Insider Finance - Business - "They will learn nothing from this"

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March 15, 2023

Hello, Insiders. Here’s what’s on the agenda today:

The collapse of Silicon Valley Bank foreshadows a bigger reckoning for the tech industry.
A laid-off Meta worker says the company paid her to not work.
Tom Sandoval's restaurant Schwartz & Sandy's is thriving despite Scandoval.

Plus, I’m sharing my take on the SVB fallout as a final thought. Let’s go.

— Nicholas Carlson

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THE BIG STORY

A replay of SVB

iStock; Rebecca Zisser/Insider

“They will learn nothing from this.”

Silicon Valley Bank imploded in part because it was a repository for the riskiest behaviors of the industry it serviced, Insider’s Linette Lopez writes in her breakdown of the past week’s mess. SVB’s growth was supercharged by tech’s clubby, insular nature, and its operation was dependent on a rising tide that was always sure to go out.

SVB helped fuel the tech bubble, and the tech bubble helped fuel SVB. In spite of this reality, there has been little self-reflection on the part of the industry that was so closely tied to Silicon Valley Bank. And in the midst of all the immature excuses from venture capitalists and the shallow recriminations from billionaire investors, the seeds of the next bubble are being planted.

Without serious accounting about Silicon Valley’s culture and the tech industry’s role in SVB’s collapse, then something ugly like this is going to happen again.

READ THE FULL STORY HERE

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Tom Sandoval's restaurant Schwartz & Sandy's is thriving. The "Vanderpump Rules" cheating news involving Sandoval and Raquel Leviss is everywhere. But business at his restaurant has apparently never been better, one source said. More here.
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FINAL THOUGHT

SVB’s fallout

Easy come; easy go.

The expression seems to suit the whole tech industry right now, but most especially Silicon Valley Bank. That’s what I took away from Linette Lopez’s latest story on the mess.

Did you know that until 2019, SVB had just under $50 billion in deposits? That ballooned all the way to nearly $200 billion in 2021.

The money came during the huge flood of investments into the tech sector over the same period, and after some deregulation by the Trump administration.

SVB acted like that kind of money was going to keep coming in forever, and made some bets with the cash that depended on interest rates staying low.

They did not.

Then last week, pop!

Easy come; easy go, they say…

— Nicholas Carlson

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This edition was curated by Nicholas Carlson, and edited by Hallam Bullock, Lisa Ryan, Dave Smith, Nathan Rennolds, Jack Sommers, and Jack Robert Stacey. Get in touch: insidertoday@insider.com.

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Insider Finance - Business - "They will learn nothing from this"

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Wall Street: When ESG goes MIA

Bank crisis contagion

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