I typically listen to financial videos on YT while driving or walking in a park. Not with Patrick's videos though. For Patrick's videos I wait for the kids to go to sleep, get my favorite snack and cherish every minute of this subtle, intelligent humor. Kudos!
These bankers must really be smart to lose so much money at once. I'm just a dumb hillbilly and I've never been able to lose more than what I can make recycling pop cans. I should go to one of those Harvard schools to really learn to be successful at losing money
Patrick, I just love your tone. "These individuals are making me explain the utter basics of their alleged jobs that they have failed to do and I am seriously aggrieved. " Fab coverage.
Swedish pension fund got hit to the tune of 1+ billion dollars and they just recently announced they sold Swedish banks and went SVB instead. Like literally a few days ago.
Really glad you mentioned the obvious, which I haven't seen many people doing - If you levy fees to banks, the banks don't just pay it out of pocket, they build it into consumer cost.
With all this scary news making the headlines, is this really a good time to buy stocks? I know everyone says the market is ripe enough for buying but will stocks tank further this year? How long until a full stock recovery?
I love you Patrick, you always offer great analysis and level headed thinking. I also enjoy your critical lense as you are very frank why procedures aren’t in place as well as scathing criticism of poor managerial decisions
Another excellent video as a former bank risk manager this was a failure in bank's treasury department and its Asset Liability Management (ALM). Obviously there was no one managing any of this.
"Up to $250K" is for individual accounts with one or zero beneficiaries. When adding the maximum number of beneficiaries, the FDIC limit (per institution) is $1.25 million.
Presumably the accounts for a business would not be treated the same as a single or trust account, where the per co-signer or per beneficiary increases would apply. "All deposits owned by a corporation, partnership, or unincorporated association at the same bank are combined and insured up to $250,000." And, "The number of partners, members, stockholders, or account signatories established by a corporation, partnership or unincorporated association does not affect insurance coverage."
It already hits bank customers - the Depositors Insurance Fund existed before this event for the very purpose of insuring depositors funds, they just extended the coverage in this specific case. The way you stated it mischaracterized it to sound like they were adding some new tax on banks that was suddenly going to be a new problem for depositors.
As a former Silicon Valley resident, the SVB collapse and skirted ripple impact to high tech companies only serves to confirm what you said and I have believed for over 20 years... The average Silicon Valley worker (C Level Execs included) are low intelligence individuals with high gullibility levels, and that is saying it nicely. Glad I left the area when I did. Very displeased that the Fed, Treasury, and FDIC felt it necessary to bail these high tech losers out. Total disgrace and disgusting. Just my two cents.
@@bellphorusnknight was a loooooong time resident. Never was directly in tech though. I remember when the valley was more of an ag hub. While I appreciate that times and places change, what Silicon Valley became, particularly after the 1990s, was simply something I grew very tired of. And now everyone knows what I grew tired of...people who thought their mere existence was changing the world when in reality they were not smart, capable, or hardworking...just lucky with no humility. And they all just got bailed out. Awesome! (Not).
I call them degreed idiots. And I bet if you talked with them arrogant as heck. Typical of Californians. I got out 8 years ago. Locking up venture capital funds for 10 years? Foolish
Wild story. Behind each tale of incompetence comes another one that’s somehow worse. Lost my breath when you said they weren’t hedging their interest rate risk.
Its pretty clear that the tech firms may have been flush with cash but they were woefully under equipped with people appropriately trained in finance. But then we have to remember that tech bros think they are experts at everything. RobinHood proved that.
This happened to a bank in California??? OH NOO... California is a new age state of the WEF?? NO?? People say California is sooo rich??? Businessmen say they want to get out of California.
Very Good Mr. Boyle, was not aware of the 130 Billion burning a hole in their pocket, resulting in poor decision making of Bonds and Crypto and a final result of BK. Always dangerous when you have more money than you know what to do with, ask the State of California.
17:33 - dude… you don’t even know. The problem with tech startups is they don’t even have accountants sometimes and will finally get a small accounting and finance team when they want to go IPO or when they get acquired by a bigger company. I worked in CA as an accountant with a specialization in software and tech. The amount of cleanup I had to do for the various companies I worked for was crazy. The worst was when I was an auditor and some of the accountants I audited didn’t even know what a reconciliation was. And this was for a publicly traded tech company!!! 🤦♀️ That’s how bad some of these accounting teams are in tech that even established public companies have such terrible accountants. It’s a wonder that they can even get 10-Ks out…
@@umiluv You lost. It just happens that their current CFO Steve Louden is on his way out (staying until 1st August to ease "transition") after losing just shy of $200M in 2022 (i.e. their entire profit in 2020 and 2021 combined), to be replaced by Dan Jedda (starting 1st May). Louden presumably knows the financials when he announced his departure last year
Thank you for explaining this is a clear way, whilst also tearing into those who deserve to torn a new one. Those who should know better from CEO's to VC's
Really the best coverage of this issue. It's been handled in a professional manner in the face of some glaring unprofessional behavior at SVB. The incestuous pall over the VC's and their bankers raises certain questions redolent of FTX. Why does the issue of addled brains arise pertaining the this Valley. The best and the brightest? Not so much.
I’ve a vivid memory of being 9 years old and planning out what I’d do If I won the lottery. Granted, I knew virtually nothing about wealth management, (or statistics) but “Keep whatever you don’t spend in accounts that earn interest”, “Don’t keep it all in one bank” and “Limit deposits to $250,000.00” were at the forefront on my nine year old mind! …but I guess I was a pretty weird kid.
The FTX situation shows the incompetence of the VC community. SVB is just another. These guys are gambling with other people's money, and not doing a great job overall.
That's part of the problem, it's other people's money that they use to profit themselves so if it gets lost because they took too much risk, who cares I'll find another sucker... or they'll get promoted.. .
@@frevazz3364 True. The basis of the problem is that those supplying the funds are often not people who made money managing money. A great example of what happens is Bernie Madoff. He preyed upon successful professionals, many of whom were retired. FTX was a similar situation, but generally with younger people. It takes all kinds.
It's mindboggling deja vu. All these financial sophisticates (most shareholders and certain depositors) are getting outright _and_ lefthanded indemnification for risks they knowingly assumed and, had the risks not manifested, would have benefited commensurate with the assumption of those higher risks. ▪︎But instead of allowing market capitalism to take its course, the Fed intervenes and upsets the natural order of the markets and once again creates ever more moral hazard in the economy. ▪︎So none of the players suffer consequences and they learn worse than nothing. They learn that risks aren't what they seem to be, and irresponsible assumption of those risks shouldn't keep them up at night-after all, regulators and the Fed stand watch with ready cash to make the Mean Man go away.
While most of us toil away at jobs just to get by, high flying investors and bankers are paid millions and revered for being the smartest people in the room. Turns out they don't know what the hell they're doing and ordinary people bear the cost. What's going on?
Worse their customers are startup with 95% total failure rate. 20% of startup will fail within their 1st years. 30% within their 2nd year and 70% will fail within 5 years. It was an insane decision by SVB to lock the deposit in 10 year treasury bond for customers that have such a high rate of cash burn.
SVB was small but would have wiped out an industry. The others seem more rich-people-y so I think they can live with some delayed dividend and partial recoupment
Did you say "Blind Spot", yea that's the ticket, I rob the bank by owning the bank and tell the world, with all my $Millions safety stashed away, blind spot, I had no idea what I was doing PERFECT, BLIND SPIT!!!
If it were a bank where the undesirables bank at, we would get back up to 250k. But since SVB was where the upper-crust tech guys and VCs bank at, they get everything back😂
It's my understanding the SVB held options, which may not have been called options, they may have been called contracts or warrants or some other term may have been used, but they had options to buy stock in the tech start-up companies to which they loaned money as a condition of the loan, and they also required the start-up company to deposit their cash into SVB. That would explain the relatively very high level of uninsured deposits and could be a questionable business practice as essentially much of their deposits, which were financing SVB, came from proceeds of loans from SVB. If that is true. It may not be. Still sorting out what happened. Hopefully, a public report will come out soon. ;-)
Eventually this fraud will impact taxpayers as usual. The CEO need to be jailed for his actions. Criminals should not be allowed to profit from their activities.
For anyone wondering why a bank is sold for one of -Her- His majesty's finest pounds rather than just given away, there has to be some exchange of value for it to be a legally binding contract.
Sign up for Power Corridor using this link: bit.ly/3TbHNzN
"Coming soon"
Nice startup. It has not yet taken off, and it is already burning money for advertising.
@@tolep I would love to hear more about the writers.
Sure you've noticed but the lamp appears to have totally blown the white balance on the video but amazing content as always 👍
@@thermologo3451 Probably they are goblins and sultry wood nymphs.
Where are my rap news?
"... the very first bank run ever organized by Slack." - This is why I keep watching these videos.😅
Exactly and he does it with a straight face. Poker would be hard with Mr. Boyle-- I mean Visiting Professor Boyle!
GameStop - Reddit organised
Cryptozoo - discord
Btc - twitter
Svb- slack 😂
I was almost certain he called Peter Thiel 'slag' but was quickly made disappointed
I had a Key and Peele moment when he said that. Goddam lost my mind lol. What a bomb to drop with a straight face.
LOL I thought he meant Slack were the first ones to start the bank run
I typically listen to financial videos on YT while driving or walking in a park. Not with Patrick's videos though. For Patrick's videos I wait for the kids to go to sleep, get my favorite snack and cherish every minute of this subtle, intelligent humor. Kudos!
There is one about Musk from a year ago that is pure gold.
These bankers must really be smart to lose so much money at once. I'm just a dumb hillbilly and I've never been able to lose more than what I can make recycling pop cans. I should go to one of those Harvard schools to really learn to be successful at losing money
I say "Sir Patrick requires all my attention, turn it down, I'll watch it later" when someone starts his video near me as a white noise.
@@ripvanrevsThey don't lose too much personal wealth...
Exactly what I'm doing at 01:00. All is quiet at this time. I even turn the water cooler off.
Patrick, I just love your tone. "These individuals are making me explain the utter basics of their alleged jobs that they have failed to do and I am seriously aggrieved. " Fab coverage.
Swedish pension fund got hit to the tune of 1+ billion dollars and they just recently announced they sold Swedish banks and went SVB instead. Like literally a few days ago.
Well if it's in the newly acquired HSBC arm of the Bank no problem, otherwise...........!?!
No need for Swedish pensioners to fear , U.S. taxpayers came to there aid
@@eddiekulp1241 not if they were shareholders which they probably were
Really glad you mentioned the obvious, which I haven't seen many people doing - If you levy fees to banks, the banks don't just pay it out of pocket, they build it into consumer cost.
It's fundamentally the same thing as increasing taxes on businesses. They just pass the cost along to consumers.
@@NemisCassander not if the consumer is willing to cut their consumption in response
The scam that underlies leftism as a whole!
With all this scary news making the headlines, is this really a good time to buy stocks? I know everyone says the market is ripe enough for buying but will stocks tank further this year? How long until a full stock recovery?
I love you Patrick, you always offer great analysis and level headed thinking. I also enjoy your critical lense as you are very frank why procedures aren’t in place as well as scathing criticism of poor managerial decisions
Another excellent video as a former bank risk manager this was a failure in bank's treasury department and its Asset Liability Management (ALM). Obviously there was no one managing any of this.
I swear you are so good at explaining these financial situation you need to be up for an award.
Another good one Patrick. Love the clarity you bring to complex situations. The dry wit is a bonus as well.
15:46: "...no one should be surprised..." it never fails to amaze me how many "professionals" wind up surprised.
This is an incredibly articulate and thorough explanation of the SVB debacle. Thank you for making this.
"Up to $250K" is for individual accounts with one or zero beneficiaries. When adding the maximum number of beneficiaries, the FDIC limit (per institution) is $1.25 million.
Presumably the accounts for a business would not be treated the same as a single or trust account, where the per co-signer or per beneficiary increases would apply. "All deposits owned by a corporation, partnership, or unincorporated association at the same bank are combined and insured up to $250,000." And, "The number of partners, members, stockholders, or account signatories established by a corporation, partnership or unincorporated association does not affect insurance coverage."
Ten years a forester and I’ve never seen a Sequoia felled so savagely.
Great job explaining all this Patrick. Thanks for putting this together for us
It already hits bank customers - the Depositors Insurance Fund existed before this event for the very purpose of insuring depositors funds, they just extended the coverage in this specific case. The way you stated it mischaracterized it to sound like they were adding some new tax on banks that was suddenly going to be a new problem for depositors.
Comes down to, no bail but bail in. You are by far the best at explaining banking. Thank you. Keep up the good work.
Love this channel, complex subject matter but presented in an understandable manner.
no fancy gfx, no ominous background track, yet i understood the entire fiasco better than all the other Vids on this topic combined!
Thank you for another educational video! You cover this story with a greater level of detail than anyone else I've seen.
Turns out when a broken system gambles long enough it will always go broke 100% of the time.
As a former Silicon Valley resident, the SVB collapse and skirted ripple impact to high tech companies only serves to confirm what you said and I have believed for over 20 years...
The average Silicon Valley worker (C Level Execs included) are low intelligence individuals with high gullibility levels, and that is saying it nicely.
Glad I left the area when I did. Very displeased that the Fed, Treasury, and FDIC felt it necessary to bail these high tech losers out.
Total disgrace and disgusting.
Just my two cents.
Resident or working resident? I assume your an actual prgramming techie
@@bellphorusnknight was a loooooong time resident. Never was directly in tech though. I remember when the valley was more of an ag hub.
While I appreciate that times and places change, what Silicon Valley became, particularly after the 1990s, was simply something I grew very tired of. And now everyone knows what I grew tired of...people who thought their mere existence was changing the world when in reality they were not smart, capable, or hardworking...just lucky with no humility. And they all just got bailed out. Awesome! (Not).
I call them degreed idiots. And I bet if you talked with them arrogant as heck. Typical of Californians. I got out 8 years ago. Locking up venture capital funds for 10 years? Foolish
You have two cents? I have an exciting business opportunity for you...
@@robertplatt643 😂
Thank you for another great video homie. I enjoyed every second. Please keep it coming.
Ruku explaition CFO comment had me laughing so hard, i almost fell off the bowl!
excited for your stand up comedy career Patrick! Id buy all the tickets
Hi Patrick, just found your channel. It’s nice to get a solid perspective on finance on who who actually works and teaches in finance.
Wild story. Behind each tale of incompetence comes another one that’s somehow worse. Lost my breath when you said they weren’t hedging their interest rate risk.
Glad to see someone bring up the HTM vs. AFS impact in accurate and concise detail. Well done!
The VC investors didn't advise or encourage it (banking with SVB). They demanded it.
Patrick, you're phenomenal! I very much enjoy watching and listening to your analysis of this situation.
Man, I love your dry sarcastic sense of humour.
PB you are an absolute legend. Such great clarity. And the smattering of jokes are always just chef's kiss-level.
I had no idea about All Birds, Blue Bottle Coffee, Atoms, or Cariuma. How do people even stay in the loop of Silicon Valley trends?
18:49 The dead pan humor is priceless.
Its pretty clear that the tech firms may have been flush with cash but they were woefully under equipped with people appropriately trained in finance.
But then we have to remember that tech bros think they are experts at everything. RobinHood proved that.
❤😂 first time listener and I’m hooked on your delivery.
This happened to a bank in California??? OH NOO... California is a new age state of the WEF?? NO??
People say California is sooo rich??? Businessmen say they want to get out of California.
At last, an analysis that makes sense. Thanks.
How come they didn't have a risk manager when Caroline Ellison was available?
CFO at Roku staring at their one SVB account - 😂😂😂
Very Good Mr. Boyle, was not aware of the 130 Billion burning a hole in their pocket, resulting in poor decision making of Bonds and Crypto and a final result of BK. Always dangerous when you have more money than you know what to do with, ask the State of California.
Someone needs to go to jail.
17:33 - dude… you don’t even know. The problem with tech startups is they don’t even have accountants sometimes and will finally get a small accounting and finance team when they want to go IPO or when they get acquired by a bigger company.
I worked in CA as an accountant with a specialization in software and tech. The amount of cleanup I had to do for the various companies I worked for was crazy.
The worst was when I was an auditor and some of the accountants I audited didn’t even know what a reconciliation was. And this was for a publicly traded tech company!!! 🤦♀️
That’s how bad some of these accounting teams are in tech that even established public companies have such terrible accountants. It’s a wonder that they can even get 10-Ks out…
How much you want to bet Roku didn’t even have a corporate treasurer?
@@umiluv You lost. It just happens that their current CFO Steve Louden is on his way out (staying until 1st August to ease "transition") after losing just shy of $200M in 2022 (i.e. their entire profit in 2020 and 2021 combined), to be replaced by Dan Jedda (starting 1st May). Louden presumably knows the financials when he announced his departure last year
Another excellent update on who’s fecked up in the world of finance etc.
Been a busy boy Patrick!
Thank you for explaining this is a clear way, whilst also tearing into those who deserve to torn a new one. Those who should know better from CEO's to VC's
Thanks Mr. Patrick.
I don't know what's better, the quality of information, or the quality of the dry comedy.
Both get a perfect 10/10 from me
I like this new laid back posture style, really suits your voice
Crisis : Happens
Me : 👨🏽💻🎧💻types Patrick Boyle
same old depressing banking story only made palatable by bitingly sarcastic commentary and a fantastic tie :-)
Thank you Patrick for clarifying, I thoroughly enjoy your presentations. I’m learning a about finance that I didn’t know
Patrick is the MAN! Thanks for the update and thorough explanation of what is going on.
Really the best coverage of this issue. It's been handled in a professional manner in the face of some glaring unprofessional behavior at SVB. The incestuous pall over the VC's and their bankers raises certain questions redolent of FTX. Why does the issue of addled brains arise pertaining the this Valley. The best and the brightest? Not so much.
We should never have had interest rates so low for so long, ..
Thanks for all the great videos! 🧠
This is obscene to have SVB and its depositors bailed out 100 cents on the dollar of 250K. That is just not right.
Cartels leave much of their deposits in the bank?? LOL
How about 100% reserve requirement on demand deposits and treat all other deposits as risk assets? No bailouts.
thanks for putting that in broad daylight. How do you hedge against interest rate risk for a newborn?
The first bank run to be organized via slack.... Pure boylean gold.
Thank u very much for this informative analysis
I’ve a vivid memory of being 9 years old and planning out what I’d do If I won the lottery. Granted, I knew virtually nothing about wealth management, (or statistics) but “Keep whatever you don’t spend in accounts that earn interest”,
“Don’t keep it all in one bank” and
“Limit deposits to $250,000.00” were at the forefront on my nine year old mind!
…but I guess I was a pretty weird kid.
not a coincidence that the top three crypto friendly banks were taken down
True because Crypto is a scam, that's why.
@@weltvonalexbecause the Rotchilds are enforcing their own centralised crypto
Billionaire investor Bill Ackman says SVB was not a bailout: 'The people who screwed up will bear the consequences'
lmao on both statements
People who screwed up (aka management) sold their stocks and got their bonuses. It was the regular share holders who got screwed.
@@chuckles069 I know because all those execs that were reckless during the great recession went to jail ....oh wait....
and nobody talks about the shareholders of SVB.....they lost it all....
The FTX situation shows the incompetence of the VC community. SVB is just another. These guys are gambling with other people's money, and not doing a great job overall.
That's part of the problem, it's other people's money that they use to profit themselves so if it gets lost because they took too much risk, who cares I'll find another sucker... or they'll get promoted.. .
@@frevazz3364 True. The basis of the problem is that those supplying the funds are often not people who made money managing money. A great example of what happens is Bernie Madoff. He preyed upon successful professionals, many of whom were retired. FTX was a similar situation, but generally with younger people. It takes all kinds.
It's mindboggling deja vu. All these financial sophisticates (most shareholders and certain depositors) are getting outright _and_ lefthanded indemnification for risks they knowingly assumed and, had the risks not manifested, would have benefited commensurate with the assumption of those higher risks.
▪︎But instead of allowing market capitalism to take its course, the Fed intervenes and upsets the natural order of the markets and once again creates ever more moral hazard in the economy.
▪︎So none of the players suffer consequences and they learn worse than nothing. They learn that risks aren't what they seem to be, and irresponsible assumption of those risks shouldn't keep them up at night-after all, regulators and the Fed stand watch with ready cash to make the Mean Man go away.
While most of us toil away at jobs just to get by, high flying investors and bankers are paid millions and revered for being the smartest people in the room. Turns out they don't know what the hell they're doing and ordinary people bear the cost. What's going on?
the Roku treasurer joke killed me lol. great video as always!
I love the dry humor man!
Enjoyed the sarcasm and explanation 🙂🤣
Could you talk about Canadian Truckers, The Canadian Government's actions in banking ,Breach of Faith and contagion?
Top content 👌 and always on the point. Much appreciated 🙏
My God! A typical 5th grade elementary school student could have managed their bank account risks better than these "geniuses" in Silicon Valley.
There are 4000+ banks in USA, one goes down that nobody heard of and media goes bananas.
Its biz as usual
"Look over here! Look over here!"
Is it a slow news weekend, or is there something they're pointing away from?
I venture to suggest the collapse was manufactured which is why the risk adjuster resigned. She was probably ignored.
Can't wait for SoFi bank to go under. Very excited for that.
The brightest and the best at it again.
Imagine having 3 million inside that bank 🏦 & you can't get your fund's 😡😩😫
Thanks
Worse their customers are startup with 95% total failure rate. 20% of startup will fail within their 1st years. 30% within their 2nd year and 70% will fail within 5 years. It was an insane decision by SVB to lock the deposit in 10 year treasury bond for customers that have such a high rate of cash burn.
Nice Paisley tie Patrick
I wonder how many MBAs from top tier universities / consulting firms they had on staff? still didn't stop it lol
What is the saying? The best and the.... slimiest????
SVB was small but would have wiped out an industry. The others seem more rich-people-y so I think they can live with some delayed dividend and partial recoupment
Even my kids who are under 10 years old have Bank accounts to, you know, buy the occasional Harry Potter book 🤣
Excellent. Excellent. Excellent video.
Great analysis....and funny too😂
Did you say "Blind Spot", yea that's the ticket, I rob the bank by owning the bank and tell the world, with all my $Millions safety stashed away, blind spot, I had no idea what I was doing PERFECT, BLIND SPIT!!!
"Stepped down" aka fled the dumpster fire she caused
Clear trend: banks that start with "S" are at higher risk.
Great explanation.
If it were a bank where the undesirables bank at, we would get back up to 250k.
But since SVB was where the upper-crust tech guys and VCs bank at, they get everything back😂
It's my understanding the SVB held options, which may not have been called options, they may have been called contracts or warrants or some other term may have been used, but they had options to buy stock in the tech start-up companies to which they loaned money as a condition of the loan, and they also required the start-up company to deposit their cash into SVB. That would explain the relatively very high level of uninsured deposits and could be a questionable business practice as essentially much of their deposits, which were financing SVB, came from proceeds of loans from SVB. If that is true. It may not be. Still sorting out what happened. Hopefully, a public report will come out soon. ;-)
Eventually this fraud will impact taxpayers as usual. The CEO need to be jailed for his actions. Criminals should not be allowed to profit from their activities.
Just the market correcting itself.
For anyone wondering why a bank is sold for one of -Her- His majesty's finest pounds rather than just given away, there has to be some exchange of value for it to be a legally binding contract.
Thanks!!
... is it normal for a bank to only have one risk manager? I was kinda imagining that they would have whole risk management teams
thank you!