[HN Gopher] Silvergate Bank to Begin Voluntary Liquidation
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Silvergate Bank to Begin Voluntary Liquidation
Author : pg_bot
Score : 50 points
Date : 2023-03-08 21:38 UTC (1 hours ago)
(HTM) web link (dfpi.ca.gov)
(TXT) w3m dump (dfpi.ca.gov)
| LatteLazy wrote:
| This is a real pity.
| madballster wrote:
| Why - unless you're being sarcastic? Looks to me like the
| system is working Early warning system pushed the bank to
| unwind positions before hurting depositors. Regulation appears
| to be working well, for once.
| elkos wrote:
| How so?
| Scoundreller wrote:
| My guess is the loss of a crypto on/off-ramp in USA.
| dzdt wrote:
| Good context by Matt Levine a few days ago [1]. Basically
| Silvergate did a lot of business with crypto firms and got burned
| not by crypto speculation but just by holding long maturity safe
| assets when too many of their customers wanted to withdraw money
| on a short term basis. The result was falling below the line of
| being "well capitalised" as a bank. Bank regulation seems to be
| working here: there is no indication of wrongdoing or losses to
| depositors...
|
| [1]
| https://www.bloomberg.com/opinion/articles/2023-03-02/silver...
| rkagerer wrote:
| [1] https://archive.is/yH1A5
| londons_explore wrote:
| > holding long maturity safe assets
|
| I thought banks were able to sell those long maturity assets
| for cash to another bank or investor to avoid exactly that kind
| of situation?
|
| And my understanding is banks must meet their regulatory
| requirements overnight each night, so there is a market for
| overnight loans/swaps/etc to make sure thats the case.
| dragontamer wrote:
| > I thought banks were able to sell those long maturity
| assets for cash to another bank or investor to avoid exactly
| that kind of situation?
|
| Those assets dropped in value by like 20% last year. Check
| out the stock ticker "TLT", which tracks 20+ year treasuries
| to see just how bad it was, zoom out to 1-year or 2-years.
| Octokiddie wrote:
| That TLT story is being severely under-reported.
| yieldcrv wrote:
| Matt Levine is a good example of how writing cynically about
| crypto matters makes you wind up correcting crypto adversaries
| so much that you wind up coming across as a crypto proponent,
| simply from being able to opine accurately on what's going on.
| colesantiago wrote:
| Good. This should destroy more confidence in crypto if it hasn't
| already.
|
| Now that the crypto hype has pretty much died, there isn't any
| need for anything crypto at all.
|
| A completely irrelevant and speculative industry which has no
| legit usecase other than losing people's money, the only thing
| that crypto is good at.
| dylan604 wrote:
| Web3 wants to have a word /s
| the_mitsuhiko wrote:
| Necessary context: Silvergate Bank was a major (by crypto
| standards) bank underpinning crypto companies.
|
| https://en.wikipedia.org/wiki/Silvergate_Bank
| rippercushions wrote:
| More to the point, Silvergate was one of exactly two banks
| serving crypto companies in the US. The other, Signature Bank,
| is also under a lot of regulatory pressure and it has already
| cut off eg. Binance and Kraken.
| yieldcrv wrote:
| There will be other banks and onramps. There was a time
| before those two banks. And there are many more institutions
| open to the business now.
| Aloha wrote:
| Yeah, I was going off to link something similar. I was lost as
| to relevance.
|
| https://www.cnbc.com/2023/03/08/silvergate-shutting-down-ope...
| elektor wrote:
| It's interesting to see how quickly the public interest (and
| money!) has shifted from cryptocurrency to AI.
| AceJohnny2 wrote:
| Heh, cstross even has a "conspiracy" theory about that sudden
| shift:
|
| https://www.antipope.org/charlie/blog-static/2023/02/place-y...
|
| (Which I don't buy)
| cloudking wrote:
| It takes about 5 minutes playing with ChatGPT to realize it
| has real value, seems like author hasn't really tried it.
| elkos wrote:
| There are some pretty interesting ideas there. I had a
| conversation with a friend the other day and the whole
| blockchain then, AI now thing reminded me of a saying about
| shelling "Picks and Shovels during a Gold Rush". I think it
| is intriguing that GPUs are the "picks and shovels" of both
| the Blockchain Rush and the AI Rush. One could point out
| conspiracies and PR, another could point out that the as GPUs
| become more general compute tools, new applications will
| emerge.
| dylan604 wrote:
| It sounds more hip than "gotta go buy some lotto"
| koolba wrote:
| 5+% US treasuries can quickly shift the calculus for USD
| holdings. And lack of "real" money in the system cascades
| quickly.
| dragontamer wrote:
| Given all the economic data + extremely hawkish comments from
| Powell yesterday/today, it looks like we're going even higher
| than expected this year.
|
| FFR futures are expecting a +0.50% increase for the March
| 22nd meeting.
| ForHackernews wrote:
| As they say, it's only once the tide goes out that you
| discover who's been swimming naked.
| ForHackernews wrote:
| I mean, one of them has millions of users and is poised to
| revolutionize the entire digital economy (and perhaps the non-
| digital one as well) and the other one is electronic chuck-E-
| cheeze tokens older than the first iphone and still useless.
| Rebelgecko wrote:
| I love how (unintentionally?) ambiguous your comment is.
|
| Crypto bros and LLM bros both monetize via tokens
| bink wrote:
| I wish I could agree with you, but there's a lot of smoke and
| mirrors with "AI" right now. These companies are letting
| people believe these services are thinking machines that are
| on the verge of consciousness when they are far from it.
| jkubicek wrote:
| There's some people making outsized and unreasonable claims
| about AI today, sure, but AI is generally useful and
| valuable right this minute. Crypto never really made it
| over that hump.
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