Some Truly Awful Advice for Silicon Valley Bank

March 18, 2023

Read time: 10-15 minutes

Typically, I try to stay away from giving advice.  I prefer to use words like “friendly reminders.”  But in this case, it is clear that Silicon Valley Bank needs some good advice.

I have none.

Silicon Valley Bank is a corporation that has found its hand in the proverbial cookie jar.  It got its hypothetical wiener stuck in the metaphorical zipper.  In plain English, they’re royally screwed. 

Unfortunately, they found themselves in a situation where they have a significant amount of assets and good faith from a whole bunch of people.  Today, they are completely and utterly bankrupt!

You see, a bank is a place where people store their money.  Its sole purpose is to have money.  Now, they are in a situation where they are slowly bleeding all the money they have.  This is a problem for a place like a bank.

It’s like McDonald’s not having any burgers.

It’s like Zale’s running out of diamonds.

It’s like Disneyland getting rid of Mickey Mouse. 

It’s not sustainable for a 21st Century business to start losing the essential asset and rocket fuel that propels itself to the moon.  It's bad business.

For those who have been busy working and spending time with their children, the economy is once again finding itself in a state of what medical professionals call CTD.  CTD stands for “Circling the Drain.”  It all started when a whole bunch of people, startup companies, soccer moms, and regular old schnooks, all started withdrawing their money from Silicon Valley Bank.

Listen:

This is bad.  

Silicon Valley Bank has burst into flames.  And one bank bursting into flames has led to another and another and another. 

It has been a tough week. 

But look, Silicon Valley Bank did this all to itself.  They decided to sell off securities for much-needed cash (approximately $1.75BN).  Then they told the whole wide world about it (you know, to be transparent).  They could’ve held these assets.  What’s the big deal?  Interest rates spike a couple of points, Google lays off a bunch of 20-year-olds, and eggs cost $20 for a dozen and now you’re gonna decide to throw your balance sheet all haywire?  Just for the sake of “bolstering your position through market volatility?”

Apparently yes.  This is exactly what Silicon Valley Bank has decided.  Upon the big news that Silicon Valley was selling off securities, panic ensued!

Now, we’re wondering if the whole darned financial system is going to get submarined by Silicon Valley Bank’s soft financial decision-making.  A real bank would pull itself up by its bootstraps, throw on Rocky III, and blast “Eye of the Tiger” until its ears bled. 

But that’s okay.  The Dow Jones is about in the same spot as it was when this mess started a week ago.  So, no need to panic just yet!

***

On October 17th, Silicon Valley Bank will turn 40 years old.  Congratulations.  It is about to enter a phase in its life where it has never been before.  It’s something of a mid-life crisis.  It’s going to have to take a hard look in the mirror, think about its family and children, and start making some tough decisions that is going to set it up for the rest of its life. 

The best thing about when the government has sacked you and you’re forced to turn the keys over to Big Brother, is now the world is your oyster.  There are so many options for Silicon Valley Bank.  When it first started from the ground floor in 1983, it was just a baby.  Hardly anyone could see the vision that Bill Biggerstaff and Robert Medearis could see (apparently, that vision is now a pile of rubble and economic collapse).  Biggerstaff and Medearis saw a vision of a future where startup companies thrived while just next door schizophrenic campers pooped in Whole Foods bags.  That dream happened.  To that, we are all in debt. 

But now, it’s 2023.  Silicon Valley Bank needs a fresh understanding of how to survive in this world.  

It’s time for a change.

Silicon Valley Bank needs money and needs money fast.

It’s time Silicon Valley Bank pulled up its bootstraps and began anew.

***

Where to start? 

That’s a good question.

It’s tough when you’ve made bad decision after bad decision and found yourself in a pair of handcuffs after you spent your whole life being told how great you are by your parents and moccasin-wearing tryhards.  It stings. 

Well, since the government is now in full control of the financial in-flow and out-flow of Silicon Valley Bank, the bank really needs to stay focused on the present.  Sure, you’re assets are seized, but why act like the $100 bill in your pocket is not going to be put to work for you?  Do you want steak now?  Or do you want to turn that $100 into $200?  The choice is obvious.  A steak is a steak, but $200?  That could be anything!  It could be two steaks!

Silicon Valley Bank, with the little financial capital and petty cash you still control…it’s obvious that you should make the wisest investment out there in the modern financial markets.  Cryptocurrencies have come and gone.  Investing in a bold conglomeration of startup companies only has so much potential (naturally).  Mutual funds, retirement accounts, and savings only provide so much protection.  There is definitely a surefire good investment to make out there in these uncertain times.  I have an organization to invest in.  The organization has recently acquired some valuable assets that now tilt its balance sheet in the right direction.  Its New York Stock Exchange ticker symbol is:

FDIC

Even if there is a lack of opportunity being able to invest in FDIC (I am almost positive that the further you dig down the rabbit hole of internet research, you will find you cannot invest in FDIC), there is still hope. 

For instance, it is my understanding that once there is a bank run, you can always look to the local banker who runs the show.  If a bailout doesn’t come from the government, why not trust another private bank? 

George Bailey was razor-thin close to trusting his local private bank.  He didn’t.  And what happened to him?  He needed a bailout on the backs of hardworking taxpayers.  George Bailey is scum. 

Henry Potter gave great advice to George Bailey:

“Ideals without common sense can ruin this town…what does that get us?...A discontented, lazy rabble instead of a thrifty working class.”

Mr. Potter is absolutely right.  George Bailey was a terrible bully toward Bedford Falls’ local financial system.  He offered deals to anyone and everyone who had a pulse.  Bailey Park was filled with has-been’s, nobodies, and shoulda-coulda-woulda’s.  None of them deserved the time of day let alone a line of credit to hold a roof over their head.  George Bailey is one of the reasons why the world finds itself in an endless stream of up’s and down’s.

Silicon Valley Bank, like George, lost its way.  Somewhere down the line, through all these super-duper important startup companies that needed all this funding, they forgot the key principle of finance:

You must be incredibly selfish and cold-hearted.

Henry Potter, on the other hand, followed his cold heart to the finish line.  Where George Bailey saw homes, Henry Potter saw thriving businesses.  Potter’s investments went so swimmingly, they re-named the town Pottersville in his honor. 

Who wouldn’t want a world where Pottersville lived on?

It all went something like that.  Someone needed to step up to that bully, George Bailey, from just handing money to everyone all over town.

Potter talks common sense.  And if there is anything that Silicon Valley Bank must have gained during this time, it’s common sense.  For the love of all things holy, at least they took a good hard look at the declining economy and decided to sell while they still had a chance!  Even CEO Greg Becker sold his shares at the perfectly right time! 

Silicon Valley Bank is a decent institution going through a tough time and the government is lucky to have a great team on its books.

***

What would our financial forefathers say?  Would they just lay their swords down and die?  Of course not!  This is not losing!  This is learning!  This is not a failure!  This is an opportunity!  It’s time to seize the opportunity of a shifting business model.  Bankruptcy is not the end, it is just the beginning.

Silicon Valley Bank…until your bank account becomes unfrozen and daddy’s allowance gives you a parachute to pursue these wild financial dreams once again, do not fret.  Chill out.  Take it easy for a while.  Catch up with some friends.  Let them know what you’ve been through.  If anyone will understand, they will understand.  Play some golf.  Drink some cocktails.  And wait for the storm to pass you by.

Eventually, 2023 will turn into 2024.  The Dow Jones will hit $40,000.  And we will all play Rocky movies and pump adrenaline while desperately trying to get that sucker up to $41,000.

Time for a Joke:

I saw this sign that said:

"WATCH FOR CHILDREN"

I thought that was a pretty good deal.