Game Over: FDIC Shutters Silicon Valley Bank, Appoints Receiver

Update (1135ET): Game over for Silicon Valley bank.


As we noted before, while the FDIC noted that SVIB had $175BN in deposits as of Dec 31, note that some $151.5BN of these are uninsured, which means they get exactly zero although a sizable number of them likely pulled their deposits in the past few days.

And just like that SVB is no more: a historic collapse which in many ways was faster than Lehman, and which has seen SIVB stock plunge from $763 to 0 in 16 months.

Full FDIC statement below:

Silicon Valley Bank, Santa Clara, California, was closed today by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect insured depositors, the FDIC created the Deposit Insurance National Bank of Santa Clara (DINB). At the time of closing, the FDIC as receiver immediately transferred to the DINB all insured deposits of Silicon Valley Bank.

All insured depositors will have full access to their insured deposits no later than Monday morning, March 13, 2023. The FDIC will pay uninsured depositors an advance dividend within the next week. Uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds. As the FDIC sells the assets of Silicon Valley Bank, future dividend payments may be made to uninsured depositors.

Silicon Valley Bank had 17 branches in California and Massachusetts. The main office and all branches of Silicon Valley Bank will reopen on Monday, March 13, 2023. The DINB will maintain Silicon Valley Bank’s normal business hours. Banking activities will resume no later than Monday, March 13, including on-line banking and other services. Silicon Valley Bank’s official checks will continue to clear. Under the Federal Deposit Insurance Act, the FDIC may create a DINB to ensure that customers have continued access to their insured funds.

As of December 31, 2022, Silicon Valley Bank had approximately $209.0 billion in total assets and about $175.4 billion in total deposits. At the time of closing, the amount of deposits in excess of the insurance limits was undetermined. The amount of uninsured deposits will be determined once the FDIC obtains additional information from the bank and customers.

Customers with accounts in excess of $250,000 should contact the FDIC toll-free at 1-866-799-0959.

The FDIC as receiver will retain all the assets from Silicon Valley Bank for later disposition. Loan customers should continue to make their payments as usual.

Silicon Valley Bank is the first FDIC-insured institution to fail this year. The last FDIC-insured institution to close was Almena State Bank, Almena, Kansas, on October 23, 2020.

Update (1030ET): In a hearing before the US House Ways & Means Committee Friday, Treasury Secretary Janet Yellen said the department is monitoring “a few” banks amid issues at SVB.


Daily chart of SVB Financial group.

LIVE! Watch For Bank Failure Contagion As Systemic Meltdown Worsens. Mannarino

LIVE! Watch For Bank Failure Contagion As Systemic Meltdown Worsens Mannarino


California wine industry faces financial crisis - with majority of vineyards locked out of their accounts amid SVB collapse

  • California wine industry faces crisis following the closure of Silicon Valley Bank the primary financial institution for wineries in the region for nearly 30 years
  • A new bank, the National Bank of Santa Clara, has been created but it will only insure accounts up to $250,000
  • Impacts on wineries are significant, including the inability to make payroll, pay bills, process credit card payments, and continue with development projects

Green, Sustainable Economics a Phase of Divine Law

In this modern world the Bible occupies a less important place in the thoughts of men than in the days of our ancestors. Some ascribe this to the outmoding of superstition by the so-called superior knowledge and wisdom of an enlightened scientific age (Enoch 68:16 & 1 Timothy 6:20). Others, while receiving the spiritual message of the Bible, fail to see in it the solution of our economic and social problems.

Yet both Old and New Testaments contain a revelation of God’s Will, eternal principles which are the only true guide for mankind from age to age. In spite of the drift away from the Bible, the need is greater than ever before to learn Divine Wisdom and obey the Divine Will. Green, Sustainable Economics

Shares in other banks with tech exposure plunge after SVB's failure

The abrupt failure of Silicon Valley Bank, which spent years carving a wide niche in the technology industry, sparked a selloff among other banks that also have exposure to the same once-fast-growing sector.

Shares of Western Alliance Bancorp, PacWest Bancorp, Signature Bank and First Republic Bank closed the day down between 16% and 38%. Trading in the four banks' stocks was halted Friday when shares in each of the companies fell to their lowest levels since 2020.

Accidental Banking System Failure? Don’t You Believe It.

By Gregory Mannarino

The overnight collapse of SVB, (Silicon Valley Bank), has certainly got everyone’s attention, but is this really any surprise at all?

Absolutely not.

The collapse of SVB is just a symptom of the current worldwide economic freefall being deliberately fostered by central banks.

If you are at all familiar with any of my work or have paid attention to the many articles I have written for the Trends Journal, then you are already keenly aware that right now today the entire financial system is breaking down… and this is NOT any accident. (We are in the early stages of a deliberate systemic failure).

Today the world economy is in an accelerating freefall, teetering on a knifes edge, being deliberately pushed off the financial cliff by central banks who are collectively attempting to crush the existing system only to issue in a new one.

Roughly 8 months ago, I began to warn those who follow my work on YouTube, (check out my older videos), that the banks are in trouble. It just became too obvious, and the current situation with the banks comes down to just THREE things: no deposits, no loans, and no deals.

In truth, it’s NOT the banks who are in trouble, but as always-We the People. Just some of the fallout from the SVB collapse is this; depositors with more than the government $250K FDIC insurance will never be made whole, and nor will the shareholders, who were just up until a few days ago being told that everything with the bank was sound. Not to mention the throngs of people who just became unemployed. The greatest threat? The collapse of smaller/regional banks will allow the MEGA banks to consolidate power.

And where were the banking regulators in all this?

How did they not see this coming?

Or is it possible that the regulators did see this coming, and they just turned a blind eye. Remember this, in the current environment NOTHING is what it seems to be.

Why would banking regulators just “allow” an overnight collapse of SVB, the 16th largest bank by assets in the US? And are we likely so see more regional/smaller banks fail?

Are we to believe that banking regulators are just incompetent? Moreover, as a reality check, understand… there is absolutely no way that the Federal Reserve nor the US Treasury could not have seen this coming. Remember, NO DEPOSITS, NO LOANS, NO DEALS! If this “no deposits, no loans, and no deals” situation is just plainly obvious to you and I, are we to believe that banking regulators, the US Treasury, and the Federal Reserve just entirely missed this? How about NO.

Let’s ask another question… why didn’t a single larger bank step in and bailout SVB? Well, the mainstream media financial channel commentators appear to be completely baffled as to why no big bank offered to step in and “save” SVB. Well… here is why.

The collapse of SBV, and there will be others, creates a “fire sale” opportunity for the major banks. Not a single major bank stepped in to save SVB because now this collapse presents them with a MAJOR opportunity to now be able to acquire assets from this collapse for next to nothing, pennies on the dollar. Moreover, the big banks by design will now become even larger as more regional bank collapses occur, allowing for more fire sales.

I fully expect that the overnight collapse of SVB will be followed by more, smaller/regional bank failures, AND THAT MEANS MORE FIRE SALES of assets and opportunities for the major banks.

In my opinion, we are about to see a consolidation of the entire banking system accelerate, with more power, and more assets concentrated in the Wall Street Super Banks. ANY “contagion” regarding regional/smaller bank failures will of course allow for the Too Big To Fail institutions to get MUCH bigger.

Do you really believe that any of this is by accident? And no one saw this coming?


Alert! MARKETS A LOOK AHEAD Systemic BREAKDOWN And A Consolidation Of POWER...

Fox News host Tucker Carlson breaks down the collapse of Silicon Valley Bank and explains the larger ramifications for the U.S. on 'Tucker Carlson Tonight.'

Just Came Home From the Supermarket - People Oblivious to Banking Crisis

I just arrived home from the supermarket where I went to top-off some preps and get some extra meat due to the banking troubles . . .

People in the store were completely, totally, oblivious to what is taking place in the Banking system. Not a care in the world.

The people on line behind me at the checkout noticed I had considerable amount of meat and they said "Got a lot of meat there." I replied "Well, with the banks having troubles, I decided I would get some extra in case they all go under." That raised eyebrows.

The guy's wife said "Oh, you mean those California Banks; they're not here, won't affect us."

I replied, "Silicon Valley Bank has a branch on Park Avenue in New York City for all the rich people. Yesterday, the bank had to call the New York City Police to forcibly remove those people because they wanted their money and the bank couldn't give it to them. Plus, all the companies that had PAYROLL in Silicon Valley Bank, that money is gone. All the employee paychecks are no good. This is gonna spread so fast it will make our heads spin."

The wife gave a worried look to the husband. I told them "The FDIC is at twelve other banks already, and it looks bad for them too. In fact, First Republic Bank looks like the next Domino to fall, probably tomorrow. God only knows how many more after that."

The husband said "We haven't seen anything about other banks on TV." I replied "You won't until it's too late."

Then I told them "Look, go to an ATM and get some cash out today. This way, if things go bad, you at least have money for food for a week or two til things settle down. If you don't use it, you can put the money back in the bank, but it's better to have it and not need it, than to need it and not have it."

The husband nodded his head as if to say that's a good idea.

Frankly, I cannot fathom that the ENTIRE system might collapse. It just makes no sense. There is no reason at all to smash the entire country to smithereens, and that's exactly what would happen if the Banking system goes under.

I want to believe that cool heads will prevail and the system has enough back-stops built into it, to get through this. But I can't help but feel that there is a much bigger, and very sinister plan, to force "the Great Reset" upon us all. And what better way to do that, than to smash the entire Banking System right now?

If this turns out to be some evil plan, there's going to have to be reprisals against the people doing it. Brutal reprisals. Hal Turner Radio Show - Just Came Home From the Supermarket - People Oblivious to Banking Crisis

SVB Financial Group faced a perfect storm, but there are plenty of other banks that would face big losses if they were forced to dump securities to raise cash

Bank depositors can be quick to bail if there is any hint of a liquidity problem.

Silicon Valley Bank has failed following a run on deposits, after its parent company’s share price crashed a record 60% on Thursday.

Trading of SVB Financial Group’s SIVB, -60.41% stock was halted early Friday, after the shares plunged again in premarket trading. Treasury Secretary Janet Yellen said SVB was one of a few banks she was “monitoring very carefully.” Reaction poured in from several analysts who discussed the bank’s liquidity risk.

California regulators closed Silicon Valley Bank and handed the wreckage over to the Federal Deposit Insurance Administration later on Friday.

Below is the same list of 10 banks we highlighted on Thursday that showed similar red flags to those shown by SVB Financial through the fourth quarter. This time, we will show how much they reported in unrealized losses on securities — an item that played an important role in SVB’s crisis.

Below that is a screen of U.S. banks with at least $10 billion in total assets, showing those that appeared to have the greatest exposure to unrealized securities losses, as a percentage of total capital, as of Dec. 31.

First, a quick look at SVB

Some media reports have referred to SVB of Santa Clara, Calif., as a small bank, but it had $212 billion in total assets as of Dec. 31, making it the 17th largest bank in the Russell 3000 Index RUA, -1.70% as of Dec. 31. That makes it the largest U.S. bank failure since Washington Mutual in 2008.

One unique aspect of SVB was its decades-long focus on the venture capital industry. The bank’s loan growth had been slowing as interest rates rose. Meanwhile, when announcing its $21 billion dollars in securities sales on Thursday, SVB said it had taken the action not only to lower its interest-rate risk, but because “client cash burn has remained elevated and increased further in February, resulting in lower deposits than forecasted.”

SVB estimated it would book a $1.8 billion loss on the securities sale and said it would raise $2.25 billion in capital through two offerings of new shares and a convertible bond offering. That offering wasn’t completed.

So this appears to be an example of what can go wrong with a bank focused on a particular industry. The combination of a balance sheet heavy with securities and relatively light on loans, in a rising-rate environment in which bond prices have declined and in which depositors specific to that industry are themselves suffering from a decline in cash, led to a liquidity problem.

Unrealized losses on securities

Banks leverage their capital by gathering deposits or borrowing money either to lend the money out or purchase securities. They earn the spread between their average yield on loans and investments and their average cost for funds.

The securities investments are held in two buckets:

  • Available for sale — these securities (mostly bonds) can be sold at any time, and under accounting rules are required to be marked to market each quarter. This means gains or losses are recorded for the AFS portfolio continually. The accumulated gains are added to, or losses subtracted from, total equity capital.
  • Held to maturity — these are bonds a bank intends to hold until they are repaid at face value. They are carried at cost and not marked to market each quarter.

In its regulatory Consolidated Financial Statements for Holding Companies—FR Y-9C, filed with the Federal Reserve, SVB Financial, reported a negative $1.911 billion in accumulated other comprehensive income as of Dec. 31. That is line 26.b on Schedule HC of the report, for those keeping score at home. You can look up regulatory reports for any U.S. bank holding company, savings and loan holding company or subsidiary institution at the Federal Financial Institution Examination Council’s National Information Center. Be sure to get the name of the company or institution right — or you may be looking at the wrong entity.

Here’s how accumulated other comprehensive income (AOCI) is defined in the report: “Includes, but is not limited to, net unrealized holding gains (losses) on available-for-sale securities, accumulated net gains (losses) on cash flow hedges, cumulative foreign currency translation adjustments, and accumulated defined benefit pension and other postretirement plan adjustments.”

In other words, it was mostly unrealized losses on SVB’s available-for-sale securities. The bank booked an estimated $1.8 billion loss when selling “substantially all” of these securities on March 8.

The list of 10 banks with unfavorable interest margin trends

On the regulatory call reports, AOCI is added to regulatory capital. Since SVB’s AOCI was negative (because of its unrealized losses on AFS securities) as of Dec. 31, it lowered the company’s total equity capital. So a fair way to gauge the negative AOCI to the bank’s total equity capital would be to divide the negative AOCI by total equity capital less AOCI — effectively adding the unrealized losses back to total equity capital for the calculation.

Getting back to our list of 10 banks that raised similar red margin flags to those of SVB, here’s the same group, in the same order, showing negative AOCI as a percentage of total equity capital as of Dec. 31. We have added SVB to the bottom of the list. The data was provided by FactSet:

Bank Ticker City AOCI ($mil) Total equity capital ($mil) AOCI/ TEC – AOCI Total assets ($mil)
Customers Bancorp Inc. CUBI, -13.11% West Reading, Pa. -$163 $1,403 -10.4% $20,896
First Republic Bank FRC, -14.84% San Francisco -$331 $17,446 -1.9% $213,358
Sandy Spring Bancorp Inc. SASR, -2.91% Olney, Md. -$132 $1,484 -8.2% $13,833
New York Community Bancorp Inc. NYCB, -5.99% Hicksville, N.Y. -$620 $8,824 -6.6% $90,616
First Foundation Inc. FFWM, -9.11% Dallas -$12 $1,134 -1.0% $13,014
Ally Financial Inc. ALLY, -5.70% Detroit -$4,059 $12,859 -24.0% $191,826
Dime Community Bancshares Inc. DCOM, -2.81% Hauppauge, N.Y. -$94 $1,170 -7.5% $13,228
Pacific Premier Bancorp Inc. PPBI, -1.95% Irvine, Calif. -$265 $2,798 -8.7% $21,729
Prosperity Bancshare Inc. PB, -4.46% Houston -$3 $6,699 -0.1% $37,751
Columbia Financial, Inc. CLBK, -1.78% Fair Lawn, N.J. -$179 $1,054 -14.5% $10,408
SVB Financial Group SIVB, -60.41% Santa Clara, Calif. -$1,911 $16,295 -10.5% $211,793
Source: FactSet

Click on the tickers for more about each bank.


The Bank Crisis - The big Picture . . . Inevitable Collapse . . . less than 1 year?

As the present, ongoing, Bank crisis emerged, many have struggled to see the "big picture" to plan for the future. Well, this is the big picture:

We are in a credit/debt crisis loop.

Banks are undercapitalized. They need more cash as capital, but to get the cash, they need to borrow it. More borrowing causes higher interest rates, which means more debt, for which they will again have to borrow . . . and on and on and on it would go. Until it collapses.

When the government passed out all that free money during the COVID pandemic, that money flowed into bank accounts. With BASEL 3 banking requirements, banks had to have a percentage of Tier 1 assets that could be liquidated pretty darn quick in case the bank needed to raise money fast.

"Tier 1 assets" means government treasuries . . . and at that time, when banks HAD to buy government treasuries to have Tier 1 assets, the yield on those Treasury bonds was pretty much 0.

Now, with the federal reserve raising rates at such a furious pace, all those bonds the Banks bought . . . have lost value. Why would I want to buy your bond yielding almost nothing, when the current 2-year Treasury Bond is yielding 4.10%? A week ago it was 5%.

So the banks can't sell it at face value. They would have to sell the bond at a loss in order to make it sell at all.

Silicon Valley Bank (SVB) did this to raise capital due to the outflows of cash, and took an almost 2 billion dollar loss. This is called "unrealized losses."

As you read this story, the total of unrealized losses in the banking system is 620 billion dollars.

Now, the federal reserve is saying if a Bank needs capital, the Bank can borrow against their Treasury bonds and Mortgage Backed Securities, at "par" (face value) because if they did it mark-to-market, the sale would be a loss and not help at all.

The reason for all the red in the banking sector today is because investors aren't sure who holds a lot of the older bonds and is under-capitalized in case distresses comes along.

Pausing the interest rate hike won't do anything to solve this problem; the only solution is to lower the rates back down until the older bonds could be sold on the open market for pretty much face value.

BUT . . . That would cause rapidly rising inflation as well as a faster flight to de-dollarization by foreign countries, and then we are on the road to hyper-inflation.

Conversely, if they continue to raise the Interest rate . . . well . . . . .the financial collapse would make the great depression look like the roaring 20's. . . . and that would probably be a best case.

So the Banks (and government) are literally trapped by a problem of their own making. They face a choice: Save the Banks OR, save the dollar. They can't do both.

This week, they made their choice: Save the banks.

So from this moment, the Shit is flying through the air and is about to meet the fan.

Some Bankers Are Already Sounding the Alarm

Morgan Stanley, MS, says sell any bounce on this government intervention, next leg of bear market has begun.

On March 2, Morgan Stanley's Mike Wilson gave his thoughts on the current state of the stock market, saying it is now in a "death zone" with predictions of its potentially massive drop. Wilson estimates that the S&P 500 could drop down to 3,000 points within the month, which is a 26% slump.

Wilson said that US stocks have reached "unsustainable heights" and that investors were like climbers who were pushing towards the top without being able to consider the risks properly. The move by investors was likened to "blindly" pushing toward the top of Mount Everest.

Wilson: "Many fatalities in high-altitude mountaineering have been caused by the death zone, either directly through loss of vital functions, or indirectly by wrong decisions made under stress or physical weakening that lead to accidents,"

Morgan Stanley's chief US equity strategist said that the current valuations have much in common with the "death zone," which is Mount Everest's top where oxygen is extremely low. Basically, it meant that it was in the dangerous territory since the "death zone" is where many climbers lost their life.

Wilson: "This is a perfect analogy for where equity investors find themselves today, and quite frankly, where they've been many times over the past decade,"

Year-to-date, the S&P 500 was around 6%, and Nasdaq Composite was up by 13%.

It was also recently reported that the Federal Reserve was unlikely to be able to bring down inflation without increasing interest rates even more, which would cause a recession. This came from Former Fed Governor Frederic Mishkin's research paper.

So the Stock Market does not appear to be the place to be if one is trying to protect wealth - or even earn a profit down the road.


The Treasury market is signaling that a recession is all but inevitable if history is any guide. As concerns about the financial health of the US banking sector mount, benchmark yields on every maturity of Treasury — from three-month T-bills to 30-year bonds — have fallen below 4.75%, the upper end of the Federal Reserve’s range for its key benchmark rate.

They have fallen because people view Treasuries as a safe haven and are now flooding the Treasury Bond market with money. Since everyone wants "safety" the Treasury can afford to drop the rate of interest it is willing to pay, because buyers of Treasuries are looking for safety, not necessarily rate of return.

According to Yahoo News, Since 1977, such a move has foreshadowed every economic downturn, according to data compiled by Bloomberg. Its predictive powers were off only once in 1998, when the Fed slashed rates after the collapse of hedge fund Long Term Capital Management but a recession never materialized.

The steep drop in Treasury yields reflects speculation that the failure of Silicon Valley Bank and two other lenders may hasten the end of the Fed’s rate hikes amid concern about spreading contagion. Two-year yields fell 54 basis points Monday, the biggest drop since Black Friday in 1987, when the S&P 500 tumbled 21%.

Big Shots Saying "The End"

Did you catch his time frame? He wrote ". . . this year."

And actual Money People are saying worse:

To put this week's events into perspective, take a look at this chart showing the size of ALL Bank Failures since the year 2000:

The 2008 failure of Washington Mutual Bank is what triggered the 2008 Great Financial Crisis, when the $307 Billion dollar bank, failed.

This week, the two banks that failed, Silicon Valley and Signature Banks, are together, BIGGER than Washington Mutual. So that puts into perspective how destructive their failures will prove to be in the days and weeks to come.

This is, without doubt, a financial and economic catastrophe.

The unraveling can happen in an instant.

A week ago, everything was still fine. Then, within a matter of days, SVB’s stock price plunged, depositors pulled their money, and the bank failed. Poof.

The same thing happened with Lehman Brothers in 2008. In fact over the past few years we’ve been subjected to example after example of our entire world changing in an instant.

We all remember that March 2020 was still fairly normal, at least in North America. Within a matter of days people were locked in their homes and life as we knew it had fundamentally changed.

This is going to keep happening.

This is a financial catastrophe, but it’s just getting started. Like Lehman Brothers in 2008, SVB is just the tip of the iceberg. There will be other casualties – not just in banks, but money market funds, insurance companies, and even businesses.

Foreign banks and institutions are also suffering losses on their US government bonds… and that has negative implications on the US dollar’s reserve status.

Think about it: it’s bad enough that the US national debt is outrageously high, that the federal government appears to be a bunch of fools incapable of solving any problem, and that inflation is terrible.

But no one in charge seems to understand any of this.

The guy who shakes hands with thin air insisted this morning that the banking system is safe. Nothing to see here, people.

The Federal Reserve– which is the ringleader of this sad circus– doesn’t seem to understand anything either.

In fact Fed leadership spent all of last week insisting that they were going to keep raising interest rates.

Even after last week’s banking crisis, the Fed probably still hasn’t figured it out. They appear totally out of touch with what’s really happening in the economy. And when they meet again next week, it’s possible they’ll raise rates even higher (and trigger even more unrealized losses).

So this drama is far from over.


There's an ill-wind blowing and we, (you and me) are on the wrong side of it. What to do?

Many people are saying buy Gold and Silver.

I get why they are saying that. Gold and Silver Bullion are protection for wealth. They store wealth right there inside themselves. Gold and Silver will ALWAYS have a value no matter what means of commerce is in effect. If the US Dollar becomes worthless or is de-monetized as "legal tender" whatever replaces it, will have a price in Gold in Silver. So the holding of Gold and Silver would, necessarily, STORE wealth. I emphasized the word "holding" because if you don't physically HOLD the gold, then you don't own it.

Buying Gold or Silver "on paper" and letting someone ELSE store it for you, makes it "not yours." So if you're going to buy precious metals, you better have them delivered into your hands, because what's not in your hand, is not yours.

Here's the problem with Gold and Silver . . . . government can make owning those metals, "illegal." They did it once with Gold way back under President Roosevelt. They might try doing that again.

So what else can one do to preserve wealth?

Well, I am NOT a licensed financial planner or expert, and so I cannot give financial advice. You should speak with a Licensed financial expert before making any financial decisions.

Having said that, as a layman, and not an expert in any way, I have made the personal decision to put my "dollars" into something which is not "dollars."

Maybe you should too.

Whether it is Real Estate, or precious Gems, or . . . . anything tangible that holds its wealth within itself, is better than holding "dollars."

Sooner or later, those "Dollars" are, in fact, going to become worthless. That is assured now that the government and bankers have done what they've done in this latest banking crisis.

Look to the collapse of the Soviet Union and Venezuela as good indicators of what happened. But remember there will be large difference since this collapse will be larger than any in history.

It's only a matter of time now. And the clock is ticking.

Report: Nearly Half of ‘Climate Change’ Companies in U.S. Banked with Failed SVB

Santa Clara Police officers exit Silicon Valley Bank in Santa Clara, Calif., Friday, March 10, 2023. The Federal Deposit Insurance Corporation is seizing the assets of Silicon Valley Bank, marking the largest bank failure since Washington Mutual during the height of the 2008 financial crisis. The FDIC ordered the closure …

AP Photo/Jeff Chiu

Joel B. Pollak

19 Mar 2023

Half of the companies in the U.S. devoted to climate change and biotech banked with the now-failed Silicon Valley Bank (SVB), leaving many of those companies looking for financial backers willing to take on the risk.

As San Francisco Bay Area public radio station KQED reports, many of those companies received funding from SVB because other banks were less willing to fund investments that had lower chances of providing a return:

Nearly half of the country’s bio- and climate-technology companies, many of them headquartered in the Bay Area, banked with Silicon Valley Bank. Last year, SVB committed to investing at least $5 billion in the clean tech industry.

But even as the FDIC quickly stepped in to guarantee deposits, following the bank’s collapse, many companies have been scrambling to find new banks, open accounts and reorganize payroll systems.

To his point, SVB was widely known for incubating ambitious climate and biotech startups, and was a valuable resource for new companies looking for a bank willing to invest in innovative and somewhat risky ventures.

Kimberley Strassel, a columnist for the Wall Street Journal, quoted one source who called such investments “subprime business loans”:

Most of these companies weren’t filling some vital market need. Rather, as the Journal reported, SVB was beloved for its willingness to offer “banking services to startups that often weren’t profitable, in some cases didn’t have a product, and would otherwise have a hard time getting a line of credit or a loan from a larger bank.” One tech entrepreneur provided a more scathing description of SVB’s products: “They’re basically subprime business loans. You’re talking about companies that have no credit profile, they’re burning cash and are unlikely to raise the same type of capital because of interest rates. . . . It was basically social credit.”

What inspires a bank to disregard risk and shower money on products or services that nobody is clamoring to buy? One answer is easy money and misguided regulation, which washed dollars into the economy even as it pushed banks like SVB to load up on sovereign debt, lulled by a Federal Reserve-fed belief that interest rates would stay near zero forever. The other? Washington handouts, via President Biden’s effort to engineer a climate industry that otherwise wouldn’t exist.

She argues that the same Democrat-led government that funded failed enterprises like Solyndra in the 2009 “stimulus” — managed by then Vice President Joe Biden — is making the same mistake again.

As Breitbart News noted in 2020, Biden took personal credit in 2009 for an investment by Fisker Automotive in Delaware, backed by the stimulus, to produce electric cars. The venture failed without one car being produced.

Joel B. Pollak is Senior Editor-at-Large at Breitbart News and the host of Breitbart News Sunday on Sirius XM Patriot on Sunday evenings from 7 p.m. to 10 p.m. ET (4 p.m. to 7 p.m. PT). He is the author of the new biography, Rhoda: ‘Comrade Kadalie, You Are Out of Order’. He is also the author of the recent e-book, Neither Free nor Fair: The 2020 U.S. Presidential Election. He is a winner of the 2018 Robert Novak Journalism Alumni Fellowship. Follow him on Twitter at @joelpollak.
[Report: Nearly Half of ‘Climate Change’ Companies in U.S. Banked with Failed SVB]

(Report: Nearly Half of 'Climate Change' Companies in U.S. Banked with Failed SVB)

MARKETS A LOOK AHEAD: The Fed/Central Banks MUST NOW Hyper-inflate... Here's Why. Mannarino

MARKETS A LOOK AHEAD: The Fed/Central Banks MUST NOW Hyper-inflate... Here's...


More Troubled Banks

by Paul Craig Roberts | May 5, 2023 | 0 comments

Paul Craig Roberts – May 4, 2023

As I reported at the time, the banking crisis is not limited to Silicon Valley Bank. Silicon Valley Bank’s failure was followed by the failures of New York Signature Bank and First Republic Bank of San Francisco. Now three more banks have had their stock prices collapse–Western Alliance, PacWest Bankcorp, and Metropolitan Bank.

As I have emphasized, the Federal Reserve’s higher interest rates are the cause of the bank troubles. The decade of zero interest rates left banks with portfolios of low interest rate assets on their balance sheets. As the Federal Reserve raised rates, these assets declined in value. Depositors saw that the banks were technically insolvent and withdrew funds. Others withdrew funds because they can now get higher interest rates from money market funds.

Banks losing deposits are subject to runs. Expecting the worse, shareholders sell their holdings of the banks’ stocks. As the banks lose market value, troubles increase.

The Federal Reserve is causing a banking crisis, because the Federal Reserve imagines that the inflation is a monetary inflation and not an inflation resulting from supply disruptions caused by Covid lockdowns and Russian sanctions. If the Federal Reserve succeeds in throttling the economy with higher interest rates, supply problems are aggravated by reductions in production. In other words, as usual, the Federal Reserve’s policy is counterproductive.

I have always been amazed that Americans look to government entities for solutions when incompetence is the main attribute of government.