There needs to be "solid" banks that only focus on a particular function (making loans to ONE MARKET, being experts in that market, etc...) Banks acting like "hedge funds", risking everybody's money without really being transparent about it, while paying out a fraction of a percent in interest to depositors, putting the stability of the entire financial system at risk, is NOT a good foundation for American business... "Hedge fund" banks need to be specifically labeled such, and "traditional only" banks need to exist...
Shame on the VC lemmings with zero understanding of banking financials that led us to this point. Your stupidity has crushed an important 40 year old institution and countless jobs. The fact that you people are begging the government for a bailout really shows that you haven’t taken a single look at the SVB financials / mid quarterly update with any real understanding.
@@rubearch24 : I probably understand it better than you do and I do hope that depositors get their money back to keep the payrolls and other things running. All I am doing is calling out Chamath, who went on CNBC and famously quoted: Let em get wiped out. Covid was not their fault either just like in this situation. Chamath was tone deaf that time
The government should not get involved! The government cannot afford any debt! Now that it effects them, they are saying the government needs to get involved immediately.
The regulations that were there to prevent this were repealed in 2018 by the anti-Regulation Republicans. The problem isn't the regulators, it's the politicians that repealed the regulations at the behest of the banks.
The cherry on top is that David Oliver Sacks funded the campaigns of DeSantis and Royce. As Representatives they both voted to change the definition of a bank being "too big to fail" from $50b to $250b, which resulted in massively diminishing the regulators' authority to regulate SVB.
This was the episode that finally broke the fourth wall. All the besties are shilling a for big bailout now, only when it happens right on their property line.
Chamath, a few short years ago: "Those are the rules of the game. That's right. Because these are the people that purport to be the most sophisticated investors in the world, they deserve to get wiped out."
Yep sacks is big time libertarian against taxes and regulations but then wets his panties when it turns out he’s out in the deep water. Every one knows 250,000 is the FDIC limit and know saying government should cover 25M.
Yeah same here. The fella’s with a lot of knowledge around this. I created a video on SVB collapse but be interesting to hear what these guys have to say.
Can someone please make a compilation of all of these guys holding the exact opposite position on government intervention when the party at risk isn't themselves. They need to watch this and actually let it sink in.
To suggest that "the public" should bail this bank out (as if we have a choice in the matter) is completely tone deaf and is why people are sick of institutions of all stripes, including VC. Yes, I understand the arguments for the bail out, but it's the wrong thing to do. It needs to fail, even the depositors if needed.
How are you unable to understand that the bank was not bailed out? The Feds step in, pay the liabilities (depositors) and take the assets without having to liquidate them and realize a loss. The feds then get full value on maturity. The cost to taxpayers is zero. Zilch. The bank goes under. Bank executives lose their jobs, and all bank stock holders lose ALL their money. How do you not understand this?
@@1donjuego I'm sorry you don't understand the simple concept of opportunity cost, and I'm sorry you believe the broken window fallacy. Where do you think the money from FDIC insurance comes from? Why do you think there was a limit? Why didn't the depositors understand the $250k limit?
@@riongull he thinks money is "free". Whether through taxation, or through inflation, one way or the other, the taxpayers will suffer. They printed billions of dollars during the pandemic, raised interest rates to cool down an overheated economy, and then proceeds to bailing out the bank when the bank suffered from the interest rate policy (bond devaluation). Ultimately, taxpayers WILL have to pay for this, even if it's separated by several degrees of separation.
It's comforting to see the overwhelming amount of comments calling out these guys bullshit. Sanders is right "Socialism for the rich, raw capitalism for everyone else." How the hell they can't see their own hypocrisy is gross. By your own views expressed here in every previous conversation, you guys knew the risks, you took them - end of story.
So according to jcal, the government should bail out a VC capital that went under with SVB because the government might see some return on that investment in a long enough timeline. But the government should not: forgive student loan debt forgive medical debt Because there is no return on investment for poor people?
This podcast is public service. These are busy, successful men with families that volunteer their time, somewhat reluctantly, to educate and share perspectives. They cannot be thanked enough. ❤
Sacks, of all people, citing Moody's A rating on SVB to rationalize bailouts for billionaire money management laziness has got to be the headline meme of this cycle. He out did O'Learys "Sam Bankfraud is a good kid"
Majority of startups are not profitable. Their deposits into SVB were not from profits, but was cash received as investments from VC's like JCal and Sacks. These guys were not screaming for the "average business owner" to be saved. They were 100% looking to save their own investments being held in SVB. Explains their hysteria on twitter.
I have a different take on this whole SVB collapse saga. As tech startups cash burn rate accelerates during these uncertain times, a preemptive Venture Capitalists engineered panic (pulling out massive amounts creating a bank run) to 'get out' and transfer their investment risk burdens onto US Tax payers by forcing US Govt. intervention for a Tax Payer funded bailout, similar to how US defense industry is being bailed out now with hundreds of billions of Tax Payer wealth by Democrat/Republican politicians in banning any peace negotiations (in the interim) and prolonging the Ukraine conflict.
Friedberg's largest concern is the national debt (until now). Sacks wants smaller government - less interference in private markets (until now). Chamath says let the entire airline industry go away - government can not afford more bailouts (until now). All In Hypocrisy
During the discussion of the PPP loans, anyone else remember Chamath saying these companies should get no support and they should have been prepared for a global pandemic and lockdowns? Funny how he’s so much more forgiving to Silicon Valley companies. I was hoping Chamath would keep to his principled take from just 3 years ago, and I’m disappointed in him.
@@James-mk8jp The problem with a bail out is bad behavior is rewarded. Their are no lessons learned, if there are no dire consequences. However….all of our opinions will flip if the bank contagion cascades to OUR bank account !
He did say SVB and its shareholders can lose everything and that's ok. However depositors are not investors- this is literally their money that they've put there to use as a checking account- it's those people who should be made whole. He's not suggesting a bailout for the bank.
@@yuppers1 uninsured depositors are now investors, they are creditors of the bank. Never leave money in banks uninsured if you can’t afford to lose it. Banking is a for profit venture. What’s the point of the deposit insurance fund if you just bail out all the uninsured depositors.
@@zx0VY What about all the victims that made deposits in the crypto banks like Block-fi, Celsius.. these banked lied to their depositors. and gambled all their money away.. and retail depositors got screwed... no one is coming to save them.. because they are not rich.
@@zx0VY jcal is that you ? No I don't think the event will bankrupt them, and frankly I don't care about some startups. If these were normal investors we would all be saying oh well too bad so sad they made investments that didn't work out. Same should apply here, bunch of try hard VC bros chose a back yard bank and received back yard service, no bail ours for rich white tech bros.
Didn’t chamath say to let the airlines go bankrupt and argue against bailouts during covid? Now the besties want a federal bailout. Federal govt and Brandon bad until you need their help .
Yes. I remember him like Episode 2 of All-in, and then CNBC arguing that the airlines should be allowed to implode and then let the airlines go through bankruptcy to....somehow benefit the employees. I'm not being sarcastic, I just don't remember the mechanisms and arguments he made that the bankruptcy actually helps the employees continue staying employed, because the management gets rebuilt and the debt of the airlines is restructured, so the employees keep working at their jobs.
Yeah everyone loves capitalism for other people and socialism for themselves lmao But in any case, I think the feds are going to let SVB fail and let the chips fall where they may. For better or worse.
That's a completely different situation...the airlines were taking on debt to buy-back their own shares, at the risk of becoming overlevered. These start-ups had money on deposit with a bank. It was the bank's mis-management that caused the crisis, the individual companies did nothing wrong. If SVB were to be bailed out, all that means is that all funds on deposit would be made whole...shareholders of SVB would still be wiped out.
@@nfmosphotos4624 Honest question: Maybe everyone knows in the back of their mind everything carries some small risk, but is a bank run and collapse not a black swan event?
I wonder what they are going to say about the entire VC industry chicken littling themselves into doing a bank run on their own bank and LITTERALLY destroying their own industry! 🤦
@@imSupahman While acknowledging that saying "the sky is falling" is what caused this bank run, Sacks and the others agree that it's better to be selfish, fuck your entire industry, and get your money out first. But that's typical of the current mindset in tech where there is a huge lack of industry leadership and a short sighted selfish motivation.
JCal: "You're bailing out innovation on breast cancer" Same argument could be made on bailing out virtually any bank in the world, no matter what size. Some small startup, some small company, some medical institution, some neighborhood store is performing a function critical to society, while having their bank account in a totally random bank. Do you use taxpayer dollars to bail it out?
It’s not lost on me the irony of a podcast called “all in” glorifying the vice of gambling, losing their minds when this same degeneracy finds its way into banking/finance and the inevitable happens. 😂
No one stepped up to help the depositors in the crypto banks, because they don't care about the little guy getting scammed out of their money.. but rich guys depositing their fund in risky assets, thats fine, they get bailed out.
I understand it's not the fault of startups who are in trouble for having money in SVB. But that's real life - you pay the price for others' greed/errors. These startups also benefited a lot in the past two decades from this entire silicon valley ecosystem. It's time to experience the risk that was hidden (not absent) and not cry foul.
It’s a bank. I see what you’re saying, but you’re being a bit critical. This isn’t a case of retail investors being greedy and expecting 14%+ APY on their cash (i.e. FTX collapse, Luna collapse, etc)… This is otherwise healthy companies who were literally storing US dollars in a bank. Not really fair to say that this is the fault of anyone who participated other than the bank itself and broader macro factors.
@@colinjohnson3526 I know it can be very devastating for entire economy but bailing out everything creates a wrong precedent that leads to unsustainable bubbles in long run. So for greater good in the long term this cleansing is necessary which was bypassed during COVID. Short term pain for long term gain.
Also, a lots of startups got venture debt from this bank so it's fair when the risk materializes to own the losses as well. You can't pocket profits and socialize losses.
Yup. This is the first time I’ve seen Friedberg not even acknowledging the intellectually honest POV. He could have atleast acknowledged he’s biased because of having skin in the game.
> they're poor little depositors! the depositors were the SVB credit recipients. It's like me agreed to lend to myself then spending it all on hookers and asking for a bailout of me because I just spent it all on hookers
If it was a bank of middle class regular people with balances of half a mil to 1 mil they wouldn’t have cared. They would have to take the 250 insurance and bear the loss of the rest.
None of these companies realized that any deposits at the bank above $250,000 were not insured? Obviously not. It is their responsibility to hedge that risk, not the responsibility of the American government/taxpayer.
@@vitigaymer1053 I think the Fed failed to insure that the risk management was adequate but ultimately it is SVB's managers that failed to properly manage the duration of assets and liabilities.
I love this podcast and watch this regularly, but this episode and last weekend reactions on twitter from these podcasters were not 'intellectually honest". :( 1. This discussion was totally one-sided. During Covid people said it would create 'hospital run' and collapse entire healthcare system if we don't shutdown everything, same thing here, they pulled a page from same runback, creating fear of anticipation (from 'bank run') and entire system collapsing if we don't do anything now. 2. It is obvious that everyone distances themself or hides association with robbed bank, just to protect their own business and negative perception it carries about weakness/damage to business. It was hard to believe, no besties had exposure to the largest bank in Silicon Valley, yet they were protecting the bank as if they would lose everything. 3. Noone objectively analyzed situation to understand why it happened and what can be done to prevent it. Instead the focus was very tactical on short term outcomes without any longer term impact. "What will happen if we do this to one bank... (negative side effects)? Better do a retrospective and have honest conversation about it.
We dont have a free market, cronyism capitalism cannot sustain free market, this has been known since the 2008. and now 2020, 2021 with QE, and now 2023, Where have you been ?
@@jz1881 Government intervention absolutely solved the problem 2008 though. The problem was too little too late, there should have been much more regulation in the first place
This episode showed the besties' fundamental misunderstanding of banks and how they operate. Sacks calling for banks to hold all of their deposits in highly liquid assets... He must never want a bank loan again. All of this pod I waited for them to realize that this all happened becausd VCs, their LPs and all of the portfolio companies ran like lemmings off a cliff for almost no reason when if they had stood still, this bank would be doing business as usual today. It's your fault this happened and while you'll get your deposits back (every penny... eventually), billions of dollars of shareholders' equity just got wiped out because you yelled "fire" in a crowded theater. And Friedberg, the pariah of the pod, might be the only one here who understands it and was shut down repeatedly.
What about moral hazard? The game is the game. SVB ran themselves into the ground. The government shouldn't step in here to make everyone whole. Those under the FDIC limit should be made whole per the law and the the remaining assets spread out over the asset holder proportional to their holdings. If you are a company caught up in this time to go get a bridge loan or other financing until SVB settles.
In Satoshi's words: "The root problem with conventional currency is all the trust that's required... Banks must be trusted to hold our money... but they lend it out in waves of credit bubbles with barely a fraction in reserve."
55:15 Chamath is correct, duration matching is 100% possible and is a standard practice for any well managed bank. You guys are missing the core of this story, which is gross mismanagement of SVB. There’s also a tremendous naïveté here where tech bros all decided to be in the same SVB club together and never once asked the question about the safety and security of their banking institution. You guys as VC sponsors should have pushed diversification of banking/treasury management at your portfolio companies. Not saying you should have predicted SVB, but this is finance 101. Sorry.
today I learned that VC’s were graced upon us to solve breast cancer, the climate, just to name a few of their selfless endeavors on behalf of humanity.
So what I'm hearing is evaluating the balance sheet of your bank is beyond the sophistication of the billionaires on this show, your problem is my problem but my problem isn't your problem, and political principles only apply if they benefit you guys--otherwise it's time to get nuanced. I think the country is tired of people like you.
Really hard for me to believe that nobody understood the risks here. A bank agreeing to secure what, billions of dollars of unsecured debt to startups in a market where startups are in the most danger. What could go wrong?
SVB was technically insolvent and practically illiquid since Q4 last year. What is a corrupt system - if you manage hundreds of millions and get wiped out because you cannot read a bank balance sheet, but then though political connections you get "reset".
I'm a retired CPA/CBA and bank examiner of 35+ years. You fellows have no idea the level of contempt bank management/employees have for regulators, no idea of the 'cat and mouse games' played by bank management to out-wit regulators. It's a tradition that at the end of the day causes pain for some groups of people. Those "people" typically don't distribute deposits across multiple institutions. Like all law enforcement authorities, white-collar criminals don't like forensic investigators and work hard to thwart them.
They're well aware. They keep profits when they win. They want you to bail them out when they lose. And they'll virtue signal all day about working people losing their jobs etc. A healthy economy is what we get when these guys take their losses.
@Kevin Weber oh they can all be asses at times including chamathe... but I still like them. How may friends or family members do you have that are asses ? We all have at least one .
Please let the market run its course on the thousand of worthless silicon valley startups that wouldn't have existed without the excess of free money. That includes founders, and employees alike making an obscene amount of money in selling worthless products while in normal market conditions they would be employed at 50k top. Enough with the government picking winners and losers and drugging the economy for the regular guy (99.999%) of population. The worthwhile ideas and products will survive just fine.
SIVB does not need a bailout for depositors, depositors are FDIC insured up to $250k, therefore the little-man is covered. Sack's wants a taxpayer bailout for companies that neglected to do proper risk management (distributing their capital among multiple banks). Had these companies distributed their cash up they would have been able to absorb the loss, it still would have stung, but at least they wouldn't have gone out of business. This was one of the only podcasts I did not enjoy. It definitely felt like a plea to save your own money/industries near-term future.
TARP was used for viable companies. We can't throw good money after bad. Many of these companies were a product of ZIRP and would fail without the additional headwinds presented. A comparison to TARP bailouts is not supported by the data, as many of these companies are pre‐profit and based on a hope and a prayer.
I watched this when it right came out and came back now to check out the comments. Very encouraging to see most people see the blatant hypocrisy of the hosts here.
Thanks for the great content guys. Interesting takes. However, what you guys are essentially advocating for is 100% federal guarantee of all deposits. If you're going to recommend it for SVB you have to recommmended it for all banks not just well connected ones with prominent clients. I can't see that being realistic unless you have a massive increase in regulation, which let's not kid ourselves, will be fought tooth and nail by the industry and attacked as "big goverment overreach/socialism/communism" by the politcal right and overall business community. In my opinion you go to the VC community and get them to fill the majority of the hole in SVB's balance sheet and/or front the immediately liquidity needs of their portfolio companies, as it's their company's that are most at risk. They're needs to be market risk to them and if it means they can't support 3 or 4 new venture companies, which in all likelyhood will not be successful companies in the long run anyway, and they have poor returns for LP investors in certain funds, so be it.
No bailout, capitalism requires these clearing events. if these are the smart people that they think they are they will be able to figure it out over time. But asset bubbles need to pop and this is one massive one that popped really quickly.
Most interesting part is 60min, Jcal hits on the real question that VCs who want the bailout don’t want to acknowledge. Lots of value at risk, tons of upside. The folks who would be bailed out are really the VCs who didn’t have their companies ready for a risk like this. Make accounts whole and take warrants diluting the VCs, otherwise VCs make up the shortfall. This isn’t being discussed enough. Small returns on holding treasuries no one wants isn’t worth, go for the real gold.
I think "the boys" have already had their say. Just because they claim to want to support breast cancer, doesn't make them contributors to equality. They probably fund more to prostate research under the hood
@@fredwinslow744 he didn't say which one exactly but it much have been 2022 December or 2023 January - that's when short positions on SVB started to rise.
Media: “This wasn’t a black swan. Concentrating all the risk in one industry, and having funding and the backstop to funding all have money in same institution. This was just dumb, and they should go out of business”
That's the most pathetic part about this. That these guys are so full of themselves that they thought they saw something the government didn't. The idea that these tweets impacted the FDIC in any way is a delusion of grandeur. The only thing it impacted was contagion, positively.
If this is a deal to consider for taxpayers, why won't the VCs step in and provide the backstop? If you're providing a backstop for deposits you are not getting equity. You're providing a loan. This MTM loophole is used everywhere, look at Citadels balance sheet. Hold the right people accountable 1.Risk officers at SVB , 2. Regulators. Sell the assets, depositors get what's left. VCs can fund the difference.
everything this pod has done over the last 3 years was just negated with this episode… The amount of hypocrisy people have when their money is on the line is outstanding
Back in the old days, communities and industries never allowed themselves to be too highly concentrated in one bank. This problem has been building up for decades and has contributed to the Silicon Valley frat boy swagger. SVB was a club, not a bank, that catered to it's depositors. To claim that depositors didn't know the risk is ridiculous, they have been skirting banking laws for a long time in order to create exclusivity over valuation models controlled by a few, for the benefit of a few. Five years from now, the industry will be much healthier with this SVB failure.
Interesting take Sacks. Every individual actor has to do what's in their best interest, but we aren't trying to start another run.... That is exactly what starts another run is everyone worrying about themselves. You're essentially the old guy in Its a wonderful life asking for his full $242.
There is no minimal risk for contagion considering this banks client base and exposure to treasuries. Most of the other banks have a diverse selection of depositors not just tech
He isn’t asking for bank bailout. People and companies that put deposited money in the bank needs to get their money back. Big difference. OR would you rather bail out GM and not depositors?
To say I'm disappointed in these 4 is an understatement. The level of hypocrisy being expoused here is monumental. These 4 were beating the drum for Powell to get inflation under control with the only tool in his arsenal which was to raise rates and trigger a recession where people LOSE their jobs. Now all of a sudden since its their industry, their people who will lose their jobs, all of a sudden its "a lost decade of innovation" and "a Lehman event" if overpaid underperforming tech companies and their employees lose their jobs is just embarrassing. You see who really holds their beliefs when the SHTF and how they stand. Sacks is on Twitter multiple times begrudging government bailouts, but now its his chips, and he's 180. We knew Chamath had no morals, but Friedberg, really? This is the moment you look at these guys and you realize while they are all brilliant in their own right, they are also the most susceptible to fear and hypocrisy than everyone else. Utterly pathetic display fellas. We went ALL-IN together and it turns out none of you had the nuts.
One week Jason opines on the best duck in Sonoma. Next week he’s making the case for a complete bailout of venture capitalists caught in the SVB collapse. Unreal. Let them eat duck!
I am surprised there is a new episode today, but I was praying for it😇......I can't imagine a better place to go for some inside information! Thanks to all of you for sharing your time and knowledge.
There is no way they should be bailed out. No one is to big to fail. Healthy economies need success and failure. The corruption of the last economic crisis bail out should never be repeated. Let them fail let them learn.
There’s so much confusion around this topic. Most people are not calling for investor by outs. There calling for depositor by outs. So imaging your bank going out of business becouse they miss managed the money. In this case you lose your money and the banks investors lose there money. What these guys are arguing is let the bank investors lose there money but the people who just stored there money in this bank should get there money back. Not just ethically but becouse if customers of banks can lose there money all bank customers will go to the 4 larges banks only effectively creating a giant monopoly in banking that will have negative effects not just on investors in that one bank and customers in that one bank. But it would cause harm to customers of all banks. Investors in all small banks and only benefit investors in the 4 large banks. There advocating for the government to support customers of the bank not the investors. It is a bit hypocritical for especially sacks to be so pro government stepping in especially becouse he wants big government intervention on a very short time frame from very few powerful individuals with no oversite. Typically he would advocate against that but hopefully he will learn from this and understand why regulation and government intervention can be a useful tool that has positive effects if used right. But none of them called for a bailout of the investors.
I am not in the tech space nor particularly educated in the banking sector, but suggesting the little guy, which really in this case are portfolio companies they are invested in, must have Bail outs for the sake of continuing innovation and benefit to humanity seems weak. Why would banks ever change their policy if they are going to just receive Bail outs? Isn't this inherently anti capitalistic to just rinse and repeat this process every boom and bust? Would appreciate some input as I dont fully understand this space.
It's unadulterated hypocrisy from the entire cast. Shows you what they really feel about themselves and their kind. Sacks talks incessantly about the elite, but when its regular Joe Schmoes losing their jobs working blue collar industry, its okay they lose their jobs and homes. Yet, when its silicon valley technocrats, oh noo we're the center of innovation, bail us out please. Overall disgusting display here.
It's the same principle as the one that safeguards my deposits in my bank. I thought they were very clear that clients/depositors should get their money, even if it requires government support. Investors in the bank and holding company should come next, probably so many cents/dollar. The managers, c-level execs, eg those who made the faulty decisions should nothing in terms of a bailout.
@@raymondadkins9130 I’m not saying don’t help them. I am saying why do rich people pick and choose. They were so against the student loan forgiveness for regular folks. Just like students chose to go get higher education and risk debt, those employees chose to work for higher risk start ups for a better future payout. Both made a logical choice. Both cases are innocent and did nothing wrong. I just don’t like the bias towards their Silicon Valley peers. They only care about their own. I think students who get shoved into immense debt before they can legally drink are way more innocent than adults who made a conscious choice to work for startups and collect those fat Silicon Valley cheques.
@@raymondadkins9130 it’s your choice who you decide to work for though isn’t it. You choose to work for a risky start up whose founder would store all their eggs in a fancy basket. You decided to collect those nice startup cheques and equity. Working for startups always comes with a risk. Taking out debt for school comes with a risk. Same difference
This isn’t even close to a “Black Swan” event as described by Nicholas Talib and every time I see it referred to as such I realize how shallow and specious most commentary is these days. This is a run of the mill regional bank run being blown out of proportion by the current rent seekers of a Federal investor bailout who helped fuel it. Caused by entirely predictable events. I guess 7 months without a head of Risk Management is unusual, but it is not unprecedented.
You work for 40yrs to have $1m in your retirement, meanwhile some people are putting just $10k in a meme coin for just few months and now they are multimillionaires, all thanks to Mrs Jane, God bless you ma
Remember , mark to market was the norm prior to 2008. Removing this requirement was what helped stopped the collapse and has helped the continuation of progress
These guys keep saying that nobody did anything wrong but they did. They left millions of dollars in banks uninsured. Banking is a for profit business just like the tech co’s and VC’s. If you are a depositor and you are over your insurance limits, if something happens, you become a creditor of the bank. I’m not sure how these Stanford MBA’s have not figured this out, especially after the financial crisis.
Fuck a bail out. These guys did a great job at making a case for why we should all bail out their buddies. SV had an oopsie and now we're all supposed to pay for it - you think when that happens anybody will lose their bonuses or go to jail? Psh
The whole, "small part benefits the whole" argument kinda falls on deaf ears when these guys didn't support student loan forgiveness because the same argument there can be said. Also, they're really reaching when they say things like, if "small" tech isn't bailed out we're gonna be set back ten years of innovation for breast cancer research.
You arent bailing out innovation or tech or salaries, you are just bailing out rich LPs and VC money. VC's exacerbated this run, so If these funds really want these companies to continue, then the LPs and VC will step up and fund those that should survive. If it's 80 cents on the dollar, the LPs only need to fund the difference. The US Tax payer doesnt benefit from a bank bailout here. We should either systematically raise the FDIC limit, or not touch it
Just a bunch of whiny elites crying for the government to bail them out after their bank took zero precautions for interest rate hikes. This episode makes me more angry the more time goes on and the way it all played out.
PRODUCER'S NOTE: the zoom video feed went the way of SVB this week - sorry besties! all charts and graphics are still included.
Tanx for upload, we been waiting 🙌
There needs to be "solid" banks that only focus on a particular function (making loans to ONE MARKET, being experts in that market, etc...) Banks acting like "hedge funds", risking everybody's money without really being transparent about it, while paying out a fraction of a percent in interest to depositors, putting the stability of the entire financial system at risk, is NOT a good foundation for American business...
"Hedge fund" banks need to be specifically labeled such, and "traditional only" banks need to exist...
Shame on the VC lemmings with zero understanding of banking financials that led us to this point. Your stupidity has crushed an important 40 year old institution and countless jobs. The fact that you people are begging the government for a bailout really shows that you haven’t taken a single look at the SVB financials / mid quarterly update with any real understanding.
Came to the comments for this explanation haha. No problem!
One question, don't the besties all do local Quicktime recordings the way TWIST hosts do?
Well this is the last All In Pod I watch. Principled characters until it touches their portfolio.
Chamath in 2020 (Covid Crisis): "Who Cares? Let 'Em Get Wiped Out" ;
Chamath in 2023 (when it impacts VC community): Fed should step in and save us.
I don’t think you understand the repercussions
@@rubearch24 : I probably understand it better than you do and I do hope that depositors get their money back to keep the payrolls and other things running. All I am doing is calling out Chamath, who went on CNBC and famously quoted: Let em get wiped out. Covid was not their fault either just like in this situation. Chamath was tone deaf that time
Vcs are bunch of soulless cowards!! He said in standford interview 😂
The government should not get involved! The government cannot afford any debt!
Now that it effects them, they are saying the government needs to get involved immediately.
These 4 are balls deep in svb hence the hypocrisy
22:16 David Sacks blames the regulators for the bankers making bad choices.
Truly breathtaking.
The only free agency that is to blame is the government's. Of course! Sacks and his ilk are mean, un-serious people.
The regulations that were there to prevent this were repealed in 2018 by the anti-Regulation Republicans. The problem isn't the regulators, it's the politicians that repealed the regulations at the behest of the banks.
th-cam.com/video/7VAbifiDg-Q/w-d-xo.html
Oligarchs always, always blame someone or something when it's THEIR wealth on the line.
The cherry on top is that David Oliver Sacks funded the campaigns of DeSantis and Royce. As Representatives they both voted to change the definition of a bank being "too big to fail" from $50b to $250b, which resulted in massively diminishing the regulators' authority to regulate SVB.
This was the episode that finally broke the fourth wall. All the besties are shilling a for big bailout now, only when it happens right on their property line.
th-cam.com/video/7VAbifiDg-Q/w-d-xo.html
I don't like them anymore...
free market, free market.... and now wat?
They should not have posted this episode. They could’ve hid their true faces but their true colors show when their money is at risk
Bunch of hypocrites
Oligarch is as Oligarch does
Chamath, a few short years ago: "Those are the rules of the game. That's right. Because these are the people that purport to be the most sophisticated investors in the world, they deserve to get wiped out."
Source?
@@riongull th-cam.com/video/HuepiJcMKoQ/w-d-xo.html
@@tlueddek Thank you!
Lol, the 180 in principles now that his friends are involved is hilarious.
@@riongull Dude, just TH-cam it, it's out ther.
@@12801270able lol, chill, I wasn’t doubting him. I just didn’t want to have to do the search, which he graciously did for me.
David sacks calling for his stimmy check is a fun vibe
I know, right? Gimme a break. These guys are rich af and are panicking. "Small tech" my ass.
Then Sacks didn’t admit to having 45million at the bank until Chamath pulled that sheet out.
Yep sacks is big time libertarian against taxes and regulations but then wets his panties when it turns out he’s out in the deep water. Every one knows 250,000 is the FDIC limit and know saying government should cover 25M.
Funny how these guys don't like socialism until when the rich are in trouble ;-)
@@wesleypersad2295 Do you know where the sheet can be found?
Sacks: “we opensourced our deposits to the banks, and they’ve just gone crazy with them”
Should have chosen a safer bank.
"opensourced" ..like open AI ...
To say I couldn't wait for this episode would be an understatement.
💯
+1
Fr
Yeah same here. The fella’s with a lot of knowledge around this. I created a video on SVB collapse but be interesting to hear what these guys have to say.
Damm..tot u guys won't show up this weekend
The worst people, the absolute worst people, are those who only think about fairness after “unfairness” happens to them.
100%
Can someone please make a compilation of all of these guys holding the exact opposite position on government intervention when the party at risk isn't themselves. They need to watch this and actually let it sink in.
Yes. Please.
To suggest that "the public" should bail this bank out (as if we have a choice in the matter) is completely tone deaf and is why people are sick of institutions of all stripes, including VC. Yes, I understand the arguments for the bail out, but it's the wrong thing to do. It needs to fail, even the depositors if needed.
th-cam.com/video/7VAbifiDg-Q/w-d-xo.html
How are you unable to understand that the bank was not bailed out? The Feds step in, pay the liabilities (depositors) and take the assets without having to liquidate them and realize a loss. The feds then get full value on maturity. The cost to taxpayers is zero. Zilch. The bank goes under. Bank executives lose their jobs, and all bank stock holders lose ALL their money. How do you not understand this?
@@1donjuego I'm sorry you don't understand the simple concept of opportunity cost, and I'm sorry you believe the broken window fallacy. Where do you think the money from FDIC insurance comes from? Why do you think there was a limit? Why didn't the depositors understand the $250k limit?
@@riongull he thinks money is "free". Whether through taxation, or through inflation, one way or the other, the taxpayers will suffer. They printed billions of dollars during the pandemic, raised interest rates to cool down an overheated economy, and then proceeds to bailing out the bank when the bank suffered from the interest rate policy (bond devaluation).
Ultimately, taxpayers WILL have to pay for this, even if it's separated by several degrees of separation.
@@Sajid7x7 exactly right.
It's comforting to see the overwhelming amount of comments calling out these guys bullshit. Sanders is right "Socialism for the rich, raw capitalism for everyone else."
How the hell they can't see their own hypocrisy is gross. By your own views expressed here in every previous conversation, you guys knew the risks, you took them - end of story.
So according to jcal, the government should bail out a VC capital that went under with SVB because the government might see some return on that investment in a long enough timeline.
But the government should not:
forgive student loan debt
forgive medical debt
Because there is no return on investment for poor people?
No that would lead to more inflation😂 if I remember correctly
This podcast is public service.
These are busy, successful men with families that volunteer their time, somewhat reluctantly, to educate and share perspectives. They cannot be thanked enough. ❤
Yes, but relax. They know how powerful this podcast is and it’s free marketing for them.
Let’s not act like they’re Gandhi.
Really stretching that 'volunteer'😆
ROFL... you are a clown
@@Captdeets ofcourse he is. The three of them are billionaires whereas he is not.
Sacks, of all people, citing Moody's A rating on SVB to rationalize bailouts for billionaire money management laziness has got to be the headline meme of this cycle. He out did O'Learys "Sam Bankfraud is a good kid"
Majority of startups are not profitable. Their deposits into SVB were not from profits, but was cash received as investments from VC's like JCal and Sacks. These guys were not screaming for the "average business owner" to be saved. They were 100% looking to save their own investments being held in SVB. Explains their hysteria on twitter.
So weird that when your personal interests are at stake, all of a sudden “government PLEASE come help”. Damn.
This must be their most awaited episode ever.
and most hypocritical... specially Sacks
@@aynrandish9106 Is that supposed to be impressive?
Most awaited episode ever? Did you want to learn how rich guys beg for a government bailout? Listen again and take notes.
I have a different take on this whole SVB collapse saga.
As tech startups cash burn rate accelerates during these uncertain times, a preemptive Venture Capitalists engineered panic (pulling out massive amounts creating a bank run) to 'get out' and transfer their investment risk burdens onto US Tax payers by forcing US Govt. intervention for a Tax Payer funded bailout, similar to how US defense industry is being bailed out now with hundreds of billions of Tax Payer wealth by Democrat/Republican politicians in banning any peace negotiations (in the interim) and prolonging the Ukraine conflict.
Friedberg's largest concern is the national debt (until now).
Sacks wants smaller government - less interference in private markets (until now).
Chamath says let the entire airline industry go away - government can not afford more bailouts (until now).
All In Hypocrisy
Well said
All in GRIFT
During the discussion of the PPP loans, anyone else remember Chamath saying these companies should get no support and they should have been prepared for a global pandemic and lockdowns? Funny how he’s so much more forgiving to Silicon Valley companies. I was hoping Chamath would keep to his principled take from just 3 years ago, and I’m disappointed in him.
Everyone is cavalier with other-peoples-money!
You must be new to Chamath
@@James-mk8jp
The problem with a bail out is bad behavior is rewarded. Their are no lessons learned, if there are no dire consequences.
However….all of our opinions will flip if the bank contagion cascades to OUR bank account !
He did say SVB and its shareholders can lose everything and that's ok. However depositors are not investors- this is literally their money that they've put there to use as a checking account- it's those people who should be made whole. He's not suggesting a bailout for the bank.
@@yuppers1 uninsured depositors are now investors, they are creditors of the bank. Never leave money in banks uninsured if you can’t afford to lose it. Banking is a for profit venture. What’s the point of the deposit insurance fund if you just bail out all the uninsured depositors.
This is gold. Billionaires crying for uncle Sam to come save them.
@@zx0VY What about all the victims that made deposits in the crypto banks like Block-fi, Celsius.. these banked lied to their depositors. and gambled all their money away.. and retail depositors got screwed... no one is coming to save them.. because they are not rich.
Especially because they are not a single woman in the room!
@@zx0VY jcal is that you ?
No I don't think the event will bankrupt them, and frankly I don't care about some startups.
If these were normal investors we would all be saying oh well too bad so sad they made investments that didn't work out.
Same should apply here, bunch of try hard VC bros chose a back yard bank and received back yard service, no bail ours for rich white tech bros.
Silicon Valley is only good for the country if they go the speed limit. Getting in a wreck is the price of poor judgement.
@@zx0VY yeah imagine if disruptive innovators like Juicero were dragged down by this
that comment at the end about crypto aged like milk, btc went up 30% since Mar 12th
Didn’t chamath say to let the airlines go bankrupt and argue against bailouts during covid? Now the besties want a federal bailout. Federal govt and Brandon bad until you need their help .
Yes. I remember him like Episode 2 of All-in, and then CNBC arguing that the airlines should be allowed to implode and then let the airlines go through bankruptcy to....somehow benefit the employees.
I'm not being sarcastic, I just don't remember the mechanisms and arguments he made that the bankruptcy actually helps the employees continue staying employed, because the management gets rebuilt and the debt of the airlines is restructured, so the employees keep working at their jobs.
Yeah everyone loves capitalism for other people and socialism for themselves lmao
But in any case, I think the feds are going to let SVB fail and let the chips fall where they may. For better or worse.
@@wilee.coyote5298 that’s a good question. Why doesn’t the sec investigate Thiel?
That's a completely different situation...the airlines were taking on debt to buy-back their own shares, at the risk of becoming overlevered. These start-ups had money on deposit with a bank. It was the bank's mis-management that caused the crisis, the individual companies did nothing wrong. If SVB were to be bailed out, all that means is that all funds on deposit would be made whole...shareholders of SVB would still be wiped out.
@@nfmosphotos4624 Honest question: Maybe everyone knows in the back of their mind everything carries some small risk, but is a bank run and collapse not a black swan event?
I wonder what they are going to say about the entire VC industry chicken littling themselves into doing a bank run on their own bank and LITTERALLY destroying their own industry! 🤦
Lol that is a good take
cant watch the whole thing, did they touch on this point
Cool-Aid dried up so they turned off the music. Now let's see who got a chair and who didn't.
@@imSupahman While acknowledging that saying "the sky is falling" is what caused this bank run, Sacks and the others agree that it's better to be selfish, fuck your entire industry, and get your money out first. But that's typical of the current mindset in tech where there is a huge lack of industry leadership and a short sighted selfish motivation.
They really didnt emphasize the role that vc's played in creating this run on the bank.
JCal: "You're bailing out innovation on breast cancer"
Same argument could be made on bailing out virtually any bank in the world, no matter what size. Some small startup, some small company, some medical institution, some neighborhood store is performing a function critical to society, while having their bank account in a totally random bank. Do you use taxpayer dollars to bail it out?
The time when ALL IN showed their true colors. “Who cares let them get wiped out”…. Unless it happens to me
It’s not lost on me the irony of a podcast called “all in” glorifying the vice of gambling, losing their minds when this same degeneracy finds its way into banking/finance and the inevitable happens. 😂
No one stepped up to help the depositors in the crypto banks, because they don't care about the little guy getting scammed out of their money.. but rich guys depositing their fund in risky assets, thats fine, they get bailed out.
heads they win, tails we lose
@@ZupE891 nice point.
Savage.
@@ZupE891th-cam.com/video/7VAbifiDg-Q/w-d-xo.html
I understand it's not the fault of startups who are in trouble for having money in SVB. But that's real life - you pay the price for others' greed/errors. These startups also benefited a lot in the past two decades from this entire silicon valley ecosystem. It's time to experience the risk that was hidden (not absent) and not cry foul.
It’s a bank. I see what you’re saying, but you’re being a bit critical. This isn’t a case of retail investors being greedy and expecting 14%+ APY on their cash (i.e. FTX collapse, Luna collapse, etc)… This is otherwise healthy companies who were literally storing US dollars in a bank. Not really fair to say that this is the fault of anyone who participated other than the bank itself and broader macro factors.
@@parker5548 I don't think it's their fault. But risk is always there and that's life.
@@colinjohnson3526 I know it can be very devastating for entire economy but bailing out everything creates a wrong precedent that leads to unsustainable bubbles in long run. So for greater good in the long term this cleansing is necessary which was bypassed during COVID. Short term pain for long term gain.
@@AmolGharat I agree, but if this is the level of "risk" that you deem open to scrutiny, then we should just opt out of capitalism
Also, a lots of startups got venture debt from this bank so it's fair when the risk materializes to own the losses as well. You can't pocket profits and socialize losses.
Funny how Chamath showed more empathy to bankers at SVB than Uighurs.
It’s funny cause last week friedberg said why do we always ask for regulations or regulators to save us when we’re in trouble and today look
Honestly shameless.
Yup. This is the first time I’ve seen Friedberg not even acknowledging the intellectually honest POV. He could have atleast acknowledged he’s biased because of having skin in the game.
Disappointed in Sach that he thinks we should bail out his tech friends...
Agree too
> they're poor little depositors!
the depositors were the SVB credit recipients. It's like me agreed to lend to myself then spending it all on hookers and asking for a bailout of me because I just spent it all on hookers
If it was a bank of middle class regular people with balances of half a mil to 1 mil they wouldn’t have cared. They would have to take the 250 insurance and bear the loss of the rest.
The besties get bailed out but get so up in arms over student loan debt 😂
100%
Do you have the link to the video of that? I want to watch it
A bailout for me but not for thee 😂😂😂
None of these companies realized that any deposits at the bank above $250,000 were not insured? Obviously not. It is their responsibility to hedge that risk, not the responsibility of the American government/taxpayer.
This will be the second to last episode of this show that I watch
Rich people when their money is at risk. "FED please save me!" The rest of the time. "Taxation is theft and regulation is anti business".
100%
Fed Policy for the past decade is the biggest factor for SVB crashing out.
@@vitigaymer1053 I think the Fed failed to insure that the risk management was adequate but ultimately it is SVB's managers that failed to properly manage the duration of assets and liabilities.
I love this podcast and watch this regularly, but this episode and last weekend reactions on twitter from these podcasters were not 'intellectually honest". :(
1. This discussion was totally one-sided. During Covid people said it would create 'hospital run' and collapse entire healthcare system if we don't shutdown everything, same thing here, they pulled a page from same runback, creating fear of anticipation (from 'bank run') and entire system collapsing if we don't do anything now.
2. It is obvious that everyone distances themself or hides association with robbed bank, just to protect their own business and negative perception it carries about weakness/damage to business. It was hard to believe, no besties had exposure to the largest bank in Silicon Valley, yet they were protecting the bank as if they would lose everything.
3. Noone objectively analyzed situation to understand why it happened and what can be done to prevent it. Instead the focus was very tactical on short term outcomes without any longer term impact. "What will happen if we do this to one bank... (negative side effects)?
Better do a retrospective and have honest conversation about it.
I can't believe I would live to see these guys call for a government intervention in a "free market"
Yes, the broad call for intervention was over the top and very self serving. Also disappointed.
Government Intervention does not solve the problem, it makes it worse like 2008. VC and other market particpants must learn how to manage their risk.
We dont have a free market, cronyism capitalism cannot sustain free market, this has been known since the 2008. and now 2020, 2021 with QE, and now 2023, Where have you been ?
As soon as things get rough, they always call
@@jz1881 Government intervention absolutely solved the problem 2008 though. The problem was too little too late, there should have been much more regulation in the first place
This episode showed the besties' fundamental misunderstanding of banks and how they operate. Sacks calling for banks to hold all of their deposits in highly liquid assets... He must never want a bank loan again. All of this pod I waited for them to realize that this all happened becausd VCs, their LPs and all of the portfolio companies ran like lemmings off a cliff for almost no reason when if they had stood still, this bank would be doing business as usual today. It's your fault this happened and while you'll get your deposits back (every penny... eventually), billions of dollars of shareholders' equity just got wiped out because you yelled "fire" in a crowded theater. And Friedberg, the pariah of the pod, might be the only one here who understands it and was shut down repeatedly.
Socialise the risk. Capitalise the reward
Don’t regulate me when I’m feasting
Please regulate me so I won’t starve
RIP Libertarianism on all in podcast
What about moral hazard? The game is the game. SVB ran themselves into the ground. The government shouldn't step in here to make everyone whole. Those under the FDIC limit should be made whole per the law and the the remaining assets spread out over the asset holder proportional to their holdings. If you are a company caught up in this time to go get a bridge loan or other financing until SVB settles.
Fake money chasing fake money they get burned and tax payers should bail them out lol.
In Satoshi's words: "The root problem with conventional currency is all the trust that's required... Banks must be trusted to hold our money... but they lend it out in waves of credit bubbles with barely a fraction in reserve."
Preach 🙌🏾⚡️💯
55:15 Chamath is correct, duration matching is 100% possible and is a standard practice for any well managed bank. You guys are missing the core of this story, which is gross mismanagement of SVB. There’s also a tremendous naïveté here where tech bros all decided to be in the same SVB club together and never once asked the question about the safety and security of their banking institution. You guys as VC sponsors should have pushed diversification of banking/treasury management at your portfolio companies. Not saying you should have predicted SVB, but this is finance 101. Sorry.
today I learned that VC’s were graced upon us to solve breast cancer, the climate, just to name a few of their selfless endeavors on behalf of humanity.
So what I'm hearing is evaluating the balance sheet of your bank is beyond the sophistication of the billionaires on this show, your problem is my problem but my problem isn't your problem, and political principles only apply if they benefit you guys--otherwise it's time to get nuanced.
I think the country is tired of people like you.
Am I the only one constantly refreshing my TH-cam subscription feed to see if the all in pod episode is up?
Awesome content as always!
Create a bell notification. I heard it and hit play.
Same here
Its just you buddy! Rest of us have a life!
You are not! 😂😂😂😂😂
17:22 17:22 17:22 17:22 17:22 17:22
This means that you should always save in the highest interest most risky bank. This is because the government will ALWAYS make you whole.
Really hard for me to believe that nobody understood the risks here. A bank agreeing to secure what, billions of dollars of unsecured debt to startups in a market where startups are in the most danger. What could go wrong?
SVB was technically insolvent and practically illiquid since Q4 last year.
What is a corrupt system - if you manage hundreds of millions and get wiped out because you cannot read a bank balance sheet, but then though political connections you get "reset".
One day you’re crowing about the free market, the next you’re begging for government welfare. Life comes at you fast
I'm a retired CPA/CBA and bank examiner of 35+ years. You fellows have no idea the level of contempt bank management/employees have for regulators, no idea of the 'cat and mouse games' played by bank management to out-wit regulators. It's a tradition that at the end of the day causes pain for some groups of people. Those "people" typically don't distribute deposits across multiple institutions. Like all law enforcement authorities, white-collar criminals don't like forensic investigators and work hard to thwart them.
Call me crazy but I’m well aware of how much of my assets at any bank are FDIC insured. Why are smarter business people not aware of that?
Because they're special tech entrepreneurs who shouldn't be held to the same standards as the rest of the plebs in America. /s
They're well aware. They keep profits when they win. They want you to bail them out when they lose. And they'll virtue signal all day about working people losing their jobs etc. A healthy economy is what we get when these guys take their losses.
All in but if you lose you get a bail out
100 percent agree with chamathe that the average person is sick of both wall street and silicon valley excess.... it's time for a reckoning.
bitcoin is the solution
Chalmathe seems like the only one of them that isn’t an ass.
@Kevin Weber oh they can all be asses at times including chamathe... but I still like them. How may friends or family members do you have that are asses ? We all have at least one .
@@michaelz6408noooo
Please let the market run its course on the thousand of worthless silicon valley startups that wouldn't have existed without the excess of free money. That includes founders, and employees alike making an obscene amount of money in selling worthless products while in normal market conditions they would be employed at 50k top. Enough with the government picking winners and losers and drugging the economy for the regular guy (99.999%) of population.
The worthwhile ideas and products will survive just fine.
SIVB does not need a bailout for depositors, depositors are FDIC insured up to $250k, therefore the little-man is covered. Sack's wants a taxpayer bailout for companies that neglected to do proper risk management (distributing their capital among multiple banks). Had these companies distributed their cash up they would have been able to absorb the loss, it still would have stung, but at least they wouldn't have gone out of business. This was one of the only podcasts I did not enjoy. It definitely felt like a plea to save your own money/industries near-term future.
Can’t agree more
TARP was used for viable companies. We can't throw good money after bad. Many of these companies were a product of ZIRP and would fail without the additional headwinds presented. A comparison to TARP bailouts is not supported by the data, as many of these companies are pre‐profit and based on a hope and a prayer.
I watched this when it right came out and came back now to check out the comments. Very encouraging to see most people see the blatant hypocrisy of the hosts here.
If only you guys would argue on the behalf of student loan forgiveness as hard as you do for corporate bailouts. It's the height of hypocrisy.
Thanks for the great content guys. Interesting takes. However, what you guys are essentially advocating for is 100% federal guarantee of all deposits. If you're going to recommend it for SVB you have to recommmended it for all banks not just well connected ones with prominent clients. I can't see that being realistic unless you have a massive increase in regulation, which let's not kid ourselves, will be fought tooth and nail by the industry and attacked as "big goverment overreach/socialism/communism" by the politcal right and overall business community. In my opinion you go to the VC community and get them to fill the majority of the hole in SVB's balance sheet and/or front the immediately liquidity needs of their portfolio companies, as it's their company's that are most at risk. They're needs to be market risk to them and if it means they can't support 3 or 4 new venture companies, which in all likelyhood will not be successful companies in the long run anyway, and they have poor returns for LP investors in certain funds, so be it.
No bailout, capitalism requires these clearing events. if these are the smart people that they think they are they will be able to figure it out over time. But asset bubbles need to pop and this is one massive one that popped really quickly.
NO BAILOUTS. LET CAPITALISM RUN ITS COURSE.
Oh crap! Our whole house of cards is tumbling guys! Quick, get a picture of a puppy! 😂
What a gross conflict of interest you all have for making this case, not once did you disclose it. Shame on all of you.
I woke up like I need to hear the boys weigh in on SVB. Thanks for the emergency pod!
Most interesting part is 60min, Jcal hits on the real question that VCs who want the bailout don’t want to acknowledge. Lots of value at risk, tons of upside. The folks who would be bailed out are really the VCs who didn’t have their companies ready for a risk like this. Make accounts whole and take warrants diluting the VCs, otherwise VCs make up the shortfall. This isn’t being discussed enough. Small returns on holding treasuries no one wants isn’t worth, go for the real gold.
I think "the boys" have already had their say.
Just because they claim to want to support breast cancer, doesn't make them contributors to equality.
They probably fund more to prostate research under the hood
@@monkeyking5162 Yes, and Amen! & Truth Be Tellin!
Well, the entire program is bailout request.
venture capital we make tons of money we keep it..... We lose money please tax payers help us out. Bull sh it run a business that makes money.
I like how nonchalant Sacks was at the end when he dropped the pearls about "oh we exited SVB since our pod discussion" :D
Which pod discussion. How long ago ?
@@fredwinslow744 he didn't say which one exactly but it much have been 2022 December or 2023 January - that's when short positions on SVB started to rise.
Lol cause he knew. Peter told him
He might be lying to make himself look smart. Sachs sounded like he was nearly in panic.
46:25
That is called a bailout
Everyone hates Big Daddy government until they need big daddy government.
Not everyone, just these clowns
Jcal is not afraid to jump on the grenade of asking dumb questions to help us viewers (and often gets dunked on for no reason) Much appreciated jcal
Media: “This wasn’t a black swan. Concentrating all the risk in one industry, and having funding and the backstop to funding all have money in same institution. This was just dumb, and they should go out of business”
Looks like the advisors to the president and Yellen listened to you guys.
That's the most pathetic part about this. That these guys are so full of themselves that they thought they saw something the government didn't. The idea that these tweets impacted the FDIC in any way is a delusion of grandeur. The only thing it impacted was contagion, positively.
If this is a deal to consider for taxpayers, why won't the VCs step in and provide the backstop? If you're providing a backstop for deposits you are not getting equity. You're providing a loan. This MTM loophole is used everywhere, look at Citadels balance sheet. Hold the right people accountable 1.Risk officers at SVB , 2. Regulators. Sell the assets, depositors get what's left. VCs can fund the difference.
Dude it is so fun watching these smart guys finally have this hit them in the head 😂
Nah they just get bailed out by the government
everything this pod has done over the last 3 years was just negated with this episode… The amount of hypocrisy people have when their money is on the line is outstanding
Back in the old days, communities and industries never allowed themselves to be too highly concentrated in one bank. This problem has been building up for decades and has contributed to the Silicon Valley frat boy swagger. SVB was a club, not a bank, that catered to it's depositors. To claim that depositors didn't know the risk is ridiculous, they have been skirting banking laws for a long time in order to create exclusivity over valuation models controlled by a few, for the benefit of a few. Five years from now, the industry will be much healthier with this SVB failure.
Interesting take Sacks. Every individual actor has to do what's in their best interest, but we aren't trying to start another run.... That is exactly what starts another run is everyone worrying about themselves. You're essentially the old guy in Its a wonderful life asking for his full $242.
It’s amazing how quickly Sachs becomes a MMT’er when his bank fails. I say let it fail. Let them all fail.
it's textbook. they all do.
There is no minimal risk for contagion considering this banks client base and exposure to treasuries. Most of the other banks have a diverse selection of depositors not just tech
He isn’t asking for bank bailout. People and companies that put deposited money in the bank needs to get their money back. Big difference. OR would you rather bail out GM and not depositors?
@@PareshDesaiYL same thing.
@@lostledger Keep voting for Ukraine bailout!
To say I'm disappointed in these 4 is an understatement. The level of hypocrisy being expoused here is monumental. These 4 were beating the drum for Powell to get inflation under control with the only tool in his arsenal which was to raise rates and trigger a recession where people LOSE their jobs. Now all of a sudden since its their industry, their people who will lose their jobs, all of a sudden its "a lost decade of innovation" and "a Lehman event" if overpaid underperforming tech companies and their employees lose their jobs is just embarrassing. You see who really holds their beliefs when the SHTF and how they stand. Sacks is on Twitter multiple times begrudging government bailouts, but now its his chips, and he's 180. We knew Chamath had no morals, but Friedberg, really? This is the moment you look at these guys and you realize while they are all brilliant in their own right, they are also the most susceptible to fear and hypocrisy than everyone else. Utterly pathetic display fellas. We went ALL-IN together and it turns out none of you had the nuts.
The first time Sachs demonstrates some humanity on the pod & there's no video - classic
It is important we do not see him reading the script ;)
AI generated
One week Jason opines on the best duck in Sonoma. Next week he’s making the case for a complete bailout of venture capitalists caught in the SVB collapse. Unreal.
Let them eat duck!
I am surprised there is a new episode today, but I was praying for it😇......I can't imagine a better place to go for some inside information! Thanks to all of you for sharing your time and knowledge.
Well they're begging for a government bailout, so all you listened to was a bailout infomercial.
Chamath That thing that you once called the biggest investment of our time is up 20% in the last 24 hours
There is no way they should be bailed out. No one is to big to fail. Healthy economies need success and failure. The corruption of the last economic crisis bail out should never be repeated. Let them fail let them learn.
There’s so much confusion around this topic. Most people are not calling for investor by outs. There calling for depositor by outs. So imaging your bank going out of business becouse they miss managed the money. In this case you lose your money and the banks investors lose there money. What these guys are arguing is let the bank investors lose there money but the people who just stored there money in this bank should get there money back. Not just ethically but becouse if customers of banks can lose there money all bank customers will go to the 4 larges banks only effectively creating a giant monopoly in banking that will have negative effects not just on investors in that one bank and customers in that one bank. But it would cause harm to customers of all banks. Investors in all small banks and only benefit investors in the 4 large banks. There advocating for the government to support customers of the bank not the investors. It is a bit hypocritical for especially sacks to be so pro government stepping in especially becouse he wants big government intervention on a very short time frame from very few powerful individuals with no oversite. Typically he would advocate against that but hopefully he will learn from this and understand why regulation and government intervention can be a useful tool that has positive effects if used right. But none of them called for a bailout of the investors.
SPAC king complaining about loose requirements for small banks 😂
I am not in the tech space nor particularly educated in the banking sector, but suggesting the little guy, which really in this case are portfolio companies they are invested in, must have Bail outs for the sake of continuing innovation and benefit to humanity seems weak. Why would banks ever change their policy if they are going to just receive Bail outs? Isn't this inherently anti capitalistic to just rinse and repeat this process every boom and bust? Would appreciate some input as I dont fully understand this space.
It's unadulterated hypocrisy from the entire cast. Shows you what they really feel about themselves and their kind. Sacks talks incessantly about the elite, but when its regular Joe Schmoes losing their jobs working blue collar industry, its okay they lose their jobs and homes. Yet, when its silicon valley technocrats, oh noo we're the center of innovation, bail us out please. Overall disgusting display here.
Also they were so against student loan forgiveness. I love them but it’s a little 2 faced.
It's the same principle as the one that safeguards my deposits in my bank.
I thought they were very clear that clients/depositors should get their money, even if it requires government support.
Investors in the bank and holding company should come next, probably so many cents/dollar.
The managers, c-level execs, eg those who made the faulty decisions should nothing in terms of a bailout.
@@raymondadkins9130 I’m not saying don’t help them. I am saying why do rich people pick and choose. They were so against the student loan forgiveness for regular folks. Just like students chose to go get higher education and risk debt, those employees chose to work for higher risk start ups for a better future payout. Both made a logical choice. Both cases are innocent and did nothing wrong. I just don’t like the bias towards their Silicon Valley peers. They only care about their own. I think students who get shoved into immense debt before they can legally drink are way more innocent than adults who made a conscious choice to work for startups and collect those fat Silicon Valley cheques.
@@raymondadkins9130 it’s your choice who you decide to work for though isn’t it. You choose to work for a risky start up whose founder would store all their eggs in a fancy basket. You decided to collect those nice startup cheques and equity. Working for startups always comes with a risk. Taking out debt for school comes with a risk. Same difference
This isn’t even close to a “Black Swan” event as described by Nicholas Talib and every time I see it referred to as such I realize how shallow and specious most commentary is these days. This is a run of the mill regional bank run being blown out of proportion by the current rent seekers of a Federal investor bailout who helped fuel it. Caused by entirely predictable events. I guess 7 months without a head of Risk Management is unusual, but it is not unprecedented.
You work for 40yrs to have $1m in your retirement, meanwhile some people are putting just $10k in a meme coin for just few months and now they are multimillionaires, all thanks to Mrs Jane, God bless you ma
Wow I' m iust shock someone mentioned expert Mrs Jane thought I'm the only one trading with her
She helped me recover what I lost trying to trade my self.
You're right 👍
She's really amazing with her skills..she changed my 0.5btc to 2.1btc
I think I'm blessed because if not I wouldn't have met someone who is as spectacular as expert Mrs Jane,
I think she is the best broker I ever seen.
Why don't these rich vc's put up their money first to backstop svb if they think its such a good idea.
Why not take the opportunity to make 50 Cent on the Dollar like they said?
Remember , mark to market was the norm prior to 2008. Removing this requirement was what helped stopped the collapse and has helped the continuation of progress
These guys keep saying that nobody did anything wrong but they did. They left millions of dollars in banks uninsured. Banking is a for profit business just like the tech co’s and VC’s. If you are a depositor and you are over your insurance limits, if something happens, you become a creditor of the bank. I’m not sure how these Stanford MBA’s have not figured this out, especially after the financial crisis.
19:00 Chamath talking about accountability 😂😂😂
Edutainment at its best. Thanks besties.
Fuck a bail out. These guys did a great job at making a case for why we should all bail out their buddies. SV had an oopsie and now we're all supposed to pay for it - you think when that happens anybody will lose their bonuses or go to jail? Psh
The whole, "small part benefits the whole" argument kinda falls on deaf ears when these guys didn't support student loan forgiveness because the same argument there can be said. Also, they're really reaching when they say things like, if "small" tech isn't bailed out we're gonna be set back ten years of innovation for breast cancer research.
When does a bank go from too big to fail to too big to save? Asking for the next pod
An hour and a half of four vc people squirming, that their world maybe changing.
There's something wrong with the way freiberg rationalizes terrible business practices
I don't see any difference between FTX and SIVB crisis. Both used customers deposit to invest/trade.
You arent bailing out innovation or tech or salaries, you are just bailing out rich LPs and VC money. VC's exacerbated this run, so If these funds really want these companies to continue, then the LPs and VC will step up and fund those that should survive. If it's 80 cents on the dollar, the LPs only need to fund the difference. The US Tax payer doesnt benefit from a bank bailout here. We should either systematically raise the FDIC limit, or not touch it
Venture capital is risky by nature. They get the big wins, they need to take the big losses as well. No bailouts!
Just a bunch of whiny elites crying for the government to bail them out after their bank took zero precautions for interest rate hikes. This episode makes me more angry the more time goes on and the way it all played out.
They will never live this down, so there's that.
You guys will never live this down