David Friedberg & David Sacks on the Gravity of the SVB Collapse
“This is basically a Lehman-sized event for Silicon Valley…Unless the Fed steps in here over the weekend, we’re going to see potentially a run on the regional banking system — a cascade like we saw in 2008.”…
There is $2.5T in reverse repo because the banks don’t have anything better to do with that liquidity right now.
This is not going to create a Lehman moment for anyone but Silicon Valley and its collection of unprofitable startups that need regular injections of easy money financing that is surprisingly not as available when rates start to approach reasonable levels.
Feels very much like the rate hikes are working as intended and the people who kept convincing themselves a pivot was right around the corner are learning a valuable lesson about prudent risk management.
