5min chapter

The Compound and Friends cover image

The Bank Run of 2023

The Compound and Friends

CHAPTER

How Much Liability Does Management Have for Not Having More of the Money?

Samir: This is a function of first and foremost, the pandemic, making the Fed take extraordinary measures. They left ultra low money policy interest rates at zero for way too long. And then they went from 150 miles an hour to jamming on the brakes and raising interest rates to the extent that we've never seen. So during 2020 through 2022, there was a venture boom. Silicon Valley bank is at the epicenter of Silicon Valley banking per the name. Its balance sheet effectively tripled in under two years. The problem was their companies were not starved for money,. These are venture bank companies and I'm more careful than know what to do with.

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