Bank Go Bye Bye

it was so funny watching Linus go through the stages of annoyance with realising that he has to now talk to accounting about it.

Land banks are frustrating for the middle class who are struggling to get houses these days. Not to mension any ammount of land. Sitting down and learning business with Linus would be so interesting

"Assuming we pay minimum wage, which we don't" - Mr. Tech Tips

FYI, the FDIC stepped in and provided the funds so that all of the deposits would be paid in full, with the funds available on Monday. The shareholders and owners of SVB are not included in this though and they will be paid out through the likely liquidation after other debts have been paid.

Land banking has had negative effects here in New Zealand. In every city there are 'ghost houses' which are perfectly livable but remain vacant because the owners are speculators or land bankers and do not want tenants. Most arable land is used for agriculture, dairy farming or forestry here so the land bankers target the cities. Some small towns entire main streets are vacant because land bankers buy up the CBD and hike the shop rents so that they are unsustainable because they don't want to be landlords. It has its own set of social problems.

This is why, if you have significant ones, you need evenly distribute your cash holdings between multiple banks. Not necessarily to insure it all but so that you can survive a few months.

The lightly whispered "w-we we don't pay minimum wage" at 3:33 was so pure. Honestly love Luke so much

Dang, at around the 19 minute mark Linus showed exactly why he is so much more respected than most rich people.

And the craziest thing was, this wasn't the most suprising thing that happened this episode

That happened to my parents. They had a part of their savings in a bank that went bust in the late 80s. It took them TWENTY-FIVE YEARS to get something back, and it was about 5%. Like I wasn't even been born when their money went poof. Some of the people in the queue had invested their life savings and got enough back to buy a second hand tv

Seeing Linus' take on this is actually super interesting. Also I genuinely thought the part of the reasoning for the lab was to use it as a land bank. I'm genuinely shocked he's only recently learned about that.

Did Linus just do the Lex Luthor speech from Superman Returns? "You can print money, manufacture diamonds and people are a dime a dozen, but they'll always need land. It's the one thing they're not making any more of."

The SVB thing hits hard. My former company used SVB heavily for all of our US and foreign accounts. Our Director of Treasury finally started moving us off of SVB to Wells Fargo and HSBC mostly, because SVB didn't have enough enterprise features. Then we were acquired for $15+ billion and the money has been mostly moved out of SVB... looks like a great thing these days.

Fun Fact: No one's bank has enough liquidity. That's how Fractional Reserve Banking works. You put your money in, they lend it out. Doesn't matter if you have over or under $250K.

A lot of companies in the SF Bay Area used SVB as their payroll bank because it was the preferred Bank used by several of the payroll processing companies.

Linus is slightly misinformed on how it does not affect Canada. SVB has a branch in Toronto

By the time this clip went live, the situation had changed enough that all of the actual information in it was out of date and not relevant :D
Current events be crazy.

You know it’s a bad day when you go “fuck I have to talk to accounting!” 😂😂😂

In the UK, The gov and the Bank of England, stepped in over the weekend with HSBC. HSBC has bought the UK arm of SVB for a symbolic £1. That means UK users of the bank are fine. But they all had a terrible weekend before that was announced on Monday.

SVB bank going down directly effected me. I work for a tech company that acquires failing retail business, and converts them to digital markets.
SVB effected all of the brands under our umbrella.

Luckily this year regulators said Canadian banks need more cash on hand. (That’s why they were offering good GICs)

When the boss doesn't know what minimum Wage at his place of Business is, you know he is a good boss!

I would argue you are in the best position ever since you just spend a ton of money and essentially minimized the potential loss through this very well.

I know people dont read books anymore but this is why everyone should read "creature from jekyll island"
Its about the pyramid sceme aka fractional reserve banking, the fdic and modern lending. Its a insanely informative book and will also explain where to put you money to keep it safe from insolvency.

It’s crazy though that some big clients actually got ALL their funds out before

I hope they do a follow up next wan show, it's pretty interesting

So in America we have Bank Protection Agency that take hold of the Bank and Try to put things inline before it goes Bankrupt. So Most likely the Bank was already dealing with the Bank Protection Agency before anyone knows about it.

21:09 "Imagine I bank at HSBC"and that's when you know he's not imagining it in Europe 🤣

I'm sat laughing at Linus when he says he doesn't pay minimum wage, it sounds like he pays below😂

The thing with SVB isn't even surprising. What's the amount of money that banks are required to hold on reserve in ratio to their total assets/deposits held? I remember it dropped to obscenely small amounts in either 2020 or 2021.

My wife's company, which is a billion dollar company not a "startup", had a significant amount of money in this bank. While they were relieved that they were given access to all of their funds, they had the liquidity and the profits to be ok. Not everyone would have been so lucky.
Talking about "land banking?" Bill Gates is now the largest private land owner in the US.

In germany (or maybe europe entirely?) the ensured liquid value per Customer per Bank is 100k€ by law. That said, it only applies to the LIQUID value. Which you should not stack so high anyways (relative to your personal/business value) so.. it's absolutely fine imho.

Whether you're a business or an individual, the old saying still stands. "Don't put all your eggs in one basket."

Here we go, let’s see if they’re brave enough to upload the clip we all want to see 😈

Damn, with this burst, it's gonna have a HUGE knock-on effect for tech development. We experienced the leap of VR/AR this last decade. After this, we are gonna have to wait another decade at min before we have enough support for another big leap in tech in the west.

I could watch Linus present literally anything

This won't be the only bank to fail in the coming years. Buckle up, bois!

"I have to talk to accounting." Translation my wife is going to yell at me for an hour for revealing company finances... Again

So if the unit you were looking at is using that as a land bank, what's stopping you from renting it? Cost I'd guess?

The FDIC uses insurance premiums paid by all its member banks and funds from selling the insolvent bank's loans to other banks, to cover the funds. Most banks have much more out in loans than deposits. The FDIC has announced they they will be able to cover all insured deposits for SVB customers without using taxpayer revenues.

Uh... my dude just saved his bro from a Ye moment. Luke deserves a special parking space yo!

I saw it reported that Roku had a single checking account at this bank to the value of about $487m dollars lol. That sounds smart.

I met someone today who works in a company that banks with SVB UK so it is quite a big economic situation.

I’ve not seen anywhere else mention this, but the arm of SVB in the UK was sold to HSBC for £1 (1.22$ USD) after all night of talks a day or so after the collapse, to keep the tech startups in the UK safe!

Ownership type is a weird one, because they're not talking about, say, checking, savings, money market, etc. What they're talking about are their own ownership categories, which includes single accounts, joint accounts, revocable trusts, etc. So, what this means is that if you're a married couple with, say, a million dollars in cash (hopefully you have other money invested, otherwise that's really irresponsible at that level). You could have, at one bank, a Linus owned account insured up to $250K (it could be checking, savings, or if you have both, they combine them in total value), you could have an Yvonne owned account insured up to $250K (same), but you can also have a joint account owned by both Linus and Yvonne, insured up to $500K because the insurance stacks between the both of you. So within one bank, you can easily deposit a million dollars as a married couple with combined finances and stay insured. It gets better because if, say, Linus and Yvonne had $250K for each of their four kids, they could setup trusts at the bank for each of their kids, let's say revocable trusts or something, meaning that they could be insured for up to $2 million dollars. They could even just setup savings accounts for their four children, and those could be insured for $250K, meaning at a single bank Linus and Yvonne could have an insured amount up to $3 million with enough finessing. My father recently reorganized his cash in the midst of this because his bank was considered vulnerable, now everything is FDIC insured, and it's more than $250K. Even better, there are banks with services where they spread those $250K or $500K (for joint accounts) amongst several banks, but where the initial bank controls it. This is one of the ways that people with many millions in cash store that liquid asset (while people claim rich people have no cash, this isn't true, they may have anywhere from a million to tens of millions in cash, depending on their lifestyle and liquidity needs, especially in terms of paying for taxes).
Granted I used Linus and Yvonne, and they're not banking with US banks (though if they were banking with a US bank for some reason, they would be covered by FDIC; it's an aspect of the bank, not the citizenship of the depositor), but this is really important information. In fact, it's information that if more people understood this, and I mean upper class individuals with more than $250K in cash, not businesses, then the runs on the bank could be mitigated to some degree. Business and investment clients are going to be the primary cause in some cases, but seeing people lining up at ATMs and outside banks to pull out cash will add up and cause liquidity issues in the long run. Generally businesses aren't going to a bank to setup a transfer of funds, they call their agent or an agent.

vercel gained my respect after this lol, definitely gonna use their platform to host a website now

I work for one of the larger banks in the US, and my brother works in tech for Microsoft. He and I are both worried suicides are going to spike right now due to SVB failing and some businesses losing everything and some people losing everything. A bank failing destroys lives.

Canadian banking is essentially one company look into the intertwined network of stock ownership behind the main Canadian banks

This is such an important topic. My guess is everyone will have to deal with this soon...

the FDIC took over the bank and has made a new bank ran by FDIC in hopes that they can sell it to another stable bank. BUT the funds in deposit accounts were being made available to the former SVB bank.

This is all time funny 🤣🤣🤣 Dan chiming in made me laugh 😂😂😂

Linus' lawyers must've been sweating waterfalls watching this...

2023 is the year of Linus having financial realizations on air.

I like that Linus makes it abundantly clear that LMG doesn't even pay minimum wage.
I guess that explains why the employees steal so much stuff. /S

Linus, near the end of this clip you said something about the government being at fault.
As you stated, SVB was 16th in size in the United States. You'll find that we're very similar down here, as SVB wasn't on anyone's radar in the US until last Friday.
Fun fact, SVB is a bank small enough to have gotten deregulation from the Trump administration. So, you are right! 😂

I think the safest way would be to spread your funds among multiple banks. 4 banks, you said? That's 3 banks more than he amount of banks you have your money in.

Something Linus forgot to mention, setting up corporate business account that is international is a gigantic pain in the ass. Especially international ones. Which very few banks can even operate. They would also demand records, which SVB is not likely to give you.

Would that payroll software startup happen to also be the one that was hacked about two years ago?

"We do not pay minimum wage" Sounds like a spicy out of context clip to me lmao

"You just buy land, because cash" - Linus

That explains why I've seen so much interest in precious metals. Housing markets collapsing and regulations affecting markets. I've seen some holdings in stuff like PTLM and stuff that make me nervous. When money moves something is going to happen.

This is not over. I hope you guys got backup plans.

Some dude I know just bought a piece of land to park some money back in the day and like 20 years later Dollar General came to him with an offer to buy it, because it was in a semi rural area right off the highway and paid him 2.3$ million dollars for it. It wasn't a ton of land either. Maybe an acre or two. Land always appreciates in value. They aren't making any more of it and if your area is growing and becoming more prosperous then that can raise the property value a lot. My mother bought her house back in like 2015 for 80k and now in 2023 it's worth 180k. More than doubled in value in just 8 years.

Depositors are guaranteed full protection by the treasury and the FDIC in this instance, they announced it I think yesterday. Shareholders, not so much.

Credit Suisse, the second largest bank in Switzerland, is currently facing the same issue. They even had to borrow money from the Swiss bank to make sure investors don't pull out like they did with SVB. I don't know what's happening, but it's not looking good for the economy

20:57 Linus missing the beep 😂

I think it be cool if he looked at all the tech in a yacht!

At work, I see some invoices passing by, and some "checks" comming in. One of the invoice was about 350k$, and those invoices come in every about 6-7 weeks! And 150k$ deposit is weekly.
250k$ for a business is really not much at all.

Even with all this I’m still 100% against bail outs.

The points around the low returns offered by various assets classes are valid. It's a consequence of this prolonged, low interest rate environment which persisted, somewhat nonsensically, after the GFC. There will pain until a new steady state is achieved. And things such as banks with poorly managed balance sheets and a gross lack of proper risk management will fall.

saw a notice recently from Etsy that payments to creators are going to be delayed due to the SVB closure.

Fuck no wonder land prices suddenly shot up the last couple weeks in my area.

Good news on the SVB line: the FDIC as stepped up and stated that they will garuntee 100% of the funds from customers of SVB, the investors in SVB are SOL but the companies with money stored in the bank will get that money back out of the FDIC pool even over the $250k limit

I read today that HSBC has bought the UK arm of SVB for just £1.

We need an "I'm on a boat" music video from the LMG crew 😂

Well, if I didn't doubt my odds of getting a house before, I sure do now.

It’s so refreshing to hear Linus swear lol

That's why many countries in EU won't sell you land without warranty from buyer that they will build a fully functional house / warehouse / etc. within some period of time, otherwise you will pay a huge fine. So land banks here must go above just buying a land

Another important thing to note is companies out of that bank that were paying operating expenses and payroll on lines of credit..

Luke just wants a good gaming PC.

(Canada) My understanding about credit union and their protection, it's not that they have no limit on how much is insured so its better for you, it's that there is no ceiling OR floor. If the credit union defaults, you might get back a lot more than what the CDIC insures with banks (100k per person per bank per type of account) OR you might get much less, you'll get what they CAN give you back since there is no federal regulation

Wasn't a withdrawal limit put into place to stop bank runs from happening???

The moment Linus realised that the money they pays for his sponsor spots is probably in svb

all bank accounts in canada are insured up to at least 100k some credit unions are 250k so yeah if this happened here (very unlikely many harder rules to prevent this stuff) yeah he would be so done since you would like 10 to 20 accounts to even exist.

WHoever named this video, You made me laugh out loud, Well played... well played.

14:46 "SVB experienced a bank run, they're like gone essentially " "oohh...."

People should be so scared of mandated government digital currencies that are coming. This is what we’re facing

3:22
Linus: "How many people work here? does anyone knows what minimum wage is here?"
his friend : "we....we......we dont pay people"

Well Signature Bank also went bye bye yesterday

We don’t have only four banks in Canada. We have the Big 6 national plus regional banks, digital banks, credit unions, and approved foreign branches…that being said, this implosion is a mighty deal. Hopefully the aftermath all gets sorted out. Deeply concerned

A 'bank run' is what Cosmo talked about in Sneakers.

Lol, just googled it, didn't know that there were like 2 Germans for every Canadian. Thought you guys were way more.

Let’s go LMG clip time!

I mean, If I owned a company and the bank just died and all the companies money was gone I would probably just run faster than my employees 🤷.

Linus be like: no but we are ok because we have money coming in constantly, not like the people who give us money that probably... are... affected by this.......... oh f*ck if they don't have money we don't... I have to talk to accounting.

"So let's assume we pay minimum wage, which we don't" That sounds terrible out of context 🤣

All of this is ammunition to start LTT bank, in Surrey B.C. Slightly more seriously, all banks operate on trust, and LTT is trust farming. I don't know if Linus knows what he's got

SVB was like the starting to a domino which has now brought down New York Signaure bank and Silvergate as well

it did happen because of the government because they changed bond return rates and svb had a lot into bonds.

You buy land because cash... Thats Linus traveling to filantropic territory right here lulz