Summary The big collapse and what to do about it www.riskhedge.com
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The article discusses the current state of the banking sector and Silicon Valley, highlighting the failure of Silicon Valley Bank due to poor management and its unique customer base, and encourages readers to think independently and not be swayed by media headlines.
Key Points
- The FDIC now guarantees unlimited deposits, which should prevent depositor flight.
- Silicon Valley Bank has collapsed due to poor management and a customer base of deeply cash flow negative venture capital/startup companies.
- The collapse of Silicon Valley Bank is the second-largest bank failure in US history and marks the end of Silicon Valley as we know it.
Summary
229 word summary
The excerpt is a collection of information from the website Riskhedge, including the Terms of Use, Privacy Policy, and Contact information. It also includes articles from the Chief Analysts, such as Justin Spittler discussing gold, Stephen McBride discussing the banking sector, and Chris Wood discussing job loss. The article emphasizes that although there are concerns about the banking sector and Silicon Valley, global stock markets and speculative assets like Bitcoin and Ethereum are holding up well. The author believes that more regional banks may fail, but changing rules on the fly sets a dangerous precedent. The article encourages readers to think independently and not be swayed by media headlines. The Federal Deposit Insurance Corporation (FDIC) has guaranteed all deposits, which should help stop depositor flight. The FDIC protection is now unlimited. Previously, protection was limited to $250,000 per account. Silicon Valley Bank (SIVB) has gone under due to poor management and its unique customer base. Its customers were concentrated in venture capital/startup companies, which tend to be deeply cash flow negative. SIVB's customers withdrew more and more money from the bank, forcing it to sell billions of dollars worth of bonds, mostly US Treasurys, at huge losses. The bank's collapse marks the second-biggest bank failure in US history, second only to Washington Mutual in 2008. The collapse of SIVB is the end of Silicon Valley as we know it.