Roku said it had $487 million of cash out of a total of s $1.9 billion in uninsured deposits at SVB which was placed into federal receivership on Friday, according to a SEC filing.
Having run a few businesses in my time, I can't say leaving your cash pile in an uninsured account is a wise move. Generally you want your cash where it's safe. If the account has to be uninsured you watch it like a hawk, and know how to move it out quickly.
There is no substitute for paying attention to the fundamentals.
Janet Yellen and all her underlings are partly to blame. They are the same people who fail to acknowledge that cryptocurrency is simply counterfeit US dollars.
Certainly there will be questions as to why bank regulators did not identify the weaknesses in SVB's balance sheet before now.
However, SVB's failures have absolutely nothing to do with the merits and demerits of cryptocurrency, either as an asset class or as a potential currency alternative to existing fiat currencies in the marketplace. For that matter, even the Silvergate collapse says less about cryptocurrency and more about the efficacy of banking regulation in the United States.
I'm not sure crypto advocates are generally known as fans of regulation. The original Bitcoin whitepaper advocates blockchain as the basis for a currency that is wholly independent of all government control (and thus government manipulation).
And yes, "government efficacy" is almost always a contradiction in terms.
So if your company needs to hold hundreds of millions of dollars for immediate use, what is the safer practical alternative to a bank? Do you buy TBills and hold them directly in an account with US Treasury? Do you trust a brokerage and SIPC insurance? Do you disperse among hundreds of banks so insurance covers you?
I would question how much cash Roku needs "for immediate use". Without looking deeply into their financials I can't be certain, but I have to question how much cash they really need on hand.
But if you're parking a couple hundred million in an uninsured account, you keep tabs on the bank that has won your business. SVB's cash crunch didn't just happen.
Interest rates have been rising for a year. Just as with Silvergate, if you look at SVB's financials, there were almost certainly warning signs.
Contrary to what the media is putting out, this is not a GFC replay.
Timing. Comedians know its importance.
Banks cannot take money from those to whom they promise instant access to their funds and tuck that money away into a 5 or 10 year maturity.
Timing.
One day maybe all energy will be in the form of sunshine, wind and electricity. Meanwhile. Timing.
Biden and John Kerry, et al cannot crush fossil fuels on a dime.
Timing.
Janet Yellen and all her underlings are partly to blame. They are the same people who fail to acknowledge that cryptocurrency is simply counterfeit US dollars.
Certainly there will be questions as to why bank regulators did not identify the weaknesses in SVB's balance sheet before now.
However, SVB's failures have absolutely nothing to do with the merits and demerits of cryptocurrency, either as an asset class or as a potential currency alternative to existing fiat currencies in the marketplace. For that matter, even the Silvergate collapse says less about cryptocurrency and more about the efficacy of banking regulation in the United States.
Yet crypto advocates keep begging for more and more onerous regulation. Then everything will be copesetic. I think not.
Government and "efficacy" are oil and water.
I'm not sure crypto advocates are generally known as fans of regulation. The original Bitcoin whitepaper advocates blockchain as the basis for a currency that is wholly independent of all government control (and thus government manipulation).
And yes, "government efficacy" is almost always a contradiction in terms.
It's obvious that crypto advocates are using regulation to "get their camel's nose under the tent."
But government and crypto will not be bedfellows in my lifetime. (Granted. I'm old.)
So if your company needs to hold hundreds of millions of dollars for immediate use, what is the safer practical alternative to a bank? Do you buy TBills and hold them directly in an account with US Treasury? Do you trust a brokerage and SIPC insurance? Do you disperse among hundreds of banks so insurance covers you?
I would question how much cash Roku needs "for immediate use". Without looking deeply into their financials I can't be certain, but I have to question how much cash they really need on hand.
But if you're parking a couple hundred million in an uninsured account, you keep tabs on the bank that has won your business. SVB's cash crunch didn't just happen.
Interest rates have been rising for a year. Just as with Silvergate, if you look at SVB's financials, there were almost certainly warning signs.
Contrary to what the media is putting out, this is not a GFC replay.