Silicon Valley Bank Collapse

[Gospel]

You just made the rookie error of thinking that money is something you own, rather than a mere placeholder for the possibility that one day you might own something.

Nah bruh. I think you've got what I said mistaken because you aren't actually reading it.

 

[Jimmy Higgins]

I don't know. bilby is kind of affectionate about currency and money, almost like his relationship to nuclear power. You might want to pause and read their posts a couple more times.

 

[Gospel]

I don't know. bilby is kind of affectionate about currency and money, almost like his relationship to nuclear power. You might want to pause and read their posts a couple more times.

I have. bilby is correct when saying currency is fungible. Anything can be used as currency. What bibly seems to be misunderstanding is that the purpose of currency and what is being used as currency are two different subjects. I'm talking about the usage of currency and how it represents something of value (which is not the currency itself). What Silicon Valley bank did was trade a value that doesn't belong to them. It doesn't matter if that value is represented by strands of pubic hairs.

 

[ZiprHead]

Silicon Valley Bank chief pressed Congress to weaken risk regulations

CEO Greg Becker personally led the bank’s half-million-dollar push to reduce scrutiny of his institution – and lawmakers obliged

www.theguardian.com

 

[Jimmy Higgins]

I don't know. bilby is kind of affectionate about currency and money, almost like his relationship to nuclear power. You might want to pause and read their posts a couple more times.

I have. bilby is correct when saying currency is fungible. Anything can be used as currency. What bibly seems to be misunderstanding is that the purpose of currency and what is being used as currency are two different subjects. I'm talking about the usage of currency and how it represents something of value (which is not the currency itself). What Silicon Valley bank did was trade a value that doesn't belong to them. It doesn't matter if that value is represented by strands of pubic hairs.

What SVB did was have over $40 billion in withdrawals in a near instantaneous fashion. SVB fucked up. Most banks that go out of business have fucked up. But the question is how doomed were they without a massive capital plunge due to the bank run caused in large part by a couple people online?

 

[Gospel]

I'll try to explain. I trade 1 hour of my time to my job. My job gives me a note with 1$ on it that everyone in society agrees represents that value. I take that 1$ I spent time to earn and put it in the bank. The bank takes my 1$ and plays the lottery. They loose. I come back to get my 1$ note and they say, "Opps, its gone homie! That's just how the system works lil bruh bruh!". I essentially spent an hour (a time I still value) for nothing because I have nothing to show for it. Now if there was a law against the bank using my $1 without my permission that's an improvement. If the bank wants some of that 1$ they can charge me a portion of it say $0.25 for their services then gamble with that.

Edit: When I (or all customers) come back at once to withdraw; all the funds should be available because we agreed to the 0.25 charge and will only pull what is ours and not what the bank wants to fuck up.

 

[Swammerdami]

What am I missing that's so complicated?

Watch "It's a Wonderful Life".

Banks aren't armored mattresses in which to stuff your cash. (Those are called "safe deposit boxies"...) Banks take your deposit and lend it to your neighbor so he can buy his house. Banks make their money on interest income and suchlike, not on all those pesky nickel and dime fees they charge...

I agree with your sentiments, but in fact -- especially during very low-interest rate regime -- U.S. banks did make exorbitant earnings from fees and charges. Simple software is "optimized" to maximize service charges. Consider Wells Fargo, which urged officers to open new accounts without even customer knowledge, just for the fees.

 

[ZiprHead]

When brands go woke, do they go broke? | CIM Content hub

2019 supercharged brand involvement in issues of social responsibility. But as more of these stories come to light, the more polarising these issues can become.

www.cim.co.uk

Enhancing this narrative is the fact that businesses that have dabbled in this strategy have seen their share prices fall as a result. Only this month, Patrick Stewart’s outspoken comments about Brexit have encouraged a backlash against his new Amazon Prime show, Picard. Though Hollywood actors are often fairly outspoken in the modern age, in the studio era of Hollywood stars were carefully managed not to say anything political, for fear of it affecting their drawing power.

This is something Nike learnt when it aired commercials starring Colin Kaepernick in summer 2018. The commercial has not just been controversial, it has been acclaimed, winning an Emmy in 2019 – the first since 2002 for the giant clothing brand – and gaining the kind of plaudits from industry experts that money simply can’t buy. Nike shares fell nevertheless but it’s important to note that they always saw it as a way to engage with a younger audience; it seems to have done the trick. Prompted the genuine thought of if culturally awareness if simply a long-term strategy rather than a short-term press release.

Gillette are undoubtedly the most famous example this side of the shore, facing genuine backlash when they switched from ‘the best a man can get’ to ‘the best men can be’ and all that entailed. Piers Morgan was the highest profile of a number of, mainly male, critics saying they would never buy the brand again. P&G took an $8 billion non-cash write-down of Gillette last year.

There are clear business reasons for your brand to have a sense of purpose, simply because, ; with research group Futerra revealing surveys that suggested 88% of those polled are disappointed if their brands are not helping them be ethical And it’s not just customers. According to The Economist, 70% of business executives take social purpose as a significant reason behind choosing a job role. Even if the idea of being woke isn’t yet mass reach, doing something that makes the brand stand out for doing the right thing might well be, and staff undoubtedly like to be involved with something they see to be good.

Pepsi attracted numerous critics for their Kendall Jenner advert, for mixing up the social struggle with someone who, rightly or wrongly, represents a unique form of privilege. Simply put, it’s wokeness was manufactured and not earned. It’s why Nike is in a better position to leverage their controversy into a stronger long-term brand, whereas Gillette will struggle.

Whilst Nike have ridden the controversy to earn awards, and have reacted quickly when they have made errors, Gillette have had to firefight an advert that, though well-intentioned, bought a political element to a brand that had been largely apolitical to that time. Harry’s may have shifted the narrative of how shaving is advertised, but it was always too big of a risk for Gillette to essentially reverse their previous marketing message – well-intentioned as it might be.

Woke is, or has become, a loaded political term, as much a criticism of a lifestyle as it is a genuine set of values. Brands should make the distinction between being woke and having a purpose because, it is becoming increasingly clear that potential employees and customers alike value those that make positive choices.

Still, not all companies can be purpose-driven, and those that seek to instigate a purpose that is against the long-term history of the brand must take all the risks on board, analyse whether this is where their priority should lie and have a clear strategy for the roadblocks along the way. Gillette needs to look at how their market has changed, rather than fixing their advertising, whereas Nike seems to have the flexibility to make their strategy work.

Still, whilst it’s clear that more brands should, and will, pursue a sense of purpose in their strategy, it doesn’t mean they need to shout about it in their advertising. CIM members can read the words said by Piers French, director of client AO Business UK, in the latest edition of Catalyst on finding a sense of purpose in business: ‘Social value is what you do when no one is looking.' That is something all companies would do well to take notice of.

Also see Gravity Payments.

 

[Gospel]

I don't know. bilby is kind of affectionate about currency and money, almost like his relationship to nuclear power. You might want to pause and read their posts a couple more times.

I have. bilby is correct when saying currency is fungible. Anything can be used as currency. What bibly seems to be misunderstanding is that the purpose of currency and what is being used as currency are two different subjects. I'm talking about the usage of currency and how it represents something of value (which is not the currency itself). What Silicon Valley bank did was trade a value that doesn't belong to them. It doesn't matter if that value is represented by strands of pubic hairs.

What SVB did was have over $40 billion in withdrawals in a near instantaneous fashion. SVB fucked up. Most banks that go out of business have fucked up. But the question is how doomed were they without a massive capital plunge due to the bank run caused in large part by a couple people online?

They gambled. Full stop. They purchased bonds and the feds destroyed those bonds. They lost a bet after gambling with other peoples money. If the customers all agreed to what portion of their money can go to gambling then the customer wouldn't expect to withdraw what was lost. There would be no need for tax payers to replace the losses. The bank would just fail to be able to pay its operations costs, give everyone their deposits back (minus the agreed amount to gamble) and close their doors.

 

[Bomb#20]

I have. bilby is correct when saying currency is fungible. Anything can be used as currency. What bibly seems to be misunderstanding is that the purpose of currency and what is being used as currency are two different subjects. I'm talking about the usage of currency and how it represents something of value (which is not the currency itself). What Silicon Valley bank did was trade a value that doesn't belong to them. It doesn't matter if that value is represented by strands of pubic hairs.

One of my coworkers forgot his wallet, so he borrowed five bucks from me. When we went down to the cafeteria he traded it to them for a sandwich. Was that wrong? Should I have been mad at him for trading a value that didn't belong to him? SVB borrowed money from their depositors. That's what a bank deposit is. The whole point of borrowing money is so you can trade it for things.

 

[Gospel]

I have. bilby is correct when saying currency is fungible. Anything can be used as currency. What bibly seems to be misunderstanding is that the purpose of currency and what is being used as currency are two different subjects. I'm talking about the usage of currency and how it represents something of value (which is not the currency itself). What Silicon Valley bank did was trade a value that doesn't belong to them. It doesn't matter if that value is represented by strands of pubic hairs.

One of my coworkers forgot his wallet, so he borrowed five bucks from me. When we went down to the cafeteria he traded it to them for a sandwich. Was that wrong? Should I have been mad at him for trading a value that didn't belong to him? SVB borrowed money from their depositors. That's what a bank deposit is. The whole point of borrowing money is so you can trade it for things.

If your friend didn't ask for the money and just took it and spent it on a sandwich that would be wrong. Did Silicon Valley Bank ask its customers if it can borrow that money to gamble with it? From what I understand it's normal practice for banks to do just that. Not ask and just loan or gamble (via investments in stocks/bonds) said money. What I'm proposing is there be agreed upon amounts so that customers won't expect to withdraw funds that or held in other loans/bonds. Capeesh?

 

[Bomb#20]

They gambled. Full stop. They purchased bonds and the feds destroyed those bonds. They lost a bet after gambling with other peoples money. If the customers all agreed to what portion of their money can go to gambling then the customer wouldn't expect to withdraw what was lost. There would be no need for tax payers to replace the losses. The bank would just fail to be able to pay its operations costs, give everyone their deposits back (minus the agreed amount to gamble) and close their doors.

Yes. And that's almost exactly what happened. The customers did all agree to what portion of their money can go to gambling: the amount that wasn't insured, the amount over $250,000. But the customers for some reason expected to withdraw what they'd agreed to gamble and was lost. Why did they expect this? Because they've learned from experience to expect bailouts.

 

[Gospel]

They gambled. Full stop. They purchased bonds and the feds destroyed those bonds. They lost a bet after gambling with other peoples money. If the customers all agreed to what portion of their money can go to gambling then the customer wouldn't expect to withdraw what was lost. There would be no need for tax payers to replace the losses. The bank would just fail to be able to pay its operations costs, give everyone their deposits back (minus the agreed amount to gamble) and close their doors.

Yes. And that's almost exactly what happened. The customers did all agree to what portion of their money can go to gambling: the amount that wasn't insured, the amount over $250,000. But the customers for some reason expected to withdraw what they'd agreed to gamble and was lost. Why did they expect this? Because they've learned from experience to expect bailouts.

Oh. well then nothing to see here.

 

[bilby]

I don't know. bilby is kind of affectionate about currency and money, almost like his relationship to nuclear power. You might want to pause and read their posts a couple more times.

I have. bilby is correct when saying currency is fungible. Anything can be used as currency. What bibly seems to be misunderstanding is that the purpose of currency and what is being used as currency are two different subjects. I'm talking about the usage of currency and how it represents something of value (which is not the currency itself). What Silicon Valley bank did was trade a value that doesn't belong to them. It doesn't matter if that value is represented by strands of pubic hairs.

Money hasn't represented anything of value (other than itself) for almost a century.

 

[TomC]

They gambled. Full stop.

Exactly.
It's what banks do.
It's expected. It's how they make money.
This isn't news.

They used to be much more heavily regulated for exactly this reason.
Tom

 

[Gospel]

I don't know. bilby is kind of affectionate about currency and money, almost like his relationship to nuclear power. You might want to pause and read their posts a couple more times.

I have. bilby is correct when saying currency is fungible. Anything can be used as currency. What bibly seems to be misunderstanding is that the purpose of currency and what is being used as currency are two different subjects. I'm talking about the usage of currency and how it represents something of value (which is not the currency itself). What Silicon Valley bank did was trade a value that doesn't belong to them. It doesn't matter if that value is represented by strands of pubic hairs.

Money hasn't represented anything of value (other than itself) for almost a century.

That's interesting, I suppose we've all been bartering all along huh.

 

[bilby]

I'll try to explain. I trade 1 hour of my time to my job. My job gives me a note with 1$ on it that everyone in society agrees represents that value. I take that 1$ I spent time to earn and put it in the bank. The bank takes my 1$ and plays the lottery. They loose. I come back to get my 1$ note and they say, "Opps, its gone homie! That's just how the system works lil bruh bruh!". I essentially spent an hour (a time I still value) for nothing because I have nothing to show for it. Now if there was a law against the bank using my $1 without my permission that's an improvement. If the bank wants some of that 1$ they can charge me a portion of it say $0.25 for their services then gamble with that.

Edit: When I (or all customers) come back at once to withdraw; all the funds should be available because we agreed to the 0.25 charge and will only pull what is ours and not what the bank wants to fuck up.

Giving money to the bank to hold as a deposit IS giving them permission to invest it. If you are prepared to accept only the value of their keeping it safe for you in exchange, that's between you and them; You could instead arrange to be paid more beyond that value, by depositing it in an interest bearing account; Or even to pay a fee for its safe storage without them being able to invest it, by renting a safe deposit box.

If the bank opens up your safe deposit box, takes your money, invests it, and loses, then you've got a case. But a deposit account IS permission for the bank to use your money until you ask for it back.

 

[Bomb#20]

If your friend didn't ask for the money and just took it and spent it on a sandwich that would be wrong. Did Silicon Valley Bank ask its customers if it can borrow that money to gamble with it? From what I understand it's normal practice for banks to do just that. Not ask and just loan or gamble (via investments in stocks/bonds) said money.

What did the customers think SVB was going to do with the money, buy sandwiches? The customers wanted SVB to gamble their money, so SVB would win their bets, and have more money then they'd lent it, and be able to pay them interest. If you want somebody to just keep your money safe for you then you don't lend it to him; you ask him to lend you space in his safe, and you pay him, instead of expecting him to pay you.

What I'm proposing is there be agreed upon amounts so that customers won't expect to withdraw funds that or held in other loans/bonds. Capeesh?

Yes, we're agreed on that. The problem isn't that SVB gambled; it's that SVB took riskier bets than it should have. And the government's decision to pay SVB's enablers more than the $250,000 they were promised incentivizes those enablers to go on to enable other banks to take riskier bets than they should.

 

[Cheerful Charlie]

They gambled. Full stop.

Exactly.
It's what banks do.
It's expected. It's how they make money.
This isn't news.

They used to be much more heavily regulated for exactly this reason.
Tom

What SVB did was make a bad move based on a bad guess about future interest rate. Further more, they did not have enough money reserves on hand to weather their storm. Frank - Dodd mandated holding adequate reserves. Over the years lobbying got the Frank - Dodd laws nibbled away and Trump eliminated it all. A perfect storm.

Short sellers caught on and made great sums of easy money, so it is not like this was not obvious to those paying attention. Elizabeth Warren loudly warned us of this years ago when Trump acted foolishly.

 

[bilby]

I'm talking about the usage of currency and how it represents something of value (which is not the currency itself).

Well I am saying that it doesn't represent anything of value, other than itself.

Which should be a dispute that's an absolute slam-dunk for you to win - all you have to do is tell me what the valuable thing it represents is.

You would have been right in 1900, when the dollar was defined as being worth exact amounts of gold or silver, for which you could demand the government exchange paper bills.

But a dollar isn't worth a fixed amount of gold, or of silver, or of Double Whoppers with Cheese, anymore. And if I am mistaken, it should be simple enough for you to demonstrate my error.

What is a dollar worth, apart from $1?