SIVB (parent of SVB), Form 10K gets a drill down. Pay attention to the footnotes.

Avoid Crisis

March 30, 2023 - Avoid Crisis hosts Reynaldo Arellano and Allen Plyler open up about being a real podcast for real people, and that includes being in the process of figuring out technical challenges. Strange footnote in Form 10K from SVB parent gets a drill down on what it could mean. FTX impact is not fully known yet. First callouts for guests invited to the podcast are made.

Key Points from Rey:

• You have to be aware of issues and that starts you down the path of Avoiding a Crisis.
• Again, calling for FDIC to raise the insured deposit limits to $500,000
• We have buyers for Signature and SVB assets, do they know what they bought?
• Technology now permits rapid deployment of funds and transfers. This is a part of the escalation of risk in the financial sector.
• The Fed and FDIC need to take action now to avoid a crisis.
• Money is going to get really tight.
• Companies are not getting funded and rough waters are coming.
• Monitor your cash and cut back on spending to get through an upcoming recession.
• California residents are getting relief on tax payments and due dates. Details provided on who benefits and the extensions provided. Counties impacted include 44 counties in California.Rey
• Rey invites a guest as well. To respond he asks for email to [e-mail]
  • Warrant Buffet

Key Points from Allen:

• Is the market thinking this crisis is over? Is there really a guarantee of all deposits? What impact would there be if there are a large number of people pulling out of the bank?
• The movement out of deposits in banks is happening in both large and smaller banks.
• FDIC got an equity kicker in the deal, what about the equity holders that were taken effectively to zero.
• The guarantee of uninsured deposits as a government backstop was too little too late.
• What if the government acted faster to stop the run on SVB with a guarantee of the uninsured deposits?
• You may need a financial planner now to help avoid a crisis
• With reminders of “It’s a Wonderful Life”, Allen asks for the Jimmy Stewart Museum to send an invitation and maybe an episode will happen there.
• SVB was a lender of choice, where do you go now if you are a startup? You need a source of funds.
• Allen points to his speech during the financial crisis at Financial Executives International on FAS 157 a Troubled Solution that his research led to a footnote that showed Congress the power over the accounting standards and the standard setter the FASB. It was just a footnote, but it had a lot of meaning. He called on Congress to drive change on the mark to market criteria.
• SIVB, parent of SVB Form 10K has a footnote that discusses a change in accounting policy that was retrospectively presented. What exactly was the change and what led to the change?
• The SEC should be looking in their investigation into SVB their use of derivatives and their disclosures.
• We have not seen the full impact of FTX yet. Who made the money and where did it go?
• Is the government too early with the all clear view?
• Using a financial planner now may be prudent to Avoid a Crisis.
• Allen names his guests that are invited to the podcast and names. No further details are provided for why they are invited, but it is aligned with the Avoid Crisis themes. He requests to be contacted at [e-mail]
  • Sharon Stone
  • Spencer Lee
  • Shaquille O’Neal

Connect with Rey
linkedin.com/in/reynaldoarellano

Connect with Allen
linkedin.com/in/allen-plyler-cpa-mpm-3803992a/

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