The “cheap money ecosystem” that fed the tech start-up culture has come to an end
Breitbart Economics Editor John Carney said in an interview Friday with Fox Business host Larry Kudlow 💬 “The sudden implosion of Silicon Valley Bank (SVB) is sending shock waves through the financial system and the technology sector,” Carney wrote in Friday’s Breitbart Business Digest. “SVB plays a central role in the start-up economy of San Francisco. According to Bloomberg, it does business with about half of venture capital backed start-up firms in the U.S.” “One of the problems [for SVB] was when money was so freely available to all these start-ups, they didn’t borrow a lot,” Carney told Kudlow. “So, they had a ton of deposits coming in and not a lot of opportunity to make loans out to people. I mean, yeah, you can lend money so people can buy a yacht or a fancy mortgage on some tech start-up billionaire’s fancy mansion, but they really had way too much money. So, they invested it in bonds. Bank of America I think has 25 percent of its assets in bonds, but this bank had over 50 percent of its assets in bonds.”
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