GBA Presents: RADIO SAVANT-!

stonedinvestor said:
Finally waking up! Good. That has been our call in print, it looks stupid when you go against it.
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Any bounce will of course be short lived, I doubt my 4144 will be seen. Your 4200 is out of the question for now... so... "don't sound stupid"... and trade the levels and direction I write here.
We've proven who GBA's chart-master is.
Especially with the S&P down 3.5% from the day you called Stoney's rally last Monday and dared to question VZ.
 
TC: You were on CNBC this morning, where you said that you believe portfolio companies should have been diversifying where they hold their money all along. But my understanding is that Silicon Valley Bank required many startups to have an exclusive relationship with it.

MS: SVB generally doesn't require exclusivity unless you take out debt. The problem is that a lot of people take out debt, and we've been warning [portfolio companies] about this for a year.


There is always greed at the root and this debt did it come at an advantage to other debt?
What % was Silicon charging compared to other banks--
 
Investor Mark Suster says a "handful" of bad actors in VC destroyed Silicon Valley Bank

Did Upfront get its money out of SVB?

No.

Are you worried because you didn't get your money out?

No. I heard about $12 billion exited from SVB yesterday, and SVB has a little under $200 billion in assets, so that's 6.5% to 7% of [its assets] that left in one day. That's not catastrophic, but the Fed knew that was going to accelerate. They don't want a bank run, so my guess is that the Fed, in a perfect situation, would like someone to buy SBV, and I suspect they are talking with every bank and doing a review as we speak.

Are you surprised no one has stepped forward yet?

Imagine you have a whole bunch of people evaluating buying a bank. How do you evaluate it when you don't know how much is fleeing? How do you catch a falling knife? By [shutting down SVB this morning], the Fed stopped that knife from falling; now, I think we'll see an orderly sale by Sunday. JPMorgan, Bank of America, Morgan Stanley, [someone will step in to buy it]. Then I believe panic will stop, because if you are pulling out of SVB because you are worried about SVB, that will no longer be a concern.

How will SVB be valued by a buyer? Its market cap was about $6.3 billion when it was shuttered this morning.

A bank's valuation is correlated but mostly uncorrelated from its assets. You have debt holders and equity holders, and if a company goes bankrupt, debt holders get money before the equity holders. What people were betting with SVB is that the common stockholders weren't going to get anything because SVB was going to go bankrupt; [its market cap and assets] became uncorrelated because they didn't think SBV would survive.

What matters is: are there assets and is there value here? SVB is lender to a very cash-rich and well-run tech industry and these clients are coveted. SVB doesn't just serve startups but VC funds and PE funds. Imagine that in one fell swoop you get access to them? It's why a bunch of firms are working with the Fed, trying to figure out [what's what] right now, including a bunch of hedge funds and other large PE funds, as well as banks.

Would a big bank face antitrust issues here, trying to acquire SVB?

The Fed has one objective, and that is to avoid contagions. Every other regional or not-scaled bank right now is being hit. That's why they will force something to happen by Monday.

You don't think bankruptcy is the next step? Isn't that what happened with Washington Mutual? Buyers want to buy the good assets and leave all the liabilities with the government, don't they?

This isn't officially bankruptcy, but it's as close as you get. Will [a buyer] give money to equity holders? I think those shares could go to zero; an acquirer might well decide they don't want to bail out equity holders, but shareholders are different from depositors.

Speaking of which, is Upfront extending bridge loans to any startups that have lost access to their money for now at SVB?

This is 24 hours old. We will likely start those conversations next week. We told our CEOs that if you are in a position where you need a bridge loan in the next two weeks, you should assemble your board, because this is a decision that needs to be reached by a board of directors. If people believe in your prospects, it shouldn't be hard to get money for one to two payrolls. If they don't, it may accelerate your demise, but [going out of business] was probably going to happen anyway.

I have to wonder if you were publicly trying to calm your peers while privately advising founders to move their money out of SVB, just to be on the safe side.

I assure you I did not. Every single VC I know was telling people, 'We think your deposits are safe with SVB. It would be prudent to take some money because you could have a liquidity crisis for a week, but we don't think a run on the bank makes sense.' Experienced, professional VCs of Silicon Valley understand that a bank run damages everybody.

Are you saying the partners at Founders Fund and Coatue and Y Combinator are not experienced, professional VCs? They were among the firms that reportedly advised their startups to get their assets out.

No. I said a handful of people were telling people to run for the door and congratulating themselves for it. Leave aside what this does to SVB. If the Fed didn't step up, how many bankruptcies would there be and other knock-on effects? These VCs are congratulating themselves. I'm seeing emails from VCs to their LPs -- of which I am in some firms -- and they are forwarding these things like, 'Aren't I super smart?'

How many of your companies won't be able to make payroll because of this shutdown?

My guess is this is solved by Monday or Tuesday and it will impact very few people. If it extends beyond a week or two, it will impact a lot of companies across the industry. Anyone who has payroll today or Monday needs investors to do quick bridge loans from investors or to delay payroll for 48 hours.

Can this really be resolved so quickly?

What gives me confidence is the Fed knows [the implications if it doesn't].
 

Yellen says no federal bailout for Silicon Valley Bank
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7bd6195a4163fd852371eede3241d2e4


Yellen, in an interview with CBS' “Face the Nation,” provided few details on the government's next steps. But she emphasized thatthe situation was much differentfrom the financial crisis almost 15 years ago, which led to bank bailouts to protect the industry.

“We’re not going to do that again," she said. "But we are concerned about depositors, and we’re focused on trying to meet their needs.”
 
Silicon Valley Bank began its slid into insolvency when its customers, largely technology companies that needed cash as they struggled to get financing, began withdrawing their deposits. The bank had to sell bonds at a loss to cover the withdrawals, leading to the largest failure of a U.S. financial institution since the height of the financial crisis.

A) Struggled to get financing

B) Silicon offers financing

C) But you have to keep your money with us.....


Yellen described rising interest rates, which have been increased by the Federal Reserve to combat inflation, as the core problem for Silicon Valley Bank. Many of its assets, such as bonds or mortgage-backed securities, lost market value as rates climbed.

“The problems with the tech sector aren’t at the heart of the problems at this bank,” she said.

Yellen said she expected regulators to consider “a wide range of available options,” including the acquisition of Silicon Valley Bank by another institution. So far, however, no buyer has stepped forward.

Regulators seized the bank's assets on Friday. Deposits that are insured by the federal government are supposed to be available by Monday morning.

“I’ve been working all weekend with our banking regulators to design appropriate policies to address this situation," Yellen said. "I can’t really provide further details at this time.”



<<<<<< >>>>>>>

This is all well and good. I do think there is a very strong feeling not to bail out anyone after the last go around of To Big To fail..../ some even want to see a fail to prove that the sytem can take it... I get that.

But what of: rising interest rates, which have been increased by the Federal Reserve to combat inflation, as the core problem --> Many of its assets, such as bonds or mortgage-backed securities, lost market value as rates climbed.

Wouldn't that be the real ticking time bomb not these tech start ups...//

There is little want to help out the VC community and Mark Cubin.... but what of other banking institutions with large losses on the books due to rising interest rates. How many played this rate-hike cycle wrong....
 
stonedinvestor said:
Wouldn't that be the real ticking time bomb not these tech start ups...//

There is little want to help out the VC community and Mark Cubin.... but what of other banking institutions with large losses on the books due to rising interest rates. How many played this rate-hike cycle wrong....[/B]
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Find a bank, look at its latest report... and do your homework instead of waiting around for someone else to find it and write about it --- and in the process, wind up late to the party. As usual.

Here, I'll even show you how to do it in my unending benevolence in holding your hand and teaching you how things work.
https://www.elitetrader.com/et/thre...g-on-patrick-boyle.373107/page-2#post-5777930
 
vanzandt said:
Stoney!!!!
Get ready for a nice bounce.
CPI will come in nicely, and WS will think Powell will back off now in light of the SVIB failure.
Write it down Stoney.
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HEY STONEY!!!
Look at those futures!
Up 50 points on the ES.
Damn I'm good.
Hey before we bury The Lizard King... can we skin him and make me a pair of cowboy boots?
>>> 77-0 :p
 
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