<story><title>SVB collapse could mean a $500B venture capital ‘haircut’</title><url>https://www.bloomberg.com/news/articles/2023-03-24/svb-debacle-could-mean-a-500-billion-venture-capital-haircut</url></story><parent_chain><item><author>kurthr</author><text>Play bank run games, win bank run prizes.&lt;p&gt;Really, I don&amp;#x27;t love the regulatory arbitrage played by SVB and unhedged duration risk, nor the moral hazard created by the bailout, nor the somewhat bizarre attitude of companies holding huge $100Ms of uninsured deposits earning minimal interest (why have more than 1 months cash flow?), but really this was a bank run pure and simple. When you have to plan to lose &amp;gt;20% of your deposits in a single day you&amp;#x27;re not a bank anymore. That is a money market account or some other product, which doesn&amp;#x27;t lend long. It&amp;#x27;s a bit apropos that those who started the run will pay part of the price, although there&amp;#x27;s a LOT of collateral damage, and I don&amp;#x27;t doubt those who started it will ultimately turn that to their advantage since they have the deepest pockets.&lt;p&gt;&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.cnn.com&amp;#x2F;2023&amp;#x2F;03&amp;#x2F;14&amp;#x2F;tech&amp;#x2F;viral-bank-run&amp;#x2F;index.html&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.cnn.com&amp;#x2F;2023&amp;#x2F;03&amp;#x2F;14&amp;#x2F;tech&amp;#x2F;viral-bank-run&amp;#x2F;index.htm...&lt;/a&gt;&lt;p&gt;BTW you can blame the Fed for low interest rates, but it&amp;#x27;s the yield curve inversion and long rates which caused the liquidity&amp;#x2F;solvency problem not the short term rate hikes (not raising short rates would increase inflation expectations and push 10y rates even higher!). And there is no hard line between solvency and liquidity, because it all has to do with time scale. If I say you have to give me $1000 in the next 3 seconds or I take your car, you can&amp;#x27;t do it because you can&amp;#x27;t reach your wallet fast enough.</text></item></parent_chain><comment><author>akira2501</author><text>&amp;gt; you can blame the Fed for low interest rates, but it&amp;#x27;s the yield curve inversion and long rates which caused the liquidity&amp;#x2F;solvency problem not the short term rate hikes&lt;p&gt;I blame the bank management.  They left the risk management position open and spent way too much time, money and effort on marketing during that period of time rather than shoring up their shaky position.</text></comment>
<story><title>SVB collapse could mean a $500B venture capital ‘haircut’</title><url>https://www.bloomberg.com/news/articles/2023-03-24/svb-debacle-could-mean-a-500-billion-venture-capital-haircut</url></story><parent_chain><item><author>kurthr</author><text>Play bank run games, win bank run prizes.&lt;p&gt;Really, I don&amp;#x27;t love the regulatory arbitrage played by SVB and unhedged duration risk, nor the moral hazard created by the bailout, nor the somewhat bizarre attitude of companies holding huge $100Ms of uninsured deposits earning minimal interest (why have more than 1 months cash flow?), but really this was a bank run pure and simple. When you have to plan to lose &amp;gt;20% of your deposits in a single day you&amp;#x27;re not a bank anymore. That is a money market account or some other product, which doesn&amp;#x27;t lend long. It&amp;#x27;s a bit apropos that those who started the run will pay part of the price, although there&amp;#x27;s a LOT of collateral damage, and I don&amp;#x27;t doubt those who started it will ultimately turn that to their advantage since they have the deepest pockets.&lt;p&gt;&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;www.cnn.com&amp;#x2F;2023&amp;#x2F;03&amp;#x2F;14&amp;#x2F;tech&amp;#x2F;viral-bank-run&amp;#x2F;index.html&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;www.cnn.com&amp;#x2F;2023&amp;#x2F;03&amp;#x2F;14&amp;#x2F;tech&amp;#x2F;viral-bank-run&amp;#x2F;index.htm...&lt;/a&gt;&lt;p&gt;BTW you can blame the Fed for low interest rates, but it&amp;#x27;s the yield curve inversion and long rates which caused the liquidity&amp;#x2F;solvency problem not the short term rate hikes (not raising short rates would increase inflation expectations and push 10y rates even higher!). And there is no hard line between solvency and liquidity, because it all has to do with time scale. If I say you have to give me $1000 in the next 3 seconds or I take your car, you can&amp;#x27;t do it because you can&amp;#x27;t reach your wallet fast enough.</text></item></parent_chain><comment><author>arcticbull</author><text>&amp;gt; nor the moral hazard created by the bailout&lt;p&gt;There was no moral hazard created because bank shareholder equity got zeroed out.&lt;p&gt;Bank management and shareholders were not protected against the &amp;#x27;find out&amp;#x27; phase.</text></comment>