Banking is a game of confidence. Corruption is useful towards the success of a confidence game, until it isn’t.

Let me keep it simple. The money in your bank account isn’t actually there, it’s reinvested. If those investments go bad then there’s a possibility your money will be destroyed. As a society, we pay a collective insurance policy to guarantee the money up to a point — like any insurance policy, the collective value comes from taking from those who don’t need it to those who do. There are alternatives — Money Market Mutual Funds, Treasury credit instruments, or non-USD investments — but you have to be a grown up to use them.

Do I expect every American to understand this? No not every, but I do expect every American who is wealthy enough to be impacted to at least understand that if they don’t understand then they need to find someone who does. This is what it means to protect — sometimes that means trusting another.

It’s not possible to ensure every deposit to infinity. It’s not possible to simply lock money in a vault and charge a fee. Thousands of years of financial development and you think nobody has ever had the thought: “why don’t we just lock the money in a vault and charge a fee?”

A lot of life — for adults at least — is about finding the least worst option.

Let me for a brief moment discuss bitcoin (BTC). If your answer to this situation is to simply buy BTC then you’re about to go on a journey. The state exists first and foremost to protect the money — what’s ironic is, BTC is actually a state-enterprise, but the populous is the entire globe, not arbitrary lines on a map. BTC doesn’t work at the required scale because of it’s fixed supply — the thing held most near and dear. In order to establish stability — a requirement for the scale — the monetary good must be elastic (and to be precise, it has to be counter-cyclical). The volatility cost of BTC would continuously decimate poor and working class — that’s why we evolved from a gold standard to a fiat standard. Yeah, fiat is actually better, who knew?! I am a BTC bull, but only insofar as fiat policy makers continue to make mistakes, which, they will. That’s the value of BTC as an investment — which, is distinct from its utility — it’s an insurance policy against idiocy.

Anyways… if you’ve been living under a rock, Silicon Valley Bank (SVB) experienced a full fledged bank run at the end of last week and had to be shut down. There are financial implications here which I will spare you. The basics are, the depositors will be mostly fine, they’ll take a 30-50% haircut on any uninsured funds (over $250k) in the worst case. For some people that’ll be devastating, and I’m sorry for that. The thousands of startups who use SVB for payroll will be impacted — but I have faith solutions will be found. If you’re wealthy enough to where this could impact you, and you haven’t yet taken things seriously, then now is the time. There is room for regulatory improvements too. Raise the depository insurance to $1M and then maybe consider a different policy for business accounts. I’m not an expert. This further accretes power to the Big Banks, but honestly, I think that’s probably for the better — in the same way car dealerships are a tax on society, my guess is, so too are regional banks. The world evolves and that’s a good thing.

There is a risk of contagion into many regional banks around the country, and that is a concern. Banking is a confidence game, and if confidence is destroyed — as the Lords of SaaS (and engagement farmers) are actively doing right now on Twitter — then a wider spread contagion is a real possibility. Of course, my advice everywhere and always is to withdrawal now and ask questions later. This is what it means to protect.

Kamikazee: An airplane loaded with explosives to be piloted in a suicide attack.

The real story that I — a software engineer who has spent most of his career working on Enterprise SaaS — want to talk about is… the market just made the natural selection away from the future of yet another Silicon Valley SaaS company. Because, the world doesn’t need another Customer Relationship Management (CRM) tool. To the surprise of many, Excel is fine. The Lords of the SaaS fiefdoms know they’re backed into a corner and their decision, understandably, is to instill wide spread panic because they have nothing left to lose. To these Lords, they need a miracle. They need the policy makers — Jerome Powell & Janet Yellen & Congressional leaders — to come out on stage and say something like, “this is really bad, we’re immediately lowering interest rates back to zero, we’re going to bailout every bank, and we’re going to fully guarantee all depositors.” That is a MASSIVE Hail Mary. So much so, I question their moral character in their kamikazee mission. And yes, I will voice my opinion — even if it perceived as “political” — because I’m a part of this world and I intend to protect myself and the people around me. So, those are the stars which must align in order for their privileged, life of handouts, totally disconnected from reality world to continue. Spoiler alert: it won’t.

The Lords of SaaS startups are dead! Long live the Lords of SaaS!

I don’t mean they’ll experience a recession or even worse 2000 tech bubble downturn — I mean they are dead and not coming back ever. Natural Selection has chosen a different route. Probably the recent developments in Artificial Intelligence are a large part of this equation. Is this bad for the thousands of American’s who have spent years dedicating their lives to failed ventures? Yes absolutely. Is it healthy for the collective? Also yes.

I don’t intend to be crass. I intend to convey a message that the world today — post global financial crisis, post COVID, post first land war in Europe since WWII — is a world which we must take seriously. If you think you are shielded from these events then you’re the sucker at the table. I don’t intend to advocate for policies or involve myself whatsoever in the political gyre. I intend to protect.