Welcome to the Eric Erickson Show podcast, Hour 1.

Hello, America. Welcome. It is Eric Erickson here. It's an open line Friday. The phone number 877977937-745. If you want to be on the program, we've got to get right to the news because it's

happening right now. Right now at this moment, a company you never even heard of probably until

this morning, is being taken over by the FDIC put into receivership. It's called Silicon Valley Bank.

It's having spillover effects across

Wall Street. The Dow down, NASDAQ down, SP 500 down, all the major indices down. Bank stocks

hit hard. This should not terrify people. It's been thought of as a bank run. I have dug into

this. I've talked to the experts. Let me explain what's

happening here. And this will probably make sense. I hope it does. And feel free to call it if you

have any questions. Silicon Valley Bank was the home of major tech startups. You'll be familiar with some of the businesses it helped

fund. Beyond Meat, Impossible Foods, Bloom Energy, Solar City, Sun Run. It invested in and helped finance

a lot of bad tech startups that have had financial troubles.

I mean, the Beyond Meat, for example, is in all sorts of financial turmoil right now.

Silicon Valley Bank bought a lot of bonds and held onto a lot of bonds in the private sector.

If you go back in time to the financial crisis of 2008, 2009, the problem a lot of banks

and investment companies had is they, their portfolio of assets was largely in mortgage-backed

securities.

When the housing market collapsed and people stopped paying their mortgages and people went

under and they had

used all sorts of computer algorithmic models to decide which mortgages to invest in and they

didn't pan out. Well, the whole thing collapsed as a house of cards. Most banks now have fixed

this by buying into treasuries that are guaranteed by the U.S. government.

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