Tyler Bliha

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[david friedberg @friedberg]

why not just raise income tax rates?

because your real intent is not to just “provide healthcare”.

you’re masking that you are proposing the creation of, for the first time in the 250 years of this American republic, an organized government seizure of private property from citizens.

you’re calling it a “wealth tax” or a “billionaires tax” or “millionaires tax” or whatever nom du jour polls well. but at the end of the day, it’s the seizure of private property from citizens by the government. citizens that earned money, paid their fair taxes on those earnings (53% if they live in California) and are now being told they need to hand over after-tax assets because the government has failed to provide promised services with the revenue it’s collected, and are now re-casting their own failure to be a socio-economic inequity that must be justly resolved... a slippery slope that has never gone anywhere good (see economic effects in USSR, Cuba, Venezuela, France and Norway wealth tax etc.)

the American founders fled tyranny in Europe and this amazing nation was populated by immigrants (myself and your parents) from around the world not just looking for a “better life” but for a place where they could have freedom from tyrannical governments that can take what they want from private citizens. a great nation borne of property rights, the rule of law, and endowed freedoms to believe, speak, or act. these principles led to the greatest run of innovations, successes, and widespread increase in prosperity, for all citizens, ever seen.

the citizens, the individuals, not the institutions, delivered this progress. those who invented, who toiled, who bled, who sacrificed, who took risk and persevered, who led, and who changed the world, are not charlatans, kleptocrats, or oligarchs. they’re what made us all better off. prosperity is a measure of america’s success, not its failure.

it is your principle that is so offensive, as evidenced by the broad disdain for your flippant flirtation with the darkest of human fantasy - socialism. you and other neo-socialists have led so many of us to reflect on America’s history and what it is becoming. that now leads so many to consider, so unnecessarily, leaving their homes for a place where everyone stands up to shout down the principle you suggest. because if your ideas are now considered moderate, it’s clear this titanic is sinking.

that a “simple tax” of taking assets that have been earned, through toil and tribulation, rightly taxed, and preserved, should now be unjustly seized, is your solution to a problem of obvious government mismanagement and outright fraud, tells us that your true motivation lies not in giving people healthcare but in cutting down success and deleting the system of prosperity and opportunity for all.

i don’t care, and neither should anyone else, what the sum total market value of a private citizens private assets might be. it is none of my business and should be none of yours. because, again, once you open that pandora’s box, we might as well study Lord of the Flies … there is literally nothing stopping 51% of citizens demanding that their government go out and seize 100% of the private property of the 49%.

want to give healthcare to people in need? do your job and fix healthcare. make it affordable. want to be lazy about it? then do your job lazily and raise income taxes.

want to take private property from private citizens who have paid their fair share of taxes and legally earned their property, then honestly declare that it is envy, not inequity, that you strive to resolve…

[Elon Musk @elonmusk]

Much, much harder to be a quarterback than an armchair quarterback

[Tyler Bliha @tybliha]

Would this issue have been brought to light earlier with fair value accounting for HTM assets?

Is this going to drive regulators to change how HTM assets are accounted for?

Should depositors really be responsible for analyzing the liquidity / solvency risks of their banks?

[Tyler Bliha @tybliha]

Assuming fractional reserve banking isn’t going away, banks should have to mark-to-market longer-term, or “Held To Maturity” (HTM), assets

[Tyler Bliha @tybliha]

But Fed rate hikes quickly shifted the time value of money, making these assets worth significantly less if sold today.

When deposits run low and you run on a fractional reserve, those assets DO need to be sold today, and you “realize” a lot less of that than what the BS shows

[Geoff Charles @geoffintech]

Step 6: Love What You Do

“When you smile and you’re happy, you can trigger the mind to not feel your legs.” — Kipchoge

The greatest runners are the greatest because of their love for running.

Loving what you do makes you better at what you choose to do.

[Tyler Bliha @tybliha]

This isn’t a bank “bailout” - this is backstopping confidence that holding money in a bank is safe. Without that, what do we do? How do we move fwd knowing money isn’t ALWAYS safe IN A BANK?

If there’s no buyer, Gov’t needs to act; anything short of this is insufficient

[Sar Haribhakti @sarthakgh]

Literally no one credible in tech was advocating for this anyway

Ideological haters of tech and ignorant hacks wanted it to be about this

[logan bartlett @loganbartlett]

In the age of social media, if you have a big enough platform and yell loud enough about a bank run, you might eventually be correct.

Doesn’t make it right.

[Andrea S. James @AndreaSJames]

I’d love to share some knowledge I have about @FDICgov. FDIC is an *independent* government agency — not funded by tax dollars. … I worked in the division of information resources management at FDIC (basically IT) from 2000 to 2003. /1

[Bill Ackman @BillAckman]

The gov’t has about 48 hours to fix a-soon-to-be-irreversible mistake. By allowing @SVB_Financial to fail without protecting all depositors, the world has woken up to what an uninsured deposit is — an unsecured illiquid claim on a failed bank. Absent @jpmorgan @citi or @BankofAmerica acquiring SVB before the open on Monday, a prospect I believe to be unlikely, or the gov’t guaranteeing all of SVB’s deposits, the giant sucking sound you will hear will be the withdrawal of substantially all uninsured deposits from all but the ‘systemically important banks’ (SIBs). These funds will be transferred to the SIBs, US Treasury (UST) money market funds and short-term UST. There is already pressure to transfer cash to short-term UST and UST money market accounts due to the substantially higher yields available on risk-free UST vs. bank deposits. These withdrawals will drain liquidity from community, regional and other banks and begin the destruction of these important institutions. The increased demand for short-term UST will drive short rates lower complicating the @federalreserve’s efforts to raise rates to slow the economy. Already thousands of the fastest growing, most innovative venture-backed companies in the U.S. will begin to fail to make payroll next week. Had the gov’t stepped in on Friday to guarantee SVB’s deposits (in exchange for penny warrants which would have wiped out the substantial majority of its equity value) this could have been avoided and SVB’s 40-year franchise value could have been preserved and transferred to a new owner in exchange for an equity injection. We would have been open to participating. This approach would have minimized the risk of any gov’t losses, and created the potential for substantial profits from the rescue. Instead, I think it is now unlikely any buyer will emerge to acquire the failed bank. The gov’t’s approach has guaranteed that more risk will be concentrated in the SIBs at the expense of other banks, which itself creates more systemic risk. For those who make the case that depositors be damned as it would create moral hazard to save them, consider the feasibility of a world where each depositor must do their own credit assessment of the bank they choose to bank with. I am a pretty sophisticated financial analyst and I find most banks to be a black box despite the 1,000s of pages of @SECGov filings available on each bank. SVB’s senior management made a basic mistake. They invested short-term deposits in longer-term, fixed-rate assets. Thereafter short-term rates went up and a bank run ensued. Senior management screwed up and they should lose their jobs. The @FDICgov and OCC also screwed up. It is their job to monitor our banking system for risk and SVB should have been high on their watch list with more than $200B of assets and $170B of deposits from business borrowers in effectively the same industry. The FDIC’s and OCC’s failure to do their jobs should not be allowed to cause the destruction of 1,000s of our nation’s highest potential and highest growth businesses (and the resulting losses of 10s of 1,000s of jobs for some of our most talented younger generation) while also permanently impairing our community and regional banks’ access to low-cost deposits. This administration is particularly opposed to concentrations of power. Ironically, its approach to SVB’s failure guarantees duopolistic banking risk concentration in a handful of SIBs. My back-of-the envelope review of SVB’s balance sheet suggests that even in a liquidation, depositors should eventually get back about 98% of their deposits, but eventually is too long when you have payroll to meet next week. So even without assigning any franchise value to SVB, the cost of a gov’t guarantee of SVB deposits would be minimal. On the other hand, the unintended consequences of the gov’t’s failure to guarantee SVB deposits are vast and profound and need to be considered and addressed before Monday. Otherwise, watch out below.

[Brad Svrluga @bradsvrluga]

I'd like to formally thank my peers in the venture community whose stellar leadership over the past 48 hours triggered a run on deposits at Silicon Valley Bank, ultimately toppling one of the most important institutions in our ecosystem.

[Tyler Bliha @tybliha]

That’s a 2.5% claims to premiums ratio (IE “loss ratio”), which is outrageous.

For comparison, typical loss ratio on car insurance is 70-80%

[Tyler Bliha @tybliha]

This is big news if true
https://t.co/2EN2DIZ2Mu

[Tyler Bliha @tybliha]

“According to ALTA, title insurers brought in $17.6 billion in title premiums during the first nine months of 2022, while paying out just $438.7 million in claims during that time period.”

[Tyler Bliha @tybliha]

Someone needs to fix this. Answer is not “time” and probably won’t come from Fannie/Freddie

[unusual_whales @unusual_whales]

First time home buyers face the least affordable market on record, per Bloomberg.