what's the deal with svb? genuine question, i am very out of the loop.

🔍 ensdata.net ✦ 𝙽𝙾𝚆: design engineer @family ✦ 𝙿𝚁𝙴𝚅: @rainbow 🌈 ✦ 𝙱𝚄𝙸𝙻𝙳𝙸𝙽𝙶: @vision

By 2021 deposits had grown from $60B to $180B in 3 years. They were growing so fast they couldn’t loan out $ fast enough, so they bought $80B of mortgage backed securities.

As interest rates rose and tech was struggling a bit more, SVB thought they’d need to sell their MBS’ to cover withdraws and potentially…

find a security with higher yield. When they announced Weds that they wanted to sell and raise to cover this issue, investors/VCs panicked and $42B was withdrawn in 24 hrs -> run on the bank and the FDIC had to swoop in.

two things I’m particularly curious to learn more about:

1. why did the CEO sell $3.6M of SVB stock less than two weeks ago? https://i.imgur.com/4dmcIUS.jpg

2. would there have been an alternative plan to cover withdraws that didn’t require selling their mortgage backed securities?

hope everyone is doing well/hanging in there during what’s clearly a very turbulent time 🙏