First Domino Down

Silicon Valley Bank just crashed so hard that the FDIC had to step in and seize it on a Friday morning before the close of business.

The Federal Deposit Insurance Corporation seized the assets of Silicon Valley Bank on Friday, marking the largest bank failure since Washington Mutual during the height of the 2008 financial crisis.

The bank failed after depositors — mostly technology workers and venture capital-backed companies — began withdrawing their money creating a run on the bank.

The FDIC ordered the closure of Silicon Valley Bank and immediately took position of all deposits at the bank Friday. The bank had $209 billion in assets and $175.4 billion in deposits as the time of failure, the FDIC said in a statement. It was unclear how much of deposits was above the $250,000 insurance limit at the moment.

Notably, the FDIC did not announce a buyer of Silicon Valley’s assets, which is typically when there’s an orderly wind down of a bank. The FDIC also seized the bank’s assets in the middle of the business day, a sign of how dire the situation had become.

But don’t worry. We are cross-the-FDIC’s-heart pinky-swear assured that there is little danger of contagion throughout the financial industry because all of the other banks are absolutely just fine and have totally no issues at all. It’s just a flesh wound, nothing more.

Please continue to consume with confidence and don’t forget to be tolerant and inclusive!

PS: this is what debt-deflation looks like. Billions of dollars in debt-wealth vanishing in an instant.

UPDATE: Wells Fargo customers have reported that their direct deposits were missing from their accounts on Friday morning, according to reports.