams)https://t.co/4yb9wyp406 (outsource the creation of creative assets at scale)

— Alexander Torrenegra (@torrenegra) March 12, 2023

https://www.washingtonpost.com/us-policy/2023/03/12/silicon-valley-bank-deposits/

government backstop as plan b

Giannis Antetokounmpo with next level risk-management skills pic.twitter.com/JSHPVhGEDW

— Trung Phan (@TrungTPhan) March 11, 2023

All these things derided as “hobby businesses” by the valley mindset are gonna last forever bc they are obvious and cheap

― G. D’Arcy Cheesewright (silby), Sunday, March 12, 2023 2:10 PM (two hours ago) bookmarkflaglink

Speaking of, did you all see pinboard self-cancel?

i’ve been busy all day today but nobody is going to lose their deposits. even the uninsured ones. theres more than enough assets at fair prices to cover the deposits. depending on how it plays out i could also see the unsecureds ending up money good

— 3.9% symmetrical objective proponent (@NewRiverInvest) March 11, 2023

Speaking of, did you all see pinboard self-cancel?

― 𝔠𝔞𝔢𝔨 (caek)

no lmao what happened

Oh he posted some garbage about JK Rowling, whatever, he also got really mad about men wearing shorts once

It turns out a bookmarking site is completely useless to me and I never converted my account to recurring payment so I don’t really care what he’s canceled for

Most people are smart about some things and really stupid about other things, but it’s impossible to know which is which, which is why you should never post

Breaking: PNC is out. According to a source familiar, PNC sent an initial notice of interest to the FDIC to help with SVB. PNC held brief & preliminary discussions w/ FDIC. But after conducting initial due diligence, PNC informed FDIC yesterday that it decided not to move forward

— Sara Eisen (@SaraEisen) March 12, 2023

https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312b.htm

crisis over folks, time to go home

whats this are people thinking the bank run was done on purpose cause they didnt like svb

Syndicate Of Wealthy Industrialists Orchestrate Bank-Run To Depose Regional Powerbroker

this is a Julian Fellowes side-plot. A modern reboot of Vanity Fair (ok, kinda stretching it). Looking forward to this being in the next season of Gilded Age.

— 3.9% symmetrical objective proponent (@NewRiverInvest) March 11, 2023

That person has not read Vanity Fair.

well thiel did shout fire in a crowded theater xp

deliberately causing a bank run on the bank where all your companies have their money seems like a bad idea but obvs we dont know everything atm

i thought he started the run by pulling his money out?

in any case he absolutely seems like the kind of guy who's willing to take a loss if it completely fucks over someone he dislikes

it started with him encouraging his companies to pull their money out but theres no guarantee they all get it out its a pretty chaotic sitch to eff with

also if all he and a lot or basically all vcs require their companies to bank there they must like it, because of something like this i guess

trying to work out exactly what the moral hazard with SVB is, despite "just making depositors whole": VCs liked it because the bank trusted their valuations when making loans to them, in turn we get startups being told by VCs to use SVB, leading to massive uninsured deposits

— joolsd (@joolsd) March 13, 2023

Good summary for me.

https://blog.danieldavies.com/2023/03/it-what-it-is-it-is-understandable-that.html?m=1