Hey guys, it's Sasha on Friday Silicon Valley Bank One of the top 20 banks in the US collapsed and over the last 24 hours the dimwit media and a bunch of numpties on Twitter are advocating for a bank run tomorrow on Monday morning you see last time we had the financial crisis in 2008, Myspace was 20 times bigger than Twitter and the first iPhone had only just been announced. but today we have a bunch of degenerates on social media and across TV screens making the collapse of Silicon Valley Bank into an opportunity to sell fear and help themselves. I want to share some thoughts on these imbeciles and I apologize but the language May occasionally be caused because the situation has really gone out of hand and I am pissed off. First up: Bill Ackman The billionaire investor went on a Twitter parade because I am guessing he and his Venture Capital buddies have some money hanging in Silicon Valley Bank He has been tweeting approximately 69 times every hour that the FDIC has to guarantee all Bank deposits in the US by Sunday night it is perspective of the two hundred fifty thousand dollar insurance cap and while they're at it, they should recapitalize the bank and give them a boatload of free money.

When a few people pointed out that Bill Ackman is in fact a clown trying to protect his Investments he said no I don't have any direct exposure to Svb nor does perishing Square before completely contradicting himself and saying I am personally an investor in some of the less well-known and mostly seed stage Venture and biotech funds and some early stage startups that may have some exposure to Svb. Collectively, my Venture exposure is less than 10 percent of my assets. So given the Bill Ackman is apparently worth 3.4 billion dollars, that means that he in fact could have hundreds of millions of dollars hanging in this. Silicon Valley Bank Scandal If you think he gives a about people losing their jobs or some kind of altruism or anything else like that, the answer is no, it's every man for himself.

The guy is out there trying to get the taxpayer to pay for his stakes in having companies that he's invested in park all of their money in one obscure high risk. Bank The verbal diarrhea coming out of all of these clouds on Twitter is becoming nauseating. David Sax is on Twitter predicting an apocalypse. Apparently all startups are going to die.

There is no way out of here and the contagion from Silicon Valley is now going to spread. and on Monday morning the whole financial system is going to collapse. And if you didn't know, David Sachs is also a venture capital investor. What a coincidence, right? Funny how all of these weenie babies crying on Twitter about an imminent collapse just happened to be investors in the companies whose money is sitting in that.

Silicon Valley Bank It's almost like if they all shout about a bank run in concert and pay all the mainstream media to shout about it as well and get all the idiots to jump on the bandwagon because it's popular, Then people are going to panic because that is exactly what people are going to do if they are told that the world is about to burn and they might lose all of their money out of nowhere. But here is the problem. The situation at Silicon Valley Bank is very specific to Silicon Valley Bank. Reportedly over 97 percent of the deposit Silicon Valley Bank were not covered by FDIC Insurance because there were well over 250 000, almost all of the money.

All the deposits sitting in the bank are not retail deposits. They are business deposits. This is not the same situation as at every other bank. so don't listen to the pathetic rhetoric that this collapse will primarily impact regular people.

That isn't the case. Regular people don't have over 250 000 sitting in their bank accounts, and regular people don't happen to bank with Silicon Valley. But then there's the argument that all of these companies are now not going to be able to make their payroll and thousands of employees of those tech companies are going to lose their jobs. Well, here is a question: Why do you think Is it that all of these Tech startups such a huge number of them, pretty much all of them on the west coast funded by VCS happen to use the same one random bank? And why is it that they don't do the most basic risk management tactics that any normal company does and keep their cash in many different institutions and not just in cash deposit accounts? The answer is because apparently many of the Venture Capital deals had a condition where these Founders had to bank with Silicon Valley Bank and had to keep all of their money there.

And the next question is, do you think any of these guys asked the question, why did someone hold a gun to their head and say you have to take this Venture Capital money and you have to take it on these terms or we're going to kill your family Is that roughly how it went down? Why do you think that none of the big Banks offer the same kind of terms to these startups and Venture Capital companies? Why is it that Silicon Valley Bank offered Founders and investors cushy mortgage deals a whole bunch of ridiculous perks so that they could go and buy extravagant properties near San Francisco that no other bank would Finance Given the speculative and high-risk nature of those startups, the situation with Silicon Valley Bank is unique because their balance sheet grew by 200 percent. during the covet gambling period where money was flowing in, there was IPOs going through the roof, stock valuations went absolutely nuts and when the balance sheet of the bank went from 70 billion to 200 billion or whatever, they went and bought a boatload of 10-year low yield treasuries because they wanted to secure higher yields while short-term treasuries weren't paying anything. I Guess working with the General gamblers rubs off a little and this is a management problem however, fiduciary duty to appropriately manage risk of the bank which they did not do. But this is not a taxpayer problem you see sometimes happens in business, sometimes you make mistakes.

You might not realize that you made a mistake until after it blows up in your face, but you still made those mistakes unknowingly. And when you a bad, it isn't always someone else's fault and it's not the government's job to come and rescue you every single time. If all of you guys went and chose to bank with this one very specific bank for whatever reasons that you had to only work with that one bank and no other bank, maybe take a look in the mirror and think why it is that that happened and why did it all blow up Venture Capital Firms and high-risk startups kept their deposit to Silicon Money Bank Because they were greedy because they got unique perks no other bank would give them and because it was cool. There is a reason why these guys didn't bank with: JP Morgan A Bank of America is the old school Banks You don't get it.

There's no technology friendly, blah blah blah. And here is the worst part. The only reason that Silicon Valley Bank blew up is because there was mass hysteria and a bank run. Sure, they had some long-term bonds that had low yields and the management really screwed up in doing it.

But without a bank run, exactly nothing much would happen at all. Over time, new deposits would go and buy higher yield bonds which would dilute and replace the low yield ones that are coming to maturation. Just like how every other bank over time manages their balance sheets. As of the end of Q4 Silicon Valley Bank had 173 billion dollars in deposits.

this is customers money and they had 212 billion dollars in assets, of which 120 billion sat in cash and securities and another 74 billion dollars was lent out. Their asset pile was 22 percent higher than client deposits, and when they liquidated their available for sale assets to pay for the bank run, they had to take a haircut of less than nine percent. So the overwhelming likelihood if you just look at the numbers is that the majority of the deposits above 250 000 will be paid out by FDIC to the companies that held it there. There's a chance that 100 or very close to 100 of their deposits will be paid out.

It might take a few weeks, maybe a month or two. There is a lot for FDIC to do. This is not a usual sort of situation, but this is not. FTX The money hasn't mysteriously disappeared through a back door, but all of these idiots are creating this.

Panic Here's Jason Calacanus from the All-in podcast. Who else is going to buy some guns, provisions, and gasoline tomorrow? Me: these lowlifes need to look at themselves in the mirror and think about what they are doing. The panic and misinformation being thrown around is much, much more dangerous than the high interest rates, causing all treasuries to be worth a little less than they used to be worth. A few years ago, the Venture Capital firms and startups went and did a bank run on Silicon Valley which then collapsed the bank.

They shot themselves in the foot. They literally created the issue that caused their own money to be locked up, but now they're all sitting there holier than now asking for the government to come and save them. Cry me a river. The biggest problem here is that the state of Mass hysteria being drummed up by these mindless idiots is the problem that is a much bigger threat to cause an actual bank run and have actual ramifications.

Bloomberg has now added CNN has added I'm sure later today, everybody else is going to be added. Social media is exploding. This is extremely irresponsible because a lot of people are not financially. Savvy A lot of people don't know that their regular bank account is FDIC insured for up to 250 000.

A lot of regular people are going to consume all of this scare mongering and go queue up on Monday morning like they're being told outside their bank for no reason whatsoever. And what will happen to all of these greedy trying to whip up the hysteria just so they can get their money out of Silicon Valley Bank more quickly. Exactly nothing. And this is the problem if the government comes out and guarantees all Bank deposits and every U.S Bank Like these guys are asking: what is the incentive for any bank to actually do any risk management? What is the incentive to not gamble like a lunatic and try to make crazy money? What is going to happen to the executives of Silicon Valley Bank Are they going to prison and serve serious time for a big no? I Didn't think so.

If the US government is going to guarantee every deposit in every U.S bank, then I Suppose every U.S Bank might as well just be nationalized. or should the U.S taxpayer bear 100 of the risk and have a zero percent stake? Is that the appropriate way to manage this? If every U.S Bank is nationalized I Suppose these Silicon Valley venture capital firms and startup Founders might actually have to pass I don't know, stringent risk checks? Maybe due diligence before you know getting obscene Loans To Buy Stuff Where the company is loss making and have significantly more restrictive bank accounts without all the perks that are more applicable to the level of risk that their companies might run out of money any day. or do Bill Ackman David Sacks and Jason Colcannis and all the rest of them just want the government to pay for every risk for every misstep they make like a 25 year old asking mom and dad for a loan because they blew all their money on going out and a car they couldn't afford. So I am sorry, but can all the Venture Capital numbnuts go unkindly themselves and stop trying to force mass panic just because one of their gambles blew up in their face?.