Silicon Valley Bank--First woke, now broke!

[Aldebaran]

More proof that going woke and aligning with ESG standards doesn't make for a successful business.

Investors implore the government to step in after Silicon Valley Bank failure

Voices from tech and finance are increasingly calling for the federal government to push another bank to take over the failed Silicon Valley Bank.

www.cnbc.com

But at least they were all on-board with all the Woke buzzwords and phrases being thrown around: Diversity, Inclusion, Tolerance, equity, social justice, empathy, blah blah blah! Living Our Values | Silicon Valley Bank

Let's hope corporate America actually WAKES up and focuses on hiring intelligent and capable people rather than focusing more on the perspective employee's skin tone, or favoring an employee who has sex with those of the same gender, or favoring those who can't even identify which gender they are. And ESG scores have nothing to do with being successful. They only indicate how in-line a company is with government demands, which are clearly not in anyone's favor.

 

[Pommer]

More proof that going woke and aligning with ESG standards doesn't make for a successful business.

Investors implore the government to step in after Silicon Valley Bank failure

Voices from tech and finance are increasingly calling for the federal government to push another bank to take over the failed Silicon Valley Bank.

www.cnbc.com

But at least they were all on-board with all the Woke buzzwords and phrases being thrown around: Diversity, Inclusion, Tolerance, equity, social justice, empathy, blah blah blah! Living Our Values | Silicon Valley Bank

Let's hope corporate America actually WAKES up and focuses on hiring intelligent and capable people rather than focusing more on the perspective employee's skin tone, or favoring an employee who has sex with those of the same gender, or favoring those who can't even identify which gender they are. And ESG scores have nothing to do with being successful. They only indicate how in-line a company is with government demands, which are clearly not in anyone's favor.

From what I’ve seen it was a bad one too.
They gave the bank all the breaks to save itself and they came up empty with no plan.
My totally uninformed guess is that they were big into crypto (but I’m not a numbers-guy).

 

[Maria Billingsley]

More proof that going woke and aligning with ESG standards doesn't make for a successful business.

Investors implore the government to step in after Silicon Valley Bank failure

Voices from tech and finance are increasingly calling for the federal government to push another bank to take over the failed Silicon Valley Bank.

www.cnbc.com

But at least they were all on-board with all the Woke buzzwords and phrases being thrown around: Diversity, Inclusion, Tolerance, equity, social justice, empathy, blah blah blah! Living Our Values | Silicon Valley Bank

Let's hope corporate America actually WAKES up and focuses on hiring intelligent and capable people rather than focusing more on the perspective employee's skin tone, or favoring an employee who has sex with those of the same gender, or favoring those who can't even identify which gender they are. And ESG scores have nothing to do with being successful. They only indicate how in-line a company is with government demands, which are clearly not in anyone's favor.

Start ups are great when they eventually come out of that position and begin to turn a profit. Since most of the depositors were of this ilk, they basically lost investors money. Someone should have told them about the golden rule from the FDIC. But maybe only us baby boomers know?
That being said, woke has nothing to do with this. Banks can go under.
Blessings.

FDIC: Bank Failures in Brief

 

[NxNW]

More proof that going woke and aligning with ESG standards doesn't make for a successful business.

Everyone who confuses correlation with causation ends up dying.

 

[essentialsaltes]

More proof that going woke and aligning with ESG standards doesn't make for a successful business.

What makes you think the ESG initiatives had anything to do with the failure? All the discussion I've seen has focused on Silicon Valley investments (that SVB focused on) being high-risk (and since fewer people were now willing to invest in them, these companies drew on their bank balances to run their operations, helping to create a run on the bank), and inflation/rising interest rates making the low-interest rate government securities that banks rely on for stability becoming more of a a negative drag.

To fund the redemptions, Silicon Valley Bank sold on Wednesday a $21 billion bond portfolio consisting mostly of U.S. Treasuries. The portfolio was yielding it an average 1.79%, far below the current 10-year Treasury yield of around 3.9%. This forced SVB to recognize a $1.8 billion loss, which it needed to fill through a capital raise.

Nobody was eager to pump capital into a bank that was selling assets at a loss, while its customers were actively withdrawing all their own money.

 

[iluvatar5150]

More proof that going woke and aligning with ESG standards doesn't make for a successful business.

Investors implore the government to step in after Silicon Valley Bank failure

Voices from tech and finance are increasingly calling for the federal government to push another bank to take over the failed Silicon Valley Bank.

www.cnbc.com

But at least they were all on-board with all the Woke buzzwords and phrases being thrown around: Diversity, Inclusion, Tolerance, equity, social justice, empathy, blah blah blah! Living Our Values | Silicon Valley Bank

Let's hope corporate America actually WAKES up and focuses on hiring intelligent and capable people rather than focusing more on the perspective employee's skin tone, or favoring an employee who has sex with those of the same gender, or favoring those who can't even identify which gender they are. And ESG scores have nothing to do with being successful. They only indicate how in-line a company is with government demands, which are clearly not in anyone's favor.

What an absurd take. Why bother demonstrating how "wokeness" contributed to their failure (psst: it didn't) when you can just completely ignore the issue of "correlation is not causation" and attribute to it whatever bad things you'd like? That certainly is more convenient.

It's clear that "wokeness" has become some sort of superstitious idol that the right fears and to which they'll ascribe most anything. It's like the Puritans and witches. Have you tried drowning wokeness? What about burning it?

On the flip side, Talen Energy Supply and Vital Pharmaceuticals, both Republican donors, both filed for bankruptcy last year.

The Year In Bankruptcy: 2022 | Insights

<div><p>One year ago, we wrote that, in early 2021, it was widely anticipated that the unprecedented pressure the COVID-19 pandemic brought to bear on the U.S. economy would lead to a boom in corporate bankruptcy filings. That boom never materialized. Instead, business bankruptcy filings in the...

www.jonesday.com

Talen Energy PAC Contributions to Federal Candidates

Talen Energy gave $26,750 to federal candidates in the 2015-2016 election cycle. See the details.

www.opensecrets.org

Company that gave six figures to pro-Trump super PAC got PPP loan worth at least $5 million

An energy drink company that donated six figures to President Donald Trump’s preferred super PAC got a PPP loan worth at least $5 million.

www.opensecrets.org

I guess that means that being a MAGA fan is also bad for business.

 

[essentialsaltes]

Trump signs law rolling back post-financial crisis banking rules (May 24, 2018)​

At a signing ceremony at the White House, Trump said the legislation "rolls back the crippling Dodd-Frank regulations that are crushing community banks and credit unions nationwide. They were in such trouble. One size fits all - those rules just don't work."

Trump had vowed to "do a big number" on the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, and some House Republicans had hoped to repeal the law entirely - or at least make major changes to rein in the watchdog agency.

Under the new law, banks with more than $50 billion in assets would no longer be automatically subject to the toughest federal regulations, including a yearly stress test to prove they could survive another onslaught of economic turmoil. The bill would raise that threshold to $250 billion in assets, potentially allowing several high-profile financial institutions, including American Express and Ally Financial, to escape the extra regulatory scrutiny.

By raising the asset threshold to $250 billion, the law is expected to reduce the number of banks subject to heightened regulatory scrutiny from 38 to 12.


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While relatively unknown outside of Silicon Valley, SVB was among the top 20 American commercial banks, with $209 billion in total assets at the end of last year, according to the FDIC.

 

[iluvatar5150]

Trump signs law rolling back post-financial crisis banking rules (May 24, 2018)​

At a signing ceremony at the White House, Trump said the legislation "rolls back the crippling Dodd-Frank regulations that are crushing community banks and credit unions nationwide. They were in such trouble. One size fits all - those rules just don't work."

Trump had vowed to "do a big number" on the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, and some House Republicans had hoped to repeal the law entirely - or at least make major changes to rein in the watchdog agency.

Under the new law, banks with more than $50 billion in assets would no longer be automatically subject to the toughest federal regulations, including a yearly stress test to prove they could survive another onslaught of economic turmoil. The bill would raise that threshold to $250 billion in assets, potentially allowing several high-profile financial institutions, including American Express and Ally Financial, to escape the extra regulatory scrutiny.

By raising the asset threshold to $250 billion, the law is expected to reduce the number of banks subject to heightened regulatory scrutiny from 38 to 12.


---

While relatively unknown outside of Silicon Valley, SVB was among the top 20 American commercial banks, with $209 billion in total assets at the end of last year, according to the FDIC.

 

[durangodawood]

If SVB had just been whiter we wouldnt be in this mess.

 

[adrianmonk]

An interesting thread on Twitter about the liquidity of SVB

https://twitter.com/i/web/status/1634603869752766471

Elan Musk has joined the chat.

Elon Musk is ‘open to the idea’ of buying Silicon Valley Bank as he lays Twitter payments groundwork

Musk is watching the Silicon Valley Bank failure with interest as he works to enable payments on Twitter.

fortune.com

An article commenting on bank failures since 2000.

Not just SVB. There have been 562 bank failures since 2000.

yarn.pranshum.com

 

[USincognito]

Trump signs law rolling back post-financial crisis banking rules (May 24, 2018)​

At a signing ceremony at the White House, Trump said the legislation "rolls back the crippling Dodd-Frank regulations that are crushing community banks and credit unions nationwide. They were in such trouble. One size fits all - those rules just don't work."

Trump had vowed to "do a big number" on the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, and some House Republicans had hoped to repeal the law entirely - or at least make major changes to rein in the watchdog agency.

Under the new law, banks with more than $50 billion in assets would no longer be automatically subject to the toughest federal regulations, including a yearly stress test to prove they could survive another onslaught of economic turmoil. The bill would raise that threshold to $250 billion in assets, potentially allowing several high-profile financial institutions, including American Express and Ally Financial, to escape the extra regulatory scrutiny.

By raising the asset threshold to $250 billion, the law is expected to reduce the number of banks subject to heightened regulatory scrutiny from 38 to 12.


---

While relatively unknown outside of Silicon Valley, SVB was among the top 20 American commercial banks, with $209 billion in total assets at the end of last year, according to the FDIC.

I'm shocked that childish, bumper sticker slogans favored by and seen as sophisticated political discourse by some of our fellow citizens, fails to capture the reality of this bank failure.

 

[durangodawood]

Its stuff like this that reveals how plainly woke-panic is so much more a tool of political agitation than a response to real problems.

I mean there's plenty of so called woke stuff that makes me roll my eyes. But its plain to see how indignation at "woke" is being used to leverage peoples R party allegiance - in the glaring absence of meaningful R party policy ideas.

So many things to address in the world:
The rise of China
The coming climate disasters and migrations
A big bad war in Europe instigated by a nuclear power
Learning from the last pandemic for the next
Deaths of despair across the land
The paycheck to paycheck economy most people live in.

But no. Instead its a drumbeat of mostly ridiculous woke-panic. Like "the bank that woke killed". Silly and actually dangerous how people are so easily misdirected.

 

[NxNW]

Trump had vowed to "do a big number" on the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, and some House Republicans had hoped to repeal the law entirely - or at least make major changes to rein in the watchdog agency.

Under the new law, banks with more than $50 billion in assets would no longer be automatically subject to the toughest federal regulations, including a yearly stress test to prove they could survive another onslaught of economic turmoil. The bill would raise that threshold to $250 billion in assets, potentially allowing several high-profile financial institutions, including American Express and Ally Financial, to escape the extra regulatory scrutiny.

By raising the asset threshold to $250 billion, the law is expected to reduce the number of banks subject to heightened regulatory scrutiny from 38 to 12.

What could possibly go wrong?

 

[ThatRobGuy]

But at least they were all on-board with all the Woke buzzwords and phrases being thrown around: Diversity, Inclusion, Tolerance, equity, social justice, empathy, blah blah blah! Living Our Values | Silicon Valley Bank

Let's hope corporate America actually WAKES up and focuses on hiring intelligent and capable people rather than focusing more on the perspective employee's skin tone, or favoring an employee who has sex with those of the same gender, or favoring those who can't even identify which gender they are. And ESG scores have nothing to do with being successful. They only indicate how in-line a company is with government demands, which are clearly not in anyone's favor.

While I'm critical of a lot of the "woke culture" that exists out there, I think trying to desperately tie this bank's failures to that is a stretch.

Especially considering that other banks have embraced some of those things and are doing fine.


The actual problems with this bank, from what I've inferred, were that they were too single threaded in their purpose (my understanding is they almost exclusively were in the ream of tech start-up loans and funding), and like many banks, only kept a percentage of deposits on hand (like many banks do...and invest the rest in the form of various investments and loans). A panic happened and there was a bank run.

That's why most banks try to diversify between a variety of investment and lending avenues and don't put all of their eggs in one basket, so that if one particular sector has a "not so stellar" quarterly earnings report (or companies have to start withdrawing their own cash to cover expenses if they're having a bad year), people don't rush out to withdraw their cash in a panic.

Trying to blame ESG for this is borderline laughable. It was a series of poor financial strategies that caused this. The ESG pursuance aspect of their business is completely irrelevant to this issue.

 

[BPPLEE]

More proof that going woke and aligning with ESG standards doesn't make for a successful business.

Investors implore the government to step in after Silicon Valley Bank failure

Voices from tech and finance are increasingly calling for the federal government to push another bank to take over the failed Silicon Valley Bank.

www.cnbc.com

But at least they were all on-board with all the Woke buzzwords and phrases being thrown around: Diversity, Inclusion, Tolerance, equity, social justice, empathy, blah blah blah! Living Our Values | Silicon Valley Bank

Let's hope corporate America actually WAKES up and focuses on hiring intelligent and capable people rather than focusing more on the perspective employee's skin tone, or favoring an employee who has sex with those of the same gender, or favoring those who can't even identify which gender they are. And ESG scores have nothing to do with being successful. They only indicate how in-line a company is with government demands, which are clearly not in anyone's favor.

I recently changed jobs and as part of my training had a class on Diversity, Equity and Inclusion. They gave us a handout with things you cannot say because they are micro aggressions. One of the statements you cannot say because it’s a micro aggression was “I think the most qualified person should get the job.”

 

[BPPLEE]

An Inconvenient Truth About ESG Investing

Investing in sustainable funds that prioritize ESG goals is supposed to help improve the environmental and social sustainability of business practices. Unfortunately, close analysis suggests that it’s not only not making much difference to companies’ actual ESG performance, it may actually be...

hbr.org

 

[iluvatar5150]

An Inconvenient Truth About ESG Investing

If ESG investing had anything to do with SVB's collapse, then maybe your post or the OP's would be relevant. But it didn't. It was their investing in treasuries that was the problem along with their heavy reliance on commercial depositors with account balances well beyond the FDIC's insurance limit. When their treasuries started losing value, they started selling and their depositors panicked.

staff edit

 

[BPPLEE]

If ESG investing had anything to do with SVB's collapse, then maybe your post or the OP's would be relevant. But it didn't. It was their investing in treasuries that was the problem along with their heavy reliance on commercial depositors with account balances well beyond the FDIC's insurance limit. When their treasuries started losing value, they started selling and their depositors panicked.

My post is about ESG. I don’t know what caused SVBs collapse.

 

[iluvatar5150]

My post is about ESG.

Right. Your post is about ESG, because the OP (incorrectly) pointed the finger at ESG.

I don’t know what caused SVBs collapse.

I just told you.

 

[Aldebaran]

Right. Your post is about ESG, because the OP (incorrectly) pointed the finger at ESG.

And therefore it's on-topic.