JohnDB
Platinum Member
- Jun 16, 2021
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It's not just CA banks in trouble. In Brentwood NY there's one in process there too....people standing in line in the rain trying to get their money out.SVB is in CA which the Democrats are turning into East Germany.
They're completely woke in their business dealings and their hiring practices.
It's no small wonder that people don't trust them.
These are investment banks....
These aren't like First American or other retail banks. This is where investors deposit cash to invest into small companies to draw upon. The small companies usually have a good idea and business model or else they don't get the money or the investors.
This is like shark tank on steroids.
A lot of these companies are bought up by big companies eventually. And the investors make a huge profit and everyone goes home happy. About 60-80% fail....but that last 20-40% pay off so well that it evens out....however there's a chance that you can hit two winners and increase the earnings very high.
SVB is just one of several banks caught up by buying too much commercial paper from the Fed when it was issuing 2% T-Bills. From these the banks can loan money for cheap.
When rates rose these banks were caught holding too many of these t-bills and can't dump them.