But it is never a one-shot game. It is now a fact that “capital firms Peter Thiel’s Founders Fund, Coatue Management, Union Square Ventures and Founder Collective all advised their startups to pull their cash from the bank”.
Valley is small. There is real loss of wealth now, because SVB is no more. And there’d be likely a ripple effect.
I suspect, there will be a bailout. Silicon Valley has very good relationship with the current White House. It would not be a stretch to make the case for a bailout. All the Government has to do is to provide $10-$30B (?) worth of liquidity of the next 2 - 3 years, until the rates will go down. Then, they could sell the whole fixed income portfolio.
The very strong argument for a bailout is if there isn't one, every company will look very hard at where their cash is, and shifting it around could cause more bank runs. With how fast this went, there needs to be something concrete on Monday.
Valley is small. There is real loss of wealth now, because SVB is no more. And there’d be likely a ripple effect.