and titans many charged with being woke, but the fact of the matter was, it was a bank that made the wrong bet on treasuries at the wrong time and bought tens of billions of those, the price of treasuries went down and flat-footed while people wanted their money. now it s in receivership and run by the federal deposit insurance corporation. it s a dramatic played out amidst talk there could be other problems out there. kelly o grady has more from los angeles. kelly. good morning to you, neil. yes, it s the second biggest banking collapse in u.s. history. the first major one since 2008 and it all happened in the span of 48 hours, what started this is svb found its self short on cash. the stock was plummeting. invests warned they might not be able to raise money and a bank run and loss of clients and simultaneously tried to withdraw fund. and the regulators have taken over it and insured depositors will gain access by monday. fallout could be dire. roughly 50% of venture capi
state regulators wasting little time to take possession of silicon valley earlier today before a sudden cash crisis risks becoming a bigger one. then just as quickly reassuring investors their money was safe. the fdic taking control of silicon valley bank s deposits and letting customers know that they would have access to their funds by monday morning. it was all meant to avoid a run on the deposits and one that could spread. neither happened today. janet yellen said she was watching silicon and a few other banks she didn t name very carefully. other government officials stressing that silicon s case was very unique. in the case of silicon, it happened very fast after announcing a big loss on the bond holdings earlier this week. most of the bonds were bought long before the aggressive rate hikes that began almost a year ago. meaning those investments were underwear as bond prices declined and silicon was struck. today s strong employment report showing a bigger than expected
some are hoping that a white knight might swoop in. and elon musk said could look into a digital bank. and most banks have been under tighter safeguards since 2008 and svb was making that on bonds. i used to work on the that side and we were wondering when the bubble would burst. neil: thank you. kelly on that. shark thing was telling me that he thinks that this is not a fed problem that this was unique to this bank, so it s silicon valley bank problem. take a look. the reason this bank went to zero is very old-fashioned reason, poor management.
possible leveraged or behind the eight-ball banks and we hear that big money center banks are a whole lot more capitalized than back then. what do you think? obviously, this is an important lesson for every company, not just startups and venture communities. this is a highly speculative portfolio. i m not blaming the fed, i m blaming management. i ve told my portfolio companies, i do not want to see more than 20% of our liquid assets in any one institution. people felt that way about bear-stearns and lehman brothers. banks blow themselves up all the time because of weak management or management mistakes. neil: all right. so, could there be something systemic here? obviously, a lot of nervousness before the markets open on monday. wall street skid more than 300 points yesterday. for all at wall street, the worst week of the year thus far and it s been a bumpy year thus far. let s go to the case capital
so we know that banks that might have runs on them where they have very concentrated types of clients, where all of their clients are going to need money at the same time, there are those banks that are at risk, and fortunately, we know that wall street has already identified those few banks and obviously, it s all about deposits. you do have to put your money somewhere and so much like kevin o leary said. if you ve got your cash spread across five different banks we won t have the massive runs pause because we re talking about actual cash not loans like in the 2008 crisis. it s different in how the banks manage those assets. neil: you know though, kenny, what s to stop people in a regional sized bank or mid sized banks not that there s something wrong, well, maybe i need to be in one of the big money center banks, a lot more