The SVB situation is explained by Jay Singh, Former Goldman Sachs Manager of billion dollar funds and founder of Specialist Research. Tom Nash is interviewing Jay Singh.
The CEO of Silicon Valley Bank bought $90 billion of ten-year securities. They did not offset the long-duration interest risk. They did not have interest rate hedges.
When rates rise, fixed-income prices fall. A general rule of thumb is for every one year of “duration,” each 1% interest rate move impacts the price of the bond by: 1% x Duration
A 1% move on a 9 yr duration bond is ~9% +/- on the bond price.
SVB had 25% of its deposits withdrawn in one day.
Lehman Brothers was one of the biggest financial company to go bankrupt. This happened on Sept. 15, 2008. Silicon Valley Bank is the biggest bank to fail other than Washington Mutual.
Kim Olson was hired as SVB’s chief risk officer in January. She had a senior risk management role at Deutsche Bank during the Great Recession. In 2017, Deutsche Bank was forced to pay a massive $7.2 billion penalty after admitting it lied to investors about its mortgage-backed securities.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
Known for identifying cutting edge technologies, he is currently a Co-Founder of a startup and fundraiser for high potential early-stage companies. He is the Head of Research for Allocations for deep technology investments and an Angel Investor at Space Angels.
A frequent speaker at corporations, he has been a TEDx speaker, a Singularity University speaker and guest at numerous interviews for radio and podcasts. He is open to public speaking and advising engagements.
