A Reverse Minsky Moment

This week the Silicon Valley Bank (SVC) collapsed in what looks like a good, old fashioned bank run / panic. But why SVC and why now? It seems VC funding is down 30% from last quarter and 50% from last year according to Forbes. So all of these startups are still spending but not getting new funding. For SVC this means lots of withdrawals and fewer deposits. Not a disaster, but something that could trigger a panic. This might be more true in a highly connected group that closely watches such financial information, like Silicon Valley venture capitalists.

Is this a one-off? I hope so, but the Irrelevant Investor has concerns:

The Fed has been trying to break things. Mission accomplished. They broke tech and housing and startups. How much more damage do they want to do? We’re starting to see cracks in the commercial real estate market too. If that goes, forget about it.

A Reverse Minsky Moment