Greetings to all the new subscribers who showed up after Bill Simmons posted about last week’s Rubesletter:
Welcome aboard! I’m a big BS fan so it was neat to see that. As a special treat, here’s a 20% off subscription offer:
And just for y’all, I squeezed in mentions of Stephen A. Smith and the Greek Freak below. Onward!
My big question to all these tech bro Libertarians re: this Silicon Valley Bank stuff: What would Ayn Rand say we should do?
Riiiiiiiiight, got it.
See, things are feeling hyper-hypocritical in Silicon Valley nowadays…
VC’s: “Move fast and break things!” *
* My venture capital firm is not liable for any damages resulting from this statement. In case of any damages or liabilities arising, taxpayers, insurers, and/or employees will be fully responsible. However, if profits result, they're all ours to spend on Patagonia vests and private jets. Pretty sweet deal, eh?
Sure, the government did the right thing and it’s good that SVB startups can meet payroll now. But it was still weird to see all these “no more regulation” Vampire Capitalists begging for government intervention. They acted as if they were merely sticking up for the little guy who wants to pay employees, but c’mon, does anyone really believe these guys ever look out for anyone but themselves?
It sure did happen fast. In fact, the SVB crash felt like the Gamestop pop in reverse. The mob can spiral things up or spiral things down within hours now. Reality doesn't even matter. If everyone believes it, it becomes reality.
“How did you go bankrupt?” Bill asked.
“Two ways,” Mike said. “Gradually and then suddenly.”
-Ernest Hemingway’s “The Sun Also Rises”
In this case, a Slack channel of Thiel-loving Silicon Valley elites panicked, caused a bank run, then turned around and started acting like heroes. It reeked of "No one should ever get bailed out, except for us because people depend on US. Also, you’re welcome."
Capitalism on the way up with socialism on the way down ain’t nothing but a scam. We’d all love to order the reward, hold the risk. But some of us don’t get to go off menu like that.
Who do these fat cats blame? The government because it didn’t give advance warning that interest rates would go up…
And VC David Sacks argues it's Biden's fault:
It was the fed and the Biden administration that created this unprecedented inflation. They overheated the economy and then slammed on the brakes and created all of these toxic assets at all these banks, not just SVB, but across the country...So this idea that VCs had anything to do with it is ridiculous, what we were doing was noticing we have a huge problem here, and we need to jump on this.
Is the idea here that all these John Galtophiles didn't clock interest rates might rise after massive handouts during lockdown – and it's the government's fault for not telegraphing when/how much it was going to raise rates in advance? Isn’t this like Bill Belichick complaining his opponents didn’t give him their playbook before the game?
I’m an econoputz and even I knew the government spending billions on PPP “loans” and sending $1,400 checks to every American was gonna lead to some inflationary blowback. If you’re a biz whiz putting hundreds of millions of dollars in a bank, shouldn’t you do some due diligence on making sure it’s not making a crackpot bet on interest rates staying low forever?
But hey, at least all the Silicon Valley Bankers who created this mess received their bonuses:
As Stephen A. Smith would say, "The temerity...the unmitigated gall!"
“Rugged individualism and capitalism on the way up, privatizing the gains, then ‘we’re all in this together’ on the way down, as we socialize the losses with bailouts.”
Meanwhile, investor Andy Kessler, in the Wall Street Journal, “is not saying” diversity was the problem at SVB, but, well, here’s what he did say:
SVB notes that besides 91 percent of their board being independent and 45 percent women, they also have ‘1 Black,’ ‘1 LGBTQ+,’ and ‘2 Veterans.’ I’m not saying 12 white men would have avoided this mess, but the company may have been distracted by diversity demands.
Phew, glad he didn’t say it. Also: Those damn veterans! Gotta put a stop to ‘em lol. Anyway, I’m not saying this guy’s a prick who sounds clueless, but he may have been distracted by racism.
Regulators, saddle up!
I asked a smart tech guy who understands all this better than me for the smart p.o.v. on SVB and he sent me a link to "The Banking Crisis: More Kicking the Can" by Albert Wenger, partner at Union Square Ventures. Plenty of wise words there. However, the inability of tech execs/VC’s to ever absorb blame for anything is irksome.
Wenger argues, “The cause was senior management at SVB grossly mismanaging the bank’s assets.” I buy that, but again, shouldn’t all these genius VC’s and tech execs have known better? If a class of people can be hoodwinked en masse that easily, how smart are they really?
Also, it’s rather rich to say this: “If regulators had done their job here they would have intervened at SVB weeks if not months ago and forced an equity raise or sale of the bank before a panic could occur.” Tech/finance folks constantly argue AGAINST more action from regulators. In fact, they seem to oppose all government intervention.
So it’s eyebrow raising to hear this “regulators, saddle up” view from the same people who constantly rage against Elizabeth Warren and Bernie Sanders, seemingly the only not-paid-off-by-lobbyists-and-special-interests-voices arguing for consumer protections. It’s not that VC’s are wrong about wanting regulators now, it’s the hypocrisy.
Flashback: On the eve of the Senate vote to roll back critical parts of Dodd-Frank in 2018, Warren warned, “Washington is about to make it easier for the banks to run up risk, make it easier to put our constituents at risk, make it easier to put American families in danger, just so the C.E.O.s of these banks can get a new corporate jet and add another floor to their new corporate headquarters.” Hammer, meet nail.
How Silicon Valley turned into the Yankees
The toxic reaction to all this feels like a reveal on how much the tech world has lost traction with the masses. Tech used to be run by dorks, bloggers, designers, and coders. Their goals seemed aspirational. Now the faces of tech are wannabe influencers, MBA’s, VC's, and crypto guys with 🚀 emojis in their bios. Their goals seem purely monetary. It comes off as gross.
Perhaps this is the final straw in finance’s takeover of tech. Decades ago, Wall Street guys ruled the bro roost. Then, everyone started to hate them so they pivoted to “working in tech” because it sounded more appealing.
The masses have finally figured it out though. You can change the title on your business card, but if you’re the kinda guy who quotes the “always be closing” monologue in Glengarry, the world eventually catches up to the douchery. No one’s fooled by Silicon Valley’s Gordon Gekko in Allbirds shtick anymore.
Edward Ongweso Jr. sums it up well in The Incredible Tantrum Venture Capitalists Threw Over Silicon Valley Bank:
For the past 10 years venture capitalists have had near-perfect laboratory conditions to create a lot of money and make the world a much better place. And yet, some of their proudest accomplishments that have attracted some of the most eye-watering sums have been: 1) chasing the dream of zeroing out labor costs while monopolizing a sector to charge the highest price possible (A.I. and the gig economy); 2) creating infrastructure for speculating on digital assets that will be used to commodify more and more of our daily lives (cryptocurrency and the metaverse); and 3) militarizing public space, or helping bolster police and military operations…We should ask whether a system that subsidizes a bunch of well-connected, wealthy libertarians as they enrich one another with lottery tickets is truly the only way we can and should develop technology. I hope not.
Zooming out, our country is still reeling from the absurdity of anything being labelled “too big to fail.” Everyone wants a piece of that kind of immunity. Startups are too innovative to fail. VC’s are too essential to fail. Heck, I’m too stoned to fail. Everyone is too something to fail. But a financial system where no one can fail is an illusion that guarantees eventual failure on a mass scale; it’s only a matter of time.
Where do we go now?
So who should we take banking advice from? Consider managing your money like the Greek Freak.
Giannis Antetokounmpo, the two-time MVP who last year led the Milwaukee Bucks to their first NBA title since 1971, opened bank accounts with 50 different banks — each one of them holding $250,000, his boss, team owner Marc Lasry, told Bloomberg News.
50 different bank accounts? That’s a diversification slam dunk.
Or maybe just buy Bitcoin. In a way, it's a bet on the traditional financial system falling apart. And more and more, it just seems like a matter of time on that.
🎯 You keep a partner for the same reason you keep a therapist: You can’t stomach having to tell all your crap to a new person again.
🎯 The future will be mostly trying to figure out if you're talking to a bot or just a really boring human.
🎯 If you want to attract women, watch less Andrew Tate/Jordan Peterson and more Sex and the City/Girls. That way you can have a conversation with a woman instead of a message board.
🎯 President is the one job that gets decided by traveling around in a bus, visiting diners, and shaking hands with farmers. Being willing to do this for over a year feels like it should be disqualifying on its own. "I'm gonna ride a bus to state fairs, flip pancakes, and kiss babies!" OK, weirdo.
🎯 Gal told me she could never date someone my age who'd never been married before. Weird that I'm being punished for not having failed at something. Like hearing: "I'll only fly with a pilot if they've crashed at least one plane. I need to know they can commit!"
🎯 Blaming everything on the system is a path to ongoing suffering. It absolves us of individual personal responsibility, leaving us feeling helpless and at the mercy of fate instead of in control of our own destiny.
😈 I post clips of my standup and more at Instagram, TikTok, and YouTube.
😈 Listen to my podcast: Kind of a Lot with Matt Ruby. Latest ep is all about sci-fi, tech, and the future.
😈 Recently at my other newsletter “Funny How: Letters to a Young Comedian”…
Why Seinfeld isn't a fan of writing onstage
How to structure a tight five set for late night
The worst thing a comedian can do onstage
😈 I guested it up on the Behind the Bits podcast. We discussed:
- The idea behind his special “Substance” available on YouTube
- Overthinking your set vs being in the moment
- How he was drawn to stand-up comedy after moving to New York
Argh, I’m “near email length limit” so saving the rest for a special bonus issue (for paid subscribers only) later this week. You can go ahead and sign up here to get it:
Thanks for reading!
You can't blame the Fed for raising rates without simultaneously giving them credit for keeping rates artificially low for two decades. Or maybe it's "blame them for keeping rates low," I don't know, but it's clearly a double-edged sword.
Cool Simmons mention!