It’s very, very sad and equally scary.
But… I can’t help it. I have a kippa on my head, which means I believe that Someone else is pulling the strings, that He is controlling our world.
Before I continue, I will not let anyone twist my words or misunderstand what I’m saying. I am not saying or implying, nor do I believe that anyone deserves to lose money. I am not happy about any of this, nor do I think anyone had it coming to them. This whole story is terrible for everyone involved. That is a stand-alone fact. I am not in any way happy about this.
But I’d be lying to myself if I said I didn’t see God’s involvement here. People say God works in mysterious ways? People also say that man plans, and God laughs. A part of me thinks that God has a really ironic side to Him.
In case you haven’t heard, the 16th largest bank in America and the bank that basically controls a massive majority of startup money has totally collapsed in the last 48 hours. Silicon Valley Bank is no more.
You’ve surely seen it being spoken about on the Internet and perhaps you are in finance so you understand what went down. I didn’t. But in a wild oversimplification, the bank announces that it needed to raise $2.25 billion to fix its balance sheet.
The market freaked out, their customers pulled out $42 billion and ran. This caused the bank to totally crash and then the bank was seized by the federal government yesterday, and basically shut down.
This is the biggest US banking failure since 2008.
“This was a hysteria-induced bank run caused by VCs,” Ryan Falvey, a fintech investor at Restive Ventures, told CNBC. “This is going to go down as one of the ultimate cases of an industry cutting its nose off to spite its face.”
So because everyone freaked out with no good reason, the bank collapsed.
Before even getting into it, you can’t miss the irony of Israeli entrepreneurs making statements of how they’re pulling their money from Israel because the economy will crash and putting it into a “safe economy” called Silicon Valley.
But it’s much deeper than that.
I’ve seen posts of those supporting those entrepreneurs who are pulling their money saying things like “See? If it could happen to SVB in 48 hours, imagine what could happen here if the reform passes?”
Wow, that’s some serious twisting of reality.
These people have been yelling for months that their money will be worthless in Israel. They’ve been burning this country down and yelling about the end of the democracy. And somehow we are still standing and in 48 hours for no real reason other than speculation, SVB disappears.
My conclusion is the only logical one I can think of. Israel and our economy is strong and can withstand this crisis. If it wasn’t strong, it would not have survived the past few months. It wouldn’t have been able to survive a single day. Exhibit A: SVB.
I truly wish that these entrepreneurs who pulled their money will take this story and learn their lesson, that their money is safer here than anywhere.
Of course we all know I’m preaching to the choir because those of us who believe that Israel will survive will be reading this and nodding their head and those of us who think Israel is not safe for their money will simply say that the SVB story proves their point.
That’s what characterizes this conflict about the reform. Both sides see the same reform, the same legislation, and reach conclusions that are 100% opposite. And both sides think the other is dead wrong.
I’m not even going near the reform. I just can’t ignore the irony.
To me, God is clearly saying “Hey Israeli startups, you’re worried about the Israeli economy and think that transferring your investors’ money to the US is safer? Hold my beer.”
No matter how you look at this SVB story, it’s sad and scary for the whole industry and again, no one deserves this, but then again, no one should be throwing Israel under the bus for financial instability.
The world has a way of reminding us of what’s true, and what’s a spin that doesn’t reflect reality.
We haven’t seen the end of this SVB story. It hasn’t even begun. The domino effect will be very scary for Americans and Israelis alike. Good chance that it’ll affect the Israeli tech ecosystem, and no one knows where it will end.
I’m just sayin, Israel is ok and will continue to be ok. If that offends you, I’m sorry.
I hope somehow that this SVB story has a happy ending, or at least, a non-catastrophic ending.
Again, because I know what’s coming, I’m not saying this is a good thing, nor am I saying that the crisis in Israel isn’t causing damage to the economy. It is. That’s a fact.
All I’m saying is, we will be ok. We’ve been through worse.
Published on Hillel Fuld’s Facebook Page