Silicon Valley Bank: Don’t Yawn
In this video intrepid financial personality Jim Kramer is caught in February saying that Silicon Valley Bank (SVB) is a boring investment idea. He says, “Don’t Yawn” as though it’s such a simple business model the unsophisticated viewer might fall asleep.
He goes on to say the “stock is still cheap.” A tacit endorsement or recommendation in my mind at least.
Here’s the video I’d like you to watch: https://www.youtube.com/watch?v=3vkZMbTdV3Q
Ask yourself a few questions:
Why would Jim Kramer give SVB the thumbs up on CNBC mere days before it’s collapse?
Should you listen to him or anyone else on TV regarding single stock recommendations?
Did he know something we didn’t know?
Was he given that recommendation by powerful media counterparts whilst other powerful people were withdrawing their money?
Was he aware that Silicon Valley Bank’s CEO, Greg Becker, was on San Francisco’s Federal Reserve Board? Did he place undue trust in this cozy relationship?
Was he aware that the Federal Reserve Board was also in charge of supervising SVB?
Have you ever had to take your golfing buddy’s business into receivership? Is that an easy thing to do? Would you maybe give a colleague the benefit of a doubt.
Did Jim Kramer realize that Kim Olsen, SVB’s chief Risk Officer oversaw the downgrade of Deutsche bank credit ratings in 2007 and 2008?
Normal financial advisors are out there scrambling to keep their clients from panicking over exposure to SVB. “No Mr. Client we do not custody assets at Silicon Valley Bank and you don’t own their stock,” they say. That’s reasonable and accurate.
I don't know of a better financial system than laissere-faire captalism. However, I also have never seen it in action. Instead I see a government/corporate partnership that creates an adversarial situation for retail investors when things go wrong. My job is not to instill confidence but wake up to the strenghts, weaknesses, opportunities and threats that are systemic to the financial landscape we have created.
I'm supposed to answer your questions.
But instead of answering questions to make people feel safe and cozy and sleepy, I say, “Don’t yawn.”
If you’d like to ask me some questions or have answer to my questions above, holla at ya boi, click here.