Tons of small retailers use Stripe/Square in my niche industry. Bet they have no idea their payment gateway is at risk.
A swathe of the world’s leading online marketplaces such as Etsy and Shopify and payments companies such as Stripe and Square use SVB as a transaction bank.
Steve Looker, now on Rumble Video too as of Friday
Silicon Valley Bank Collapse: Government Action Today? - LIVE Breaking News Coverage
Congress and the free spending Biden administration is ULTIMATELY the culprit here.
It’s all an extension of Fed policy to curb inflation, reversing a 13-year zero-rate policy. And why did inflation occur? Isn’t it because of the massive increase in government spending, which resulted in huge printing of money ?
This of course pushed up rates in the middle and right side of the yield curve, devaluing existing bond holdings locked into older rate patterns. Investors noticed and then depositors too. The high-flying institution that specialized in providing liquidity in industries that have lost their luster suddenly found itself very vulnerable.
In addition, the SVB and probably other banks were exposed with a portfolio of collateralized mortgage obligations and mortgage-backed securities. But with rates rising, those are coming under stress too as high leverage in housing and real estate become untenable amidst falling valuations. Borrowers are finding themselves under water and that in turn adds to stress on lenders.
And where did SVB, and the entire banking industry, get the funds to bulk up their portfolios with such debt holdings? You guessed it: STIMULUS PAYMENTS!’
Hundreds of Billions flooded in and it had to be parked somewhere making some return. At the time it seemed like a good deal, until Fed policy changed.
Immense government spending which produced debt that was quickly monetized and eventually caused inflation, prompting the Fed to reverse course with the largest/fastest rate increases in history. And guess what? IT’s STILL GOING ON!
This destabilized (or restabilized) production structures away from the right side of the yield curve toward the left, shifting capital in search of return to the consumer-goods sector. Labor has begun to follow, thus creating a surplus of resources in information tech and a shortage in retails.
It was always naïve to think that this shift would take place without touching the banking institutions that shoveled leverage in the direction of industries that thrived during lockdowns but are cutting back massively
Apparently Transfer Wise has some exposure in SVB...oh well!
Silicon Ripoff Bank
Run by libtards for libtards
“””in late February in which it reported sharp falls in the market value of investment portfolios that were skewed to long-term mortgage-backed securities.”””
We have known for years that 1% ten treasury bonds or 3% 30 year mortgages would not last forever.
Yet, SVB was a binge buyer of those bonds and mortgages.
When Biden’s Inflation began two years ago, SVB apparently did nothing to sell off those holdings when their losses would have been minimal.
California is Venezuela without the personality.
I’m supposed to get paid by Etsy tomorrow. We’ll see what happens.
How about eBay? Aren’t they based out of SF as well?
Anyway.
Riddle me this. If I want to send (or receive payments) why do I need to use all these myriad third parties like “Stipe” and “Square” in the first place?
I have a bank account. My bank has a routing #. The individual who I want to pay has the same damn thing. So why can’t I just zap off (or receive) payment directly?
Global Payments (GPN) stock is going to take a hit. Uh oh...
And the first domino tips....
Whether the tip trips the next tumble, and sets off the whole chain, depends on how closely they are spaced, and the potential for other ambiguities to either propagate or terminate the fall of the chain.