Silicon Valley Bank: Outlier or Harbinger?

Confidence in banking is falling. The Silicon Valley Bank (“SIVB”) failure ignited a host of old fears as well as new ones. U.S. consumers have nearly the same fear level of concern about banking as they did during the 2008 financial crisis. According to a Gallup poll, when asked about “the safety of money you have deposited in banks and other financial institutions”:

  • 19% of Americans were “Very worried”
  • 29% of Americans were “Moderately worried”
  • 30% of Americans were “Not too worried”
  • 20% of Americans were “Not worried at all”
  • And only ~2% of Americans had no opinion

For comparison purposes, in September of 2008, fresh from the Lehman Brothers collapse (also the largest bankruptcy filing in U.S. history), consumer concern was 45% either very or moderately worried about the safety of their money. Even after Congress bailed out at-risk banks with TARP (Troubled Assets Relief Program), 41% of U.S. consumers surveyed said they were still very or moderately worried.


Why did Silicon Valley Bank Fail?

Silicon Valley Bank failed on March 10, 2023. SVB failed because they ignored tried and proven long-term investing cardinal rules: Diversification and Risk Management. Despite its impressive growth and $209 Billion Asset base in 2022, according to the FDIC (Federal Deposit Insurance Corporation), its specialization in venture capital-backed startup tech companies became a proverbial double-edged sword. Non-diversification: SVB invested outsized amounts of their deposits in long-term U.S. Treasuries and MBS (mortgage-backed securities). Smart play if interest rates stayed low -which they did for years. However, it was an inherently risky play, because interest rates historically are prone to changes and sharp ones at that. When interest rates inexorably rose again, the bank’s bond portfolio started taking losses. Interestingly, SVB would have recovered its capital if different circumstances allowed them to hold their bonds through maturity.


Relaxed Risk Management

In 2021, Silicon Valley Bank moved to longer-term securities to increase their yield, but did not adequately protect the downside risk with shorter-term investments for near-term liquidations. This imbalance made SVB effectively insolvent because they were no longer able to offload their assets without incurring significant losses.


After the Federal Reserve began raising interest rates, moving the federal funds rate aggressively higher from 0.25% to 0.50% (March 17, 2022) to 5.25% to 5.50% (July 26, 2023), many bank customers began taking their money out as Venture Capital began shriveling up -causing a painful chain reaction. SVB was then forced to sell their originally profitable bond positions at significant losses. Next, news of these losses stoked embers for investors to panic. Then, the news was very quickly disseminated amongst SVB’s very tech-saavy client base -turning panic into an outright fear stampede.


A Good ‘ol fashioned Bank Run meets 2023 Technology

On March 8, 2023, SVB announced it was raising $2 Billion in capital because of a $1.8 Billion loss incurred after selling a bond portfolio. Then SVB CEO, Greg Becker attempted to allay fears by stating that SVB had the “financial position to weather sustained market pressures,” but noted that customer deposits were lower than expected in February. Not convinced, the credit ratings firm, Moody’s downgraded the bank’s bond rating and slashed its outlook to negative, from stable.


Now publicly short on capital, news of Silicon Valley Bank’s illiquidity problems spread like a wildfire through a dry forest in summer via social media platforms. SVB customers began withdrawing their capital through every possible method -especially digitally. The speed and ferocity of the withdrawals amplified by social media expletives. Axios found that negative tweets have a negative effect on bank returns, especially if those tweets originated from a startup leader. Further, “the intensity of Twitter conversation[s] about a bank predicts stock market losses.” SVB’s stock price imploded by ~60% on March 9 -less than 24 hours from the capital raising declaration. According to the Federal Reserve Board, SVB deposit outflows were over $40 Billion.


On March 10, Silicon Valley Bank, once the darling of Silicon Valley’s Tech community, failed. The CDFPI (California Department of Financial Protection and Innovation) shuttered the bank after the unprecedented deposit outflow. The FDIC was named receiver of the U.S.’s 16th largest bank and it became the largest bank crash since the Great Financial Crisis.


Reverberation and the Future of Banking

The shockwave of SVB’s failure immediately affected other banks such as First Republic, Signature Bank and Western Alliance. Similarities, again go back to non-diversification and risk management errors. The KBW Bank and Regional Bank indices, down ~20% YTD, are seriously lagging behind the S&P 500 up ~16% YTD. Conversely, as panic ensued at SVB and Signature Bank, megabanks like J.P. Morgan got bigger through both deposit inflows and stock price -as customers and investors sought refuge from any lesser-sized-bank instability.


Banks may be treated more like a customized and diversified portfolio in the future. Where customers no longer hold all of their assets at one single financial institution for added risk management and diversification. The number of FDIC-insured commercial banks was about 14,400 in the early 80s and now numbers 4,136 in 2022, according to the FDIC. This downtrend is likely to continue as U.S. still boasts the highest number of banks in the world and as consumers gravitate towards frictionless banking -where physical location is no longer the primary driver. Further, digital banking and social media will continue to be bigger parts of consumers’ lives -which will exaggerate any future panic at any other bank -real or perceived. In other words, competition is heating up, but is now skewed to large- and mega-sized financial institutions.


The SVB collapse punctuates the importance of strong portfolio management inclusive of robust risk management and personalized diversification. This means managing risk not only in bad times, but also in times of plenty. 




Gallup - About Half in U.S. Worry About Their Money's Safety in Banks

Forbes - Federal Funds Rate History 1990 to 2023

The New York Times - 10 Days That Have Roiled Markets: A Timeline of the Banking Chaos

Axios - Twitter fueled run on Silicon Valley Bank, new paper finds

Federal Reserve - Re: Review of the Federal Reserve’s Supervision and Regulation of Silicon Valley

Finextra - The value of frictionless banking

How Motivational Quotes Can Actually Change Your Life

Motivation is a “must-have” component to lasting success. It goes by many names:

  • Spark,
  • Fire,
  • Passion,
  • Your Why,
  • Your Calling,
  • Your Reason to get up in the morning,

Whatever you call it, it drives you to be more successful than you were yesterday. It helps you forget about what others are doing and focus on your goals and dreams. In so doing, your driving motivation helps activate flow state -as written by Mihaly Czikzsentmihalyi’s book Flow. Where you are so entranced by your activity, time feels different: hours become minutes, minutes feel like seconds. This flow state, in turn, allows you to spend more time on that activity, which in turn, makes it more likely that you become an expert in your field, which, in turn makes it more likely you’re a success in your field, which, again compels you to spend more time on those winning activities reinforcing the virtuous cycle higher and higher. Motivation is the lifeblood to all great success.


Can Motivational Quotes Really Change Your Life?

In a State University of New York Paper, “Five Key Ingredients for Improving Student Motivation,” Dr. Caro Williams-Pierce identifies key factors that have outsized positive impacts on performance. Among those factors is: “Efficient use of energy and focus: Students should be taught how to produce results while maintaining focus and energy. Businesses and organizations certainly focus on getting the right results with the least effort or cost. Hence, educators need to train students to “stalk” efficient and effective results… This theme of efficiency should serve the student in his or her studies as well as in their life and global citizenry.”


That’s what Legendary Quotes do. They’re real-world focused thoughts on a specific subject by an experienced and successful subject matter expert. In other words, Legendary Quotes are powerful focal points of advice from bona-fide champions within their field -distilled into the bite-sized nuggets of mental nutrition critical to your success- and Empire-building regimen.


It’s like having a subject matter leading expert give you advice when you need it. Consider the Legendary Quote: “Impossible is a word only to be found in the dictionary of fools.” By Napoleon Bonaparte, Legendary Commander, Statesman, Protector of the Confederation of the Rhine and Emperor of the French. From being bullied by his peers for his accent, birthplace and stature to becoming one of the greatest military commanders in History, a Self-Made Emperor and one of the most celebrated and controversial leaders in human history.


It would take decades of experience, blood, sweat, mistakes and victories before speaking those words into existence. For the ambitious, clever readers out there paying attention, we get the benefit of that world-class, world-changing knowledge in minutes or seconds -without spending the years of trials and tribulations Napoleon did. However, therein lies the challenge, the natural pitfall is to take this golden nugget of wisdom for granted because it came so easily. Don’t do it. If you get a pearl of wisdom that appeals to you from a vetted source: read it once. Then, read it a second time. And, read it and internalize it until it becomes a part of how you live your life.


Reading Legendary Quotes are like having outlier successful experts in their respective fields, giving you the best advice they can give on that subject.


3 Primary Rules for Making Legendary Quotes that Really, Positively Change Your Life


  1. Who: Consider the Source of the Quote before even reading or adopting it. Don’t fall for the very common pitfall of: “Don’t make my mistake advice -so I know what I’m doing.”
    • The major issue with this type of advice, even if it comes from a good place, is that while it is true you often learn more from your mistakes than your successes -until that person has the requisite amount of success (after the mistake) they are NOT free of the likelihood of making the exact same mistake again.
      • If a depressed, chronic alcoholic is giving you advice on how to stay sober -unless they’ve been sober for a reasonable period of time, the probability of a relapse is remarkably high -regardless of the how convincing they made their argument sound.
    • A mentor once told me, “Only take advice from someone in a better position than you are currently -specific to that subject.” That means taking basketball advice from Michael Jordan-level champions. And, discarding advice from wannabes and other people who just sound good, but lack the appropriate success track record.
  2. How: How does the quote serve you? Don’t Listen to a Quote just because it sounds good.
    • There are legions of quotes out there that are pithy, clever and funny -but have no intrinsic motivational value. For example, in this demotivational quote: “Mistakes. It could be that the purpose of your life is only to serve as a warning to others.” It’s funny, witty, memorable and popular enough to have sold many, many posters. It’s even meme-worthy. However, it won’t likely serve you because no actual advice is given -except maybe don’t even try for greatness…
    • According to the Harvard University psychiatrists, “Sticks and stones may break my bones, But names will never hurt me. … that often repeated children’s rhyme is wrong… The report suggests that, when verbal abuse is constant and severe, it creates a risk of post-traumatic stress disorder, the same type of psychological collapse experienced by combat troops in Iraq. The research on which the report is based points out that children who are the target of frequent verbal mistreatment exhibit higher rates of physical aggression, delinquency, and social problems than other children.”
      • In order for Motivational Quotes to change your life, the quote has to be positive, drive you forward and serve you in a positive way.
      • We can also reasonably, find the inverse of that theory, when qualified success advice is constant and forward-moving, it creates a virtuous cycle of success for you.
  1. When: Focus on one high-quality Quote by a Legend per day. Your time is the most precious resource you have. You can’t spend your day reading and watching motivation. At some point, you’ll need to deploy massive action.
    • Just like physical conditioning, it doesn’t make sense to do too much all at once. If your maximum leg press weight is 200 pounds, it’s not realistic -nor safe to throw on 1,000 pounds and hope for the best. The most tried and true course is to do an appropriate amount (relative to your current level) on a regular and constant basis.
    • There’s a reason High School, University and real-world career building isn’t taught in a single day, month or even a year. Each concept has to be focused on and internalized before you add more learnings, complexities and nuances.
    • Why is reading one quote over and over again -better than reading 10 or more at a time?
      • Cognitive Load Theory (CLT) was first developed by the Australian educational psychologist John Sweller. In a nutshell, CLT likens our minds as information processing systems. When we’re working on a problem, especially an unfamiliar one (aka learning new and multiple quotes), we depend on our “working memory”, which is very limited both in its capacity and the length of time it holds information. The less familiar you are with a task, the more you depend on your working memory to help juggle the relevant information; in contrast, when you’re an expert, most of what you need to know is stored in long-term memory and you can complete the task on auto-pilot, in some cases referred to as flow state. 
      • Since, every new quote is new information, you’re technically robbing yourself of the ability to do things on auto-pilot. These adaptations force you out of auto-pilot and draw on your limited working memory capacity. In the jargon of CLT, the intrinsic “cognitive load” of much of what you do has You’re spending more of your life having to think deliberately and consciously, more like a novice than expert, which can actually lead to mental and physical exhaustion.
      • It is for this reason, that you’ve probably run into or know personally, many people who spend hours watching or reading several motivational sources and having very little progress to show for it.
      • Like Alexander Graham Bell said, “Concentrate all your thoughts on the task at hand. The sun’s rays do not burn until brought to a focus.” There’s a solid reason high-performers aren’t world champion chess players, crossfit champions, elite market traders and kickboxing champions in the same year… You need time to focus and grow.


That’s what a Legendary Quote is. It’s curated to give you maximum effect in a short-period of time. It’s taken us years to develop a system to find, research, curate and share these Legends and their Legendary Quotes with you. We want other ambitious people to be successful. And, what better way to do that than to learn from World-Changers who already have.

Be Legendary.




Harvard University - Verbal beatings hurt as much as sexual abuse
BBC – Cognitive Load Theory
State University of New York Albany – Five Key Ingredients for Improving Student Motivation

It's Not Business -It's Personal.


The old adage: “It’s not personal, it’s just business” is bunk.


Gangster movies, lawyer sitcoms and too many business coaches would have you believing that emotion is the enemy. They’d have you think that to be successful you must scheme, plot and ultimately crush your opponents. That’s not to say warfare has no place in business –because it absolutely does. However, the mentality of command-and-conquer business leadership doesn’t work for most companies –anymore.


The world has changed. Today, a Maasai-tribesman on the plains of Kenya has access to more information via his smartphone than a White House top-level official did in the 1980s. With advancements in technology and communication, it has never been easier for “the individual voice of the masses” to be heard. And, guess what… They care. Countless blogs, videos, websites, organizations and grassroots movements have been started because of the shared-beliefs of a few or many individuals –simply because they care.


It’s no longer good enough for a business to just open its doors and hope for customers. Today’s customer wants to know what your business believes in. It’s the reason that companies like Apple have such a loyal customer following. Apple believes in “challenging the status quo” with every single product. Accordingly, Apple customers yearn for those distinctions.


People care what you, as the leader of your company, truly believe in. The business world is still brimming with mediocre companies holding on to the outdated premise of keeping “heart” out of their businesses. This represents an incalculably-huge opportunity for passionate, empowered and driven startups. People desperately want to believe in something authentic. Authenticity cannot be measured, but it is instantly recognized. Ardent shared-passion throughout your company fosters such purity.


If you make your business take a stand for what you believe in, they will come…

Carbonwolf Energy. We Fund World Changers.


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