‘Feds Broke It’: Observers Melt Down After Major Bank Collapses Overnight

Get Your Patriot911 Newsletter In Your Email Inbox

Observers of Silicon Valley and the tech sector melted down Friday following the sudden collapse of Silicon Valley Bank after its stock crashed Thursday.

Federal regulators shut down Silicon Valley Bank Friday after its stock price collapsed and customers began a bank run following the financial institution’s disclosure of a $1.8 billion loss on asset sales due to high interest rates, CNBC reported.

“Things are to get bad for tech: starting w startups/scaleups that did not manage to get their money out,” Gergely Orosz of Pragmatic Engineer tweeted. “There will be tech companies struggling to make payroll & pay vendors next week.”

“If you’re working in startups or scaleups: the world is likely to take a major turn in how volatile things are.” Orosz added. “Forget about worries about RTO, perks, promotions. This will have a wave that could mean bankruptcies, and even companies not at SVB will feel the effect.”

The potential effects of the shutdown were noted by Varda co-founder Delian Asparouhov, who gave advice to start-ups.

“If you do not have more than 6 weeks of runway outside of SVB,” Asparouhov posted on Twitter, “You need to raise emergency equity/debt financings ASAP.”

Some called for federal government intervention in the collapse.

“If the Treasury knew what they were up against, they’d have emergency legislation in front of Congress tonight and they’d enact before Monday,” Preston Byrne, an attorney with Brown Rudnick LLP, posted on Twitter, adding that Silicon Valley Bank’s investment in mortgage-backed securities (MBS) had made it vulnerable to inflation. “If other banks are exposed to MBS the same way SBV was, they need to provide bridge finance to get them through high inflation. TARP 2.”

Feds broke it. Feds need to own it and fix it. https://t.co/KnycpDKwLB

— Preston Byrne (@prestonjbyrne) March 10, 2023

“Feds broke it. Feds need to own it and fix it,” Byrne added later in the thread of posts, after calling for “rigorous financial discipline” to address inflation or the problem would get worse.

Democratic Rep. Eric Swalwell of California called for the federal government to protect deposits past the Federal Deposit Insurance Corporation’s $250,000 limit.

“I’m working with my CA colleagues to address the Silicon Valley Bank crisis,” Swalwell tweeted. “We must make sure all deposits exceeding the FDIC $250k limit are honored. Banking is about confidence. If depositors lose confidence on the safety of their deposits over 250k then we are in trouble.”

Some observers dunked on CNBC’s Jim Cramer in the wake of the bank’s collapse, citing his earlier recommendation that people buy stock in the bank.

“Jim Cramer said a month ago Silicon Valley Bank was a buy. He also said Bear Sterns was fine in 2008,” Genevieve Roch-Decter, CEO of Grit Capital tweeted. “This man deserves an Oscar.”

“Less than a month ago, Jim Cramer pitched Americans to buy $SIVB stock,” Charles Downs Jr. posted on Twitter. “The same people who freak out over Tucker Carlson are the same people who praise Jim Cramer. What’s that tell you?”

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.

Author
Recent Posts

Newswire

Newswire articles and reports are produced by another news agency, and the New Right Network editors believe you'll find it of interest. All content is attributed, belongs to its respective owners, and is used with permission.