Silicon Valley Bank and the WMF

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Re: Silicon Valley Bank and the WMF

Post by Bbb23sucks » Tue Mar 14, 2023 7:57 pm

Cla68 wrote:
Tue Mar 14, 2023 3:20 pm
I enjoy asking WP and WMF bigwigs direct questions in situations like this because they react so comically angrily and defensively, as if they can't understand how anyone would presume to question how they do business. It's not just them, though, you may have noticed that after Biden announced that his administration was going to bail-out all the account holders (but not the bank itself) that he refused to take any questions.

When people involved in a situation act so defensively and guardedly, in my experience it means that they feel really insecure about the whole situation and don't want to have to answer any tough questions about it. This usually seems to happen when people have big money involved in a house of cards. As some commenters have explained, the entire Western financial system right now is still on unsteady ground because of the way the government handled the 2008 financial crash, and the markets are still unstable because of a number of factors, including that government involvement, which has interrupted the equalizing nature of free market economics.
The "free market" is a fallacy.
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Re: Silicon Valley Bank and the WMF

Post by ericbarbour » Tue Mar 14, 2023 10:20 pm

Cla68 wrote:
Tue Mar 14, 2023 3:20 pm
I enjoy asking WP and WMF bigwigs direct questions in situations like this because they react so comically angrily and defensively, as if they can't understand how anyone would presume to question how they do business. It's not just them, though, you may have noticed that after Biden announced that his administration was going to bail-out all the account holders (but not the bank itself) that he refused to take any questions.
Yeah, but Biden doesn't auto-respond like that to ALL questions from outsiders. The WMF has gotten very little other than thoughtless Wiki-Luv from various journalists, government officials, tech bros, a variety of certain academic people (who should really know better), and especially their favorite "victims", students. They do not take criticism well at all. And since they are drowning in donated money, they can readily get away with being high-handed jerks.

The SVB collapse is not much different from past bank collapses that ruined thousands of people. The major difference is that SVB is a political hot potato, because Valley venture capitalists and the startups they fund were using it as a piggy bank. And the bank was investing their money in Treasury bonds, when interest rates were low. Apparently for "convenience". The Feds started raising the rates (with Biden admin approval) to try to cool off the berserk inflation that started during the Covid period.

Free-market assholes really don't like to pay higher interest to the Feds, they think borrowed money should be FREEEE so they "can capitalize their profits and socialize the losses", collapse everything and walk away filthy rich. SVB did not respond fast enough to higher interest rates and could not handle its obligations. Just firing SVB management isn't really enough--those pricks should probably be jailed for investment fraud.

Time to bring this up: I continue to wonder what financial dirty tricks are being pulled by WMF management right now. They got away with the Stanton Foundation scandal in 2014. It received virtually no attention. There was a thread on Wikipediocracy, which was quickly forgotten. THAT is how the WMF responds when caught sticking its greasy little hand in the cookie jar.

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Re: Silicon Valley Bank and the WMF

Post by wexter » Tue Mar 14, 2023 10:57 pm

ericbarbour wrote:
Tue Mar 14, 2023 10:20 pm

Valley venture capitalists and the startups they fund were using it as a piggy bank.

those pricks should be jailed for investment fraud.
FRAUD 1 & 2

Fraud 1) Me, I think the "billionaires" should not have been bailed out; basically they need to be jailed. "You better bail us out if the whole system collapses" was the mantra that put so much fear into the market; these crooks got paid 100% and they needed to take a haircut.

Fraud 2) The whole venture space used a highly speculative bank that was really a money laundering operation to fund itself. SVB was printing free money by leveraging up without real collateral. At near zero interest rates you could float a $1 million for a few thousand carrying costs per year. Free money creates fraud..

Fraud 3) - How does the FED back off from zero by raising rates without exposing Fraud 2 (and blowing up the whole economy) We watched 30 year rates move from 1.82% (near zero free money that never has to be serviced) to 3.7%. Who ever is holding this trash now has to mark down their assets to the prevailing rates so)

--A bond worth $1 yielding 2.87% with a 30 year duration now sells for 83c
--A zero can be bought for 34c or held to maturity for $1 (adjusted for inflation you won't get your 34c back)

Fraud 4) Back to Fraud 2 - the government encouraged banks, pensions, and insurance companies to put their reserves into Fraud 3. Local, State, and Federal governments get to spend more by borrowing at low rates they all issue bonds. They are just like SVB at the moment.

Fraud 5) - The bailout of regional banks means that something worth 83c can be used as collateral as if it was $1 and btw you can use margin (borrow more) if need be. The printers are going brrrr with the money supply going up the delta between the market price of Treasuries and par.

Fraud 6) - Not today. ... in terms of banks this is not 2008 it was just a bunch of "screaming" billionaires fear mongering. As a result we will have only three banks over time. That is happening today!

Fraud 7) Raise interest rates and the whole enchilada explodes (as free money frauds get exposed) and debt cannot be serviced; don't raise rates and your currency gets degraded by inflation...

Fraud 8)- As of today Who in their right mind would buy a 30 year bond yielding 3.7% when you can get near 5% on the one year..

Fraud 9) - SVB probably bought 30 year at 1.82% because they were told to do so by regulators and the government. Treasury holdings were backing all the bad venture collateral that is most likley worth near zero.


Pictured folks who bought safe 30 year Treasury bonds at prices much higher than here (and possibly at $1) and now have to sell at
83c on the dollar (which is way way too expensive). Rates go up the haircut would be even greater... say 60c on the dollar! There are zillion of dollars in loaned and borrowed treasuries.


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Re: Silicon Valley Bank and the WMF

Post by Bbb23sucks » Wed Mar 15, 2023 4:48 am

ericbarbour wrote:
Mon Mar 13, 2023 8:20 pm
"BLAMETRUMPBLAMETRUMP" etc. etc.

https://finance.yahoo.com/news/svb-fail ... 00186.html

And it gets me that the near-simultaneous collapse of Silvergate Capital was just as ruinous, but it rarely gets mentioned. Perhaps because it was a "crypto thing" that few people understood?

https://www.marketwatch.com/story/what- ... er-28cd13a
BIDEN BAD BIDEN BAD BIDEN BAD

TRUMP BAD TRUMP BAD TRUMP BAD

ALL PROBLEMS ARE CAUSED BY PEOPLE WHO DON'T CONTROL THE FED
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Re: Silicon Valley Bank and the WMF

Post by Cla68 » Wed Mar 15, 2023 2:20 pm

Both the Trump and Biden administrations pumped money into the economy which helped create the bad inflation over the past couple of years which cause the Fed to increase interest rates which caused some banks to fail because they had invested too much in treasury bonds that were devalued by the increase in interest rates. The problem with constant government intervention, such as in 2008 and now, is that it incentivizes poor financial decisions by corporations and investors, like these banks did by over-investing in bonds.

Anyway, Eric mentions that the WMF is awash in cash. Organizations with too much cash will sometimes make bad decisions about what to do with some or most of it, such as investing in too-good-to-be-true schemes, like Bernie Madoff stuff, or buying too many bonds, or too much gold, or whatever. So, where does the WMF have its extra cash?

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Re: Silicon Valley Bank and the WMF

Post by wexter » Wed Mar 15, 2023 8:18 pm

By regulation, Institutions were forced to buy money losing paper (Long-term treasuries at low rates)
Bailout program is now allowing folks to sell assets (money losing paper) worth 70c for $1
Curve is now flattening which means a recession is upon us...



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Re: Silicon Valley Bank and the WMF

Post by Bbb23sucks » Wed Mar 15, 2023 10:37 pm

wexter wrote:
Wed Mar 15, 2023 8:18 pm
By regulation, Institutions were forced to buy money losing paper (Long-term treasuries at low rates)
Bailout program is now allowing folks to sell assets (money losing paper) worth 70c for $1
Curve is now flattening which means a recession is upon us...



I doubt it. A recession has been supposedly "about to happen" for the last five years now and it still hasn't happened.
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Re: Silicon Valley Bank and the WMF

Post by ericbarbour » Fri Mar 17, 2023 11:39 pm

Cla68 wrote:
Wed Mar 15, 2023 2:20 pm
So, where does the WMF have its extra cash?
Apart from annual reports, this is all they'll tell you "officially".

Some of it goes to the Tides Foundation to be put into the "Wikimedia Endowment". What happens to it then? No idea.

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