Not Big Enough To “B”

Silicon Valley Bank has collapsed under the weight of a terrible technology market. The California based bank had about $200 billion in assets, but shut it’s doors and is now under the auspices of the Federal Deposit Insurance Corp. And for those of you that remember back in 2008, the collapse of the banking system due to the Democrat inspired sub-prime loan debacle, you’ll probably harken back to George W. Bush’s time in office, when Ben Bernacke convinced him that banks like Citi, and Bank of America, and Capital One, and Wells Fargo were “too big to fail”, and needed to be bailed out.

Nothing like that is going to happen to Silicon Valley Bank.

Janet Yellen isn’t someone I normally give kudo’s to. She’s as liberal as the day is long, but she has made the right call on this one. Silicon Valley isn’t too big to fail. And it’s not big enough for a federal bailout. You’ll remember, that caused a massive recession (dubbed the Great Recession) back in 2009. It led to the federal government taking over companies like General Motors, and giving others like Chrysler a huge influx of cash. Airlines needed bailouts. Pretty soon, everyone had their hand out. And we sat back and watched the newly installed Obama regime gladly pass out money like they were passing out candy to a four year old.

So, I congratulate Yellen on her financial ability to say no. She does get the credit for this one. And while it was the correct decision this time, it should have been the correct decision back in 2008. No company in America should be too big to fail. And since that time, I personally have refused to do business with any of those banks that took bailout money. In fact, when my mortgage was sold to Wells Fargo, I immediately paid it off. They were a little surprised that they were basically going to lose money on the deal and asked why I would do that. I told them I don’t do business with banks that should be out of business…and yours should be out of business and your CEO jailed for robbing the American people. They didn’t like my response.

My view on business is simple. There are no guarantees. I don’t care if you’re a mom and pop store down on a busy street corner selling carrots, or if you’re Microsoft. It doesn’t matter. You have a duty to those people that rely on you staying in business, whether it be your family, or shareholders, to do what’s right. In the banking industry, they got screwed over when Congress decided that it would be a neat thing for everyone in America to own their own home. The banks didn’t fight it because they were now able to make loans to people at a much higher rate. What they didn’t count on was the fact that these people couldn’t afford the loans in the first place, and would end up defaulting on their obligations.

Seeing how the FDIC and the state of California has stepped in to oversee both Silicon Valley Bank, and Signature Bank which also collapsed in the mess, there will obviously be those that have been crying for a bailout that will be disappointed. The problem is that if you start bailing out these banks that fail, rather than give the customers their money bank that was insured by FDIC, then you’re doing exactly what conservatives are fighting the Biden administration over with the student loan debt.

Silicon Valley Bank took a risk in getting so heavily involved with the technology sector. They didn’t diversify into other areas that could have stopped their collapse, had technology been only one area of investment. But they went whole-hog to the tech sector, and it ended up costing them everything. That’s the nature of business. It IS survival of the fittest. Maybe this time, banks will learn that lesson once and for all!

Carry on world…you’re dismissed!

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