Purpose

The purpose of this newsletter is to provide a one stop shop for news and information that is relevant to any household regardless of income, location, or political affiliation. The news/information provided in each newsletter will be focused on American Policy (both federal and state), American business/economy, and anything in or around those spectrums that might effect the everyday household. Our goal is to supply a newsletter once or twice a week highlighting important events within a condensed format. Unlike this paragraph, most of the content will consist of bullet points, screens shots, and simple explanations. This newsletter should take anywhere from 5-10 minutes to read and should give you the information you need to stay up to date in this fast-moving world.

Now to the news…

Silicon Valley Bank (SVB) hit its financial doom.

Over this past week, SVB informed its depositors that it wouldn’t be able to pay it’s withdraws after rising interest rates caused a massive loss in some of its bond investments.

Some of the highlights:

• Only 2.7% of SVB deposits are less than $250,000. 97.3% aren't FDIC insured.

• SVB CEO, CFO and CMO sold +$4.4MM in stock over the last 2 weeks.

• SVB took a $1.8B loss on its bond portfolio.

• As of now, $170 billion in deposits at SVB remain uninsured.

• The Fed and FDIC said they are considering guaranteeing uninsured funds.

• 50% of all VC-backed startups in the U.S. have exposure to SVB.

List of a few VC-backed startups with exposure:

1. Circle: $3.3 billion

2. Bill․com: $670 million

3. Roku: $487 million

4. BlockFi: $227 million

5. Roblox: $150 million

6. Sunrun: $80 million

7. Ginkgo Bio: $74 million

8. iRhythm: $55 million

Elephant in the room:

The major issue, outside of depositors losing money, is the “run” this could cause on other healthy banks.

On Sunday, the FDIC has been brokering an auction of SVB to a few major banks in hopes of getting the depositors their lost money and putting to bed the idea of a potential run. However, if no deals come through the Fed and FDIC plan on taking matters into their own hands.

Best case scenario is a major bank buys SVB and the government doesn’t have to use taxpayer dollars (your money) to pay for SVBs bad investments.