{"id":59124,"date":"2023-03-15T03:05:02","date_gmt":"2023-03-15T07:05:02","guid":{"rendered":"https:\/\/cablemanpro.com\/wallstreetpr\/how-big-tech-the-feds-and-the-media-all-failed-on-silicon-valley-bank-59124"},"modified":"2023-03-15T03:05:02","modified_gmt":"2023-03-15T07:05:02","slug":"how-big-tech-the-feds-and-the-media-all-failed-on-silicon-valley-bank","status":"publish","type":"post","link":"https:\/\/cablemanpro.com\/wallstreetpr\/how-big-tech-the-feds-and-the-media-all-failed-on-silicon-valley-bank-59124","title":{"rendered":"How Big Tech, the feds and the media all failed on Silicon Valley Bank"},"content":{"rendered":"
\n

The tech titans<\/a> are looking like a bunch of whiny bros.<\/p>\n

They view themselves as daring, risk-taking entrepreneurs, who thrive without the heavy hand of government \u2013 that is, until there\u2019s a bank failure. Then they beg the feds to step in and save their money \u2013 even those who had millions in Silicon Valley Bank<\/a>, way over the $250,000 limit for federal insurance. And that request was granted: they won\u2019t lose a dime. That includes Mark Cuban, who had $3 million in the bank for one of his projects.<\/p>\n

The now-fired managers of Silicon Valley Bank thought it was a snazzy idea to grant themselves bonuses last Friday, just before the weekend\u2019s collapse. Perhaps that extra money can be clawed back. The ousted CEO, Greg Becker, had lobbied the Hill<\/a> to relax regulations on his and other regional banks.<\/p>\n

But the tech industry has plenty of company. Federal regulators failed to spot the mounting problems, as they so often do until it\u2019s too late. President Trump and Congress failed<\/a> by rolling back regulations that would have required tougher scrutiny of the valley bank. President Biden did what he could to stop widespread bank runs, but it\u2019s ludicrous to say this is not a bailout \u2013 and bank customers will pay, either through higher fees or some other mechanism. The danger is that the bank\u2019s big-time account holders wouldn\u2019t have been able to make payroll, triggering lots of layoffs.<\/p>\n

HOW THE MEDIA ARE TRYING TO MORPH DESANTIS INTO A SCARIER VERSION OF TRUMP<\/strong><\/a><\/p>\n

And then there\u2019s the press<\/a>. Days before the collapse, Silicon Valley Bank celebrated being named to Forbes magazine\u2019s list of “America\u2019s Best Banks” for the fifth straight year. Pundits now joke about the Forbes curse, since the magazine also touted the now-convicted Elizabeth Holmes and the now-indicted Sam Bankman-Fried.<\/p>\n

Even worse, CNBC\u2019s Mad Money guy Jim Cramer urged viewers to buy the bank\u2019s stock a month ago, saying it was cheap.<\/p>\n

Turns out one short-seller figured out what was coming and urged his Twitter followers to\u00a0avoid getting burned.<\/p>\n

Former hedge fund manager William C. Martin started shorting the stock last month, saying the bank had boosted its security holdings by 700 percent.<\/p>\n

“They had bought all these mortgages at the top of the market and were sitting on a massive unrealized loss,” Martin told Fortune, adding “it was sitting there in plain sight.”\u00a0<\/p>\n

Martin also said a slowdown in the start-up world meant many of the bank\u2019s customers were burning through cash instead of making new deposits.<\/p>\n

If William C. Martin could figure this out, why couldn\u2019t the FDIC?\u00a0<\/p>\n

Of course short-sellers have a vested interest in talking down a stock, but Martin was right.\u00a0<\/p>\n

Reuters reports that the bank started scrambling<\/a> \u2013 in a way that led to its downfall \u2013 after being notified that Moody\u2019s planned to downgrade its credit rating.<\/p>\n

THE MEDIA’S CORPORATE WARFARE – DESANTIS VS. DISNEY, NEWSOM VS. WALGREENS<\/u><\/strong><\/a><\/p>\n

If Moody\u2019s could figure this out, why couldn\u2019t the FDIC?<\/p>\n

After the financial crisis of 2008, when major Wall Street banks failed, Barack Obama signed the Dodd-Frank law<\/a>, curtailing risky practices for banks and boosting scrutiny that they had enough cash reserves to survive bad developments.<\/p>\n

But in 2018, Donald Trump<\/a> signed a law that raised the threshold for such tougher scrutiny from $50 billion to $250 billion. Silicon Valley Bank would not have been exempt had that regulatory rollback not passed. And in fairness, 17 Senate Democrats and 33 House Democrats voted to water down the law.<\/p>\n

Federal authorities also closed Signature Bank, a New York institution, over the weekend. One of its board members is Barney Frank, who was paid more than $2 million over seven years.<\/p>\n

The former Democratic congressman<\/a> said the partial rollback of the law that bears his name was not to blame. He said Signature was hurt by last year\u2019s crypto collapse and the panic over the valley bank.\u00a0<\/p>\n

But wasn\u2019t servicing the crypto industry an inherently risky move for the bank?<\/p>\n

“They shoot one man to encourage the others,” Frank told the New York Times. “I think we were shot to encourage the others to stay away from crypto.”\u00a0<\/p>\n

The failure of the media to figure out that Silicon Valley Bank was in terrible shape reminds me of the savings and loan crisis of the late 1980s, which was a far larger and more damaging collapse. As banks handed out mortgages to people who clearly couldn\u2019t afford them and made other high-risk investments, the national press, with a couple of notable exceptions, mostly snoozed.\u00a0<\/p>\n

SUBSCRIBE TO HOWIE’S BUZZMETER PODCAST: A RIFF ON THE DAY’S HOTTEST TAKES<\/strong><\/a><\/p>\n

As I wrote in my book “Media Circus” – “Ask journalists what went wrong and you get a whole lot of lame excuses. The problems of S&Ls were too dull, too arcane, too complicated for the broad-gauged machinery of daily newspapers. No responsible official predicted the collapse. It wasn\u2019t a hot political issue. No one really cared because most depositors were insured.”<\/p>\n

Several prominent reporters told me they had kicked themselves for not doing more, or had their editors\u2019 eyes glaze over when they pitched stories on the subject.<\/p>\n

The demise of Silicon Valley Bank is not on the same scale, but it is still the second-largest bank failure in American history. And the tech industry is absolutely tone-deaf when it comes to deflecting blame.\u00a0<\/p>\n

But it seems we are doomed to have history keep repeating itself.<\/p>\n<\/div>\n

Source – https:\/\/www.foxnews.com\/shows\/media-buzz\/how-big-tech-feds-media-failed-silicon-valley-bank <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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