Quick Simple News for people with no time: Silicon Valley Bank Collapsed
Today's financial markets are on FIRE.
Here's the gist of it:
Silicon Valley Bank made a very poor asset allocation by putting all its money in bonds. Bonds that are now worth less than the inflation.
So VCs forced startups to withdraw money from the bank. VCs also have an angle of shorting the bank stocks and opening up lending services to SVB.
Win-win for VCs, lose-lose for SVB.
That's why they say "Cash is king", it is the best cushion for uncertain economic times. SVB is in this deep hole because they have no liquidity, all its assets are locked into these bad bad bonds.
So when an emergency hits, guess what? Whoever has the liquidity wins.
If you don't want to get into a similar type of situation, I've created a blog post on risk management and Why Everything You Know About Risk is Wrong.
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