Page 87 of 110

Re: Facebook, Google, et al

Posted: Wed Mar 15, 2023 10:26 am
by jfish26
DCHawk1 wrote: Tue Mar 14, 2023 11:51 am
jfish26 wrote: Tue Mar 14, 2023 11:45 am
DCHawk1 wrote: Tue Mar 14, 2023 11:40 am

That's not even close to the entire story.

They also got greedy, taking on excess duration risk. They had a ton of spread risk w/a ton of mortgage-backed securities. They were overinvested in venture debt. They didn't hedge their interest risk. And because they kept their treasuries and mortgage-backed securities in held-to-maturity accounts, they weren't marked to market, effectively hiding all of the risk.

This was major risk management failure and a minor regulatory failure.
I agree of course. But the point is - this is not remotely the same fact pattern as the 2007-08 crisis.
Fair enough.
I found this directionally-accurate, and (more importantly) accessible:

https://www.theringer.com/2023/3/13/236 ... comes-next
Thompson: I want to ask you a question that sort of lives behind the news headlines, which is the question of blame. Whose fault is this? I first want to look at Silicon Valley Bank leadership. The 2008 financial crisis was caused by the collapse of the housing market, which involved all of these incredibly complicated securities and derivatives that basically no one understood.

Am I wrong, or did SVB basically screw itself because they bought basic Treasury bonds that got smoked by widely telegraphed rate hikes? Hindsight is always 20/20, but it’s kind of astonishing looking back and seeing just how obvious their balance sheet problems were.

Hoffman: You are not wrong. Like, if you had told me six months ago that Silicon Valley Bank would’ve failed, I would’ve said, “Well, sure, they probably did something dumb in Silicon Valley,” but nope, they did something dumb with Treasury bonds. The basic math here is that they got a lot of money in 2020. If you were a start-up and you got a check from Andreessen Horowitz, you walked it over to the Silicon Valley Bank. You said, “Hello, I am a funded start-up founder. Here is my money.”

And what Silicon Valley Bank did with that—what you have to remember is these are deposits, which means that they have to give it back to you anytime you ask for it. So what they should have done is put it in really short-dated things. They could have lent it overnight to another bank. They could have bought one-month or three-month Treasury bills. But nope, they bought long-dated bonds, which means that they cannot access that money for a while.

Now, this is where I’ll bore your listeners for a minute with an accounting diversion. But if you’re going to buy these bonds, you say, “I have no intention of ever selling them; I’m just going to hold them until they mature.” These are five-, 10-, 20-year Treasury bonds. You can put them in a sock drawer, the way your parents gave you savings bonds when you were a baby, and then you found them 20 years later and took them to the Treasury, right?

So you can keep those in a sock drawer, collect the interest, and never have to decide every day what they’re worth based on what’s happening in the market. That’s fine. The other problem is that all those deposits that Silicon Valley Bank had gotten started to dwindle because start-up fundraising dried up, companies couldn’t go public, so they started to spend down that money that they had raised.

And so you’ve heard about a balance sheet. Those are the two sides of the balance sheet, and they got out of balance, which is that deposits started to go away, and they had these assets that they had decided they were never going to sell, so they didn’t need to value them. But then they started to have to sell them. And what had happened in the meantime is that interest rates had gone up very quickly.

And again, there’s some boring bond math, but what happens is that when interest rates go up, the value of bonds that you bought at a fixed rate from a year ago are not worth as much. And so they have this huge hole, and they were functionally insolvent really fast. This was terrible risk management. What they did with the bonds is inexcusable, and they will obviously all be fired because the bank is going out of business, but just inexcusable and utterly boneheaded.

Re: Facebook, Google, et al

Posted: Wed Mar 15, 2023 8:02 pm
by Deleted User 863

Re: Facebook, Google, et al

Posted: Thu Mar 16, 2023 11:49 am
by Sparko
So. The Fed and its tinkering.

Re: Facebook, Google, et al

Posted: Thu Mar 16, 2023 8:36 pm
by Deleted User 863

Re: Facebook, Google, et al

Posted: Fri Mar 17, 2023 5:11 pm
by DCHawk1
Ho. Lee. Fuck.


Re: Facebook, Google, et al

Posted: Fri Mar 17, 2023 5:17 pm
by Deleted User 863
JFC.

Very alarming.

Re: Facebook, Google, et al

Posted: Fri Mar 17, 2023 5:58 pm
by randylahey
Super fucking sketchy

Re: Facebook, Google, et al

Posted: Sat Mar 18, 2023 3:25 pm
by Overlander
When is this country going to stop curing the ills of businesses that prove that they aren’t very good at business?

Re: Facebook, Google, et al

Posted: Sat Mar 18, 2023 4:07 pm
by Deleted User 863
Overlander wrote: Sat Mar 18, 2023 3:25 pm When is this country going to stop curing the ills of businesses that prove that they aren’t very good at business?
❤️

Re: Facebook, Google, et al

Posted: Sat Mar 18, 2023 4:22 pm
by jhawks99
Overlander wrote: Sat Mar 18, 2023 3:25 pm When is this country going to stop curing the ills of businesses that prove that they aren’t very good at business?
You mean DDD, right?

Re: Facebook, Google, et al

Posted: Sat Mar 18, 2023 7:19 pm
by Overlander
That too.
The great American Regulations Buster

Re: Facebook, Google, et al

Posted: Sat Mar 18, 2023 8:16 pm
by Mjl
Overlander wrote: Sat Mar 18, 2023 3:25 pm When is this country going to stop curing the ills of businesses that prove that they aren’t very good at business?
Not sure I understand. SVB wasn't bailed out, they're gone.

Re: Facebook, Google, et al

Posted: Sat Mar 18, 2023 9:04 pm
by Overlander
Mjl wrote: Sat Mar 18, 2023 8:16 pm
Overlander wrote: Sat Mar 18, 2023 3:25 pm When is this country going to stop curing the ills of businesses that prove that they aren’t very good at business?

Not sure I understand. SVB wasn't bailed out, they're gone.
Not necessarily talking about SVB, just dumbfucks who cant run businesses profitably and correctly seem to think if they fuck it up too bad….surely they can get someone to bail them out

Re: Facebook, Google, et al

Posted: Sun Mar 19, 2023 2:34 pm
by Shirley

Re: Facebook, Google, et al

Posted: Thu Mar 23, 2023 9:46 am
by Shirley
I had little to no interest in watching the CEO of Tik Toc appear before congress today, but if you're watching one of the business channels, you can't avoid it.

And, if you want to witness that rare, whimsical phenomenon referred to in the distant past as "bipartisanship", turn on CNBC and watch both sides of the isle compete for today's most performative endeavor to rake him over the coals, in their pursuit to secure a place in today's news cycle.

Pro tip: If you do decide to watch, avoid making "Communist China" your drinking word, unless being cognizant the rest of the day holds no value for you.

Re: Facebook, Google, et al

Posted: Mon Mar 27, 2023 3:40 pm
by ousdahl
https://www.wsj.com/articles/twitter-of ... f-938ee7f8


Elon Musk said Twitter Inc. employees will receive stock awards based on a roughly $20 billion valuation, less than half of the $44 billion price he acquired the company for last year, according to an email viewed by The Wall Street Journal.

Re: Facebook, Google, et al

Posted: Mon Mar 27, 2023 4:36 pm
by Shirley
ousdahl wrote: Mon Mar 27, 2023 3:40 pm https://www.wsj.com/articles/twitter-of ... f-938ee7f8


Elon Musk said Twitter Inc. employees will receive stock awards based on a roughly $20 billion valuation, less than half of the $44 billion price he acquired the company for last year, according to an email viewed by The Wall Street Journal.
Screwing people who work for him?

How Trumpian of him.

Re: Facebook, Google, et al

Posted: Mon Mar 27, 2023 4:51 pm
by ousdahl
there's so many parallels to Trump.

The shady bidness, the multiple wives, the misconduct allegations, the fanboys who think he's a genius, the hair plugs.

rumor mill is even the $20 bil estimate is generous

Re: Facebook, Google, et al

Posted: Mon Mar 27, 2023 8:44 pm
by Shirley
ousdahl wrote: Mon Mar 27, 2023 4:51 pm there's so many parallels to Trump.

The shady bidness, the multiple wives, the misconduct allegations, the fanboys who think he's a genius, the hair plugs.

rumor mill is even the $20 bil estimate is generous
While no one can agree on what Twitter is currently worth, the only person who thought it was worth anywhere near what Elon paid for it, $44 billion, was Elon.

I shouldn't complain tho. When part-time CEO Jack Dorsey left I was among the euphoric who thought the stock would go up, and initially, it did. I bought some with a cost-basis of $47.30/share. Then Elon rode up on his white horse when it was ~ $50/share, (if I recall), and committed to buy the co. for $54.20/share, ($44 billion). Then, twitter started going down precipitously and pretty soon it was in the 31's, and I was ~ $4,000 down. Apparently, because he's a genius, (Or, a high-functioning person on the spectrum?), Elon didn't bother with any due diligence before making his performative offer, and when he tried to change his mind later it turned out he couldn't back out. So, I cleared almost $2,000 on the trade when he was forced to honor his offer.

#thanksspacekaren

Re: Facebook, Google, et al

Posted: Mon Mar 27, 2023 10:47 pm
by jhawks99
That's a Steve Miller song, right?

I'm a space Karen.....