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Silicon Valley Bank, The Rand disciples scream for government bailouts [1]
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Date: 2023-03-11
CNBC has an article here about the investor whine being squeezed out of the failure of Silicon Valley Bank (Great explanation on the failure by stratocruiser here) Stratocruiser’s diary notes that over $153 Billion of the $175 Billion on deposit was in accounts over $250,000 — the maximum amount insured by the FDIC.
The CNBC article talkes about the expectation from all the Venture Capital (VC) funds that had money in the bank calling for the federal government and Federal Reserve Bank to force another bank to buy SVB to cover all those uninsured deposits.
Venture capitalist and former tech CEO David Sacks called for the federal government to push another bank to buy SVB’s assets, writing on Twitter, “Where is Powell? Where is Yellen? Stop this crisis NOW. Announce that all depositors will be safe. Place SVB with a Top 4 bank. Do this before Monday open or there will be contagion and the crisis will spread.”
Yup, socialize our losses and get us paid back. However, these whiners are getting pushback from the investment community:
Many in the tech community blamed VCs for spurring the run, as many told their portfolio companies to put their money into safer places after SVB’s Wednesday announcement. “This was a hysteria-induced bank run caused by VCs,” Ryan Falvey, a fintech investor at Restive Ventures, told CNBC on Friday. “This is going to go down as one of the ultimate cases of an industry cutting its nose off to spite its face.”
So, let’s see — we ran to get our money out before everyone else and caused the bank to crash. So, feds, see you have to save us or the whole system will fail (and we won’t get our money back).
And there is the additional viewpoint that maybe irony hasn’t been killed by the venture vulturalists (though they try):
Observers are calling out the irony as some VCs with notoriously libertarian free-market attitudes are are now calling for a bailout. For instance, reactions to Sacks’ tweet included statements like “Excuse me, sir. Suddenly the government is the answer?!?” and “We capitalists want socialism!”
Finally, there is further proof that the GQP has decided that its money is coming from the billionaires and not Wall Street. The last person I would have thought would take the stand of let the rich pay their dues, Mr. High School Vulture himself, said let them eat nothing:
Some politicians opposed any bailout, with Rep. Matt Gaetz, R-Fla., tweeting, “If there is an effort to use taxpayer money to bail out Silicon Valley Bank, the American people can count on the fact that I will be there leading the fight against it.”
My bet is this White House will bail out the rich guys, make the taxpayer pony up the money, and claim they are doing it to “help the home town banks”. I hope I am wrong and that Senator Warren can shut this down right now. But I won’t depend on it.
Once again, reward gets taken by the rich, the failed risk gets punted to the rest of us if they get their way.
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https://www.dailykos.com/stories/2023/3/11/2157528/-Silicon-Valley-Bank-The-Rand-disciples-scream-for-government-bailouts
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