Jamesian Philosophy Refreshed

During the final day of August this year, SPD Silicon Valley said that it would become a wholly owned unit of the Shanghai Pudong Development Bank, under the name Shanghai Innovation Bank.  Why do I care?  Isn't this just a name change on the other side of the world from me? Well, it IS that. But it has some symbolic significance.  SPD Silicon Valley began life as a joint venture of Shanghai Pudong Development [SPD] on the one hand and the important northern California financial institution, Silicon Valley Bank, on the other.  Silicon Valley Bank was what one would imagine it was from the name: it was for years a bank important to the venture capital and high-tech entrepreneurial world in the Bay Area. It arranged an alliance with SPDB in order to try to make itself a player of global reach, not merely an important regional institution. The creation of their joint venture, SPD Silicon Valley, was an expression of that alliance.  In March of 2023, Silicon Valley ...

  What was the significance, what is the current significance, of the failure of Silicon Valley Bank in March of this year?  For a few nervous weeks thereafter, it appeared that this might be the spark that sets off the forest fire, the catalyst for a 2008 style banking crisis. But with four months between that moment and our own, we can say with some safety that that was NOT the case.  One ripple, though, was this: the failure of SVB had a rather severe impact on the west coast venture-capital world which SVB and its parent company, SVB Financial Group, served. The bank and its parent and sister entities were founded precisely to serve that world.  Yet the broader economy survived. I do believe that venture capitalists serve valuable economic functions. But they are not day-to-day functions, and the rest of the system can get along without them for a time. The VC spending in the United States fell by half in the second quarter of 2023, largely due to the absence of ...

  Until a few minutes ago I was under the impression that I had already written something in here about the failure of Silicon Valley Bank in March of this year. I can't find any such post now. So ... maybe not. I see a brief reference to it in an item about an FDIC regulation, but that's it. Anyway, my apologies if I didn't. I'm am sure I have masses of lurking readers whom I've disappointed. Here is a very short statement of what happened. I will say something about its significance tomorrow. Just the facts today.  In the early days of March there was a run on SVB. The Federal Reserve's long campaign of interest rate hikes, combined with bad managerial decisions, had caused bank losses that made depositors nervous -- hence a bank run right out of the Potterville playbook. People  need their liquidity.  On the morning of March 10, a Friday, the California Department of Financial Protection and Innovation seized SVB and put it int he receivership of the Federal...