Exactly, that’s how fractional reserves work. No bank can survive a run like the VCs pulled on SVB

> November 2021

You literally proved my point. The Feds went from no raise in the foreseeable future in AUGUST ‘21 to yeah everything I said was false 2 MONTHS LATER.

The Feds, in mid 2021, said they had NO INTENTIONS of raising rates and inflation for transitory. Then over the next 12 months, they go 180 and raise rates from 0 to 450bps (unprecedented and much more than Volker’s 2x increase in rates).

So do you really blame them for not listening to what the Feds say

The solution is understand the 250k FDIC limit for one, It’s only been around a few decades

>he’s not in the VC group chats, it was a bunch of fire GIFs

They were short like $4 billion out of the total $200 billion in deposit and in the process of raising funds. Again, their long term treasuries were being held to maturity so the only way they don’t have enough money is if every depositor wants ALL the money NOW at the same time, which is what happened when the VC group chats literally screamed fire

The bank failures that led to their insolvency was management and the rates. But the VCs, who alongside their founders own like 90% of the bank’s deposits, panicked and screamed fire started the run that led to the illiquidity rush.

In short, yes all of those regards are to blame for SVB specifically

Every part of this sentence hurts to read