Posted on 03/18/2023 9:10:11 AM PDT by ProtectOurFreedom
Is there anything more Soviet than a bank that lends money to companies making things no one wants to buy?
That's the missing puzzle piece on why Silicon Valley Bank went belly up, and Kimberly Strassel of the Wall Street Journal has found it: the failure of the bank was premised on ESG, which descended into wokester lending priorities, creating the abnormal conditions that left the bank ripe for a meltdown. Strassel:
Now it's all come down, and wokery is clear as day the big reason.
Most of these companies weren’t filling some vital market need. Rather, as the Journal reported, SVB was beloved for its willingness to offer “banking services to startups that often weren’t profitable, in some cases didn’t have a product, and would otherwise have a hard time getting a line of credit or a loan from a larger bank.” One tech entrepreneur provided law.com a more scathing description of SVB’s products: “They’re basically subprime business loans. You’re talking about companies that have no credit profile, they’re burning cash and are unlikely to raise the same type of capital because of interest rates. . . . It was basically social credit.” What inspires a bank to disregard risk and shower money on products or services that nobody is clamoring to buy? One answer is easy money and misguided regulation, which washed dollars into the economy even as it pushed banks like SVB to load up on sovereign debt, lulled by a Federal Reserve-fed belief that interest rates would stay near zero forever.
The other? Washington handouts, via President Biden’s effort to engineer a climate industry that otherwise wouldn’t exist.
...the bank lent to companies that couldn't sustain themselves without Biden's centrally directed green economy to prop them up.
(Excerpt) Read more at americanthinker.com ...
I need to read Strassel's original article now.
I'd wager that we have not seen the end of the fallout of the Biden climate insanity because the majority of the "Inflation Reduction Act" is aimed at green energy driven by climate fantasies. The "free" money from the government stimulates the creation of companies that produce products nobody wants to buy and they will all fail, taking other banks down with them.
Yes, but the admin and the media approves, so there will be no consequences. We will all pay for this.
Knowing they’ll get a bailout.
Nothing but laundering money from the taxpayer. Without the taxpayer most of the rich Left would be broke
Is it a bank...
Or a front for money laundering...?
Strassel is one tough chick.
As has been said, the bank went woke and they have gone broke.
The other? Washington handouts, via President Biden’s effort to engineer a climate industry that otherwise wouldn’t exist.
************************
It says it all
This is every bit as much crony capitalism as Solyndra was.
MIX IN CRYPTO TRANSACTIONS & you have your answer.
JUST LIKE Solyndra.
Hundreds of millions (billions) of "campaign contributions" flow to the Dems from this Climate and Green crap and nothing good has come out of it. Out of all the money that's flowed into this crap, I'm hard pressed to find a SINGLE THING that has come out of it. Not one.
When I lived in SV, it was where startups were born.
Now I think u are correct.
It is a money laundering operation funding the Uber Left.
Green now means ,SCAM!!!!
The WHOLE of the “green” and “climate” industries are nothing but crony capitalism. Nothing has come out of it. Well, except maybe Tesla Motors and it paid its loans back. Other than that, what do we see that is useful out of this government spending spree?
They’ll grab as much taxpayer money as they can and no one will stop them
I have been and continue to be disparaging of most of the Tech industry and investment in the same. You can’t collateralize bits, bytes, 0’s and 1’s. There are some good products but just how many apps are useful, how many games can be played, how many online marketing programs do you need and can you really compete effectively with established players? SHOP is one example of a new splash in the pan that comes to mind.
There is also the green folly of woke investment in things, subsidized and fostered by the gooberment to build products people simply are not wanting.
To be sure, some have made a lot of money if they get in early and out quickly enough but most of their investments are not going to last long term because they don’t build that kind of value.
There was also this article from these pages and here is a longish excerpt.
This negative article of Silly Cone Valley is surprisingly from The New Republic.
Long but it embodies some of the things I have said critical of the lack of value generation and house of cards so much of Tech is built on. Tech is just new speak for .com or dot.com, the failure to generate worth of 2000.
https://freerepublic.com/focus/f-news/4138067/posts
An excerpt echoing my point of failure to create real value but gimmickry instead that serve no useful purpose to society and instead the opposite making life more difficult for most. These are not investments but get rich quick and get out if you are smart. If your only goal is money this is your ticket but hurry.
I do not think it is unethical to make money. I think it is wrong to make money unethically.
The excerpt:
“Here is where I must note that I don’t want to paint with too broad a brush here. There are plenty of tech companies that sell products that improve people’s lives or are good cost for value. Apple didn’t sell 232 million iPhones last year because people don’t like them or don’t get anything out of them. Laptops are lighter and faster than ever. Hard drives store more data than ever. There are a host of potentially promising clean-energy start-ups that could one day be key players in the fight against climate change.
But there are also tech companies that have enriched themselves at the cost of making other people’s lives considerably worse. Start-up founders often talk about “disrupting” an existing industry through some sort of technological innovation or new computer-based system. Uber and Lyft burned through billions upon billions in venture capital over the last decade while they wiped out taxi-cab companies in major cities around the world. Supplanting them are transitory “gig economy” jobs that lack the stability or income of what they replaced.
Airbnb, which once served as a way to temporarily rent out an extra room or a pied-à-terre, has now grown so large that it’s warping the housing market in some parts of the country. Would-be “real estate entrepreneurs” are gobbling up housing and rental stock in some markets so they can float it as short-term rentals on the popular service for “passive income.” There has been some backlash to this, both in the form of local regulations and customers who are tired of paying exorbitant cleaning fees, but the company shows no real sign of slowing down. [It is jaw dropping how many people think they are going to get wealthy becoming hoteliers in their own homes. That used to be called owning a boarding house and was for desperate widows and often not a well thought of thing to do. Surely this is a fad that will eventually pass in favor of more attractive lodgings such as an equally priced resort perhaps?]
I could go on and on. There is widespread skepticism (at best) of companies from both the political left and the political right for, respectively, facilitating and censoring extremist content on their services. People are not generally thrilled that their personal information is being bought and sold like other commodities. Cryptocurrencies did not begin as a Silicon Valley gewgaw but quickly became one of its industry’s obsessions. They made a few people tremendously wealthy at the cost of a great many marks, rubes, and bag holders.
It is also hard not to be a little resentful of Silicon Valley’s immense wealth if you live in the shadow of it. California’s housing crisis is now legendary for its scope and scale. But it has also spread outside the Golden State’s borders to drive up property prices and rent well beyond what neighboring states’ residents can often afford. Families and longtime residents have been priced out of their communities in Arizona, Idaho, Nevada, and elsewhere in the Mountain West. The first and most believable villain on the popular TV show Yellowstone was a California real estate developer.
And then there is Silicon Valley’s culture—hyperlibertarian, hypercapitalist, and hyper-self-confident. Government regulations are something to be avoided or ignored. Unions are verboten. Those who create companies are referred to as “founders” with an added touch of reverence, like America’s Founding Fathers or the villains from Star Trek: Deep Space Nine. When they create a new company, it is described as “building” in the same tone that one might use for a cathedral. Silicon Valley is deeply in love with itself, which partly explains why the mundane task of parking your cash at a bank turned into a status symbol at SVB.
It does not help that the golden boy of the Bay Area over the last year or so has been Elon Musk. Over the past year, the Tesla and SpaceX CEO has purchased Twitter, summarily fired most of its workforce, and then driven it into the ground. Since it is no longer a public company, Musk is not required to publicly disclose its financial health. But we can draw some reasonable inferences from the fact that he is trying to rapidly monetize nearly every aspect of the user experience and, perhaps more ominously, has skipped paying rent and Amazon Web Services hosting fees at various times in recent months.
Silicon Valley’s leadership caste has not looked askance at his scorched-earth approach to Twitter’s workers, his weird musings on “wokeness,” or even his public firing-mocking of a disabled Twitter employee last week. (Musk, perhaps after finally answering his lawyers’ calls, reversed course on the last one.) Other “founders” have found it inspiring and sought to emulate it. In sum: This is not a culture that respects either its workers or its neighbors, and they should not be surprised when workers and neighbors don’t respect it in turn. “
I tell you, some of the best and toughest investigative reporters are female. Miranda Devine. Julie Kelly. Catherine Engelbrecht. Tracy Beanz. Sharyl Attkisson.
AND the people who can hardly afford to buy eggs for breakfast get to bail the lefty billionaires out...
Eff ‘em...
In sum: This is not a culture that respects either its workers or its neighbors, and they should not be surprised when workers and neighbors don’t respect it in turn. “
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