Is Silicon Valley Bank Even A Bank?
Reconsidering the run on the bank...
Among the many questions yet to be raised about Silicon Valley Bank is whether or not it’s even a bank at all.
This question isn’t immaterial. If it is a bank, then depositors are entitled to their deposits but only up to the $250,000 level. (It looks like the Biden Admin is going to bail out all depositors.)
But what if Silicon Valley is, in fact, a front?
Then perhaps the government should seize the assets of the criminal proceeds in much the same way as its seized other assets of criminal enterprises. In Australia authorities seized billions from illegal casino operations. In the UK, authorities have pressed into service the Russian rubles in British accounts to investments in transitioning Britain away from fossil fuels.
This is called civil asset forfeiture and it’s something that ought to be considered as we analyze the money in Silicon Valley Bank’s coffers.
I don’t think the Biden administration has adequately considered the front possibility though it’s very much a live issue.
Consider a lot the strange problems associated with the bank and whether those strange characteristics make it deserving of bank status.
We know that SVB was founded over a poker game in 1983.
And SVB has ties to secret societies…
And of course, Silicon Valley Bank has had problems in the past when it comes to bad property bets.
Once again SVB has made bad property bets loaning money to vineyards throughout 2022-2023.
Curiously SVB had no head of risk assessment.
I frankly don’t care what Ms. Ersapah does in her free time but I do think that oftentimes we excuse a lot of carelessness because it’s politically correct. Just as the CIA has learned to speak woke so, too, have the Chinese apparently.
A major way that smaller banks can make money is to violate rules or to change those rules altogether.
We often think that banks are acquired because they are well run but sometimes the money is placed there precisely because it’s poorly run.
What was with all the real estate, particularly personal and commercial real estate loans?
The stunning failure of Silicon Valley Bank, which was shut down by state regulators and taken over by the Federal Deposit Insurance Corporation on Friday morning, sent shockwaves through the tech industry. But it could have major implications for real estate too.
Though the bank primarily lent to venture capital and private equity firms, about 15 percent of the loans on its books were secured by residential mortgages and commercial real estate, according to its 2022 financial report.
SVB held about $8.3 billion worth of loans secured by personal residence mortgages at the end of last year, and another $138 million linked to home equity credit lines.
The bank also held about $2.6 billion in commercial real estate loans. Some 35 percent of its commercial-backed loans were on multifamily properties. Office properties accounted for 21 percent.
In its annual report, SVB said its commercial-backed loans “may involve a higher risk of default compared to our other types of loans,” given uncertainty around the economy and residual effects of the pandemic on retail, hotels and offices.
The bank increased its exposure to commercial real estate in 2021 when it acquired Boston Private for $900 million, it said in the report.
What will happen to all of this real estate now?
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Writer Bryne Hobart gave an assessment of Silicon Valley Bank’s insolvency and there’s some theories that Hobart’s writings got the attention of Peter Thiel’s team.
There is a more disturbing theory about Thiel’s involvement in the banking run that I can’t readily dismiss about how Thiel et al. might have done Bibi Netanyahu a favor by essentially trapping all the money of Netanyahu’s opposition in a defunct bank.
(Recall that Founders Fund partner Keith Rabois is very close to Netanyahu. We’ve written about that relationship at length here and of course Founders Fund Miami is in a Moshe Mana building.)
Here’s the Jewish Press:
SVB has an Israeli branch, managed by David Cohen and Gadi Moshe, and serves an estimated 500 Israeli companies, including giants such as eToro, Redis, Verbit, Fireblocks, and Capitolis. According to reports, companies that tried to take their money out of SVB were refused.
Now for the karma portion of our report: according to Bizportal, several Israeli hi-tech companies that wanted to protest the Israeli government’s judicial reform legislation took their money out of Israeli banks this past month and moved it to… SVB.
Could it be that because of the 500 Israeli start ups had moved their money to SVB in protest of Bibi that this bank run was a Likud op?
Recall that Thiel is very close to the NatCon group led by Yoram Hazony who has been working on the “reforms” of the judiciary with help from Federalist Society and they are all in. Thiel is also a backer of the Federalist Society and of Leonard Leo though he is but a pittance compared to billionaire Barre Seid. Thiel also invested in the Israeli tech company Carbyne, alongside of Trae Stephens.
We should also be thinking seriously about the role of Signature Bank here, especially given its Israeli organized crime connections.
Oh and its connections to her.
But I repeat myself.
Can you say more about “Once again SVB has made bad property bets loaning money to vineyards throughout 2022-2023.”
Why is lending money to people buying and running vineyards a bad bet?
There's more than a Dasha of ol' hanky panky when one catches sight of that nose on Ivanky