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close video Silicon Valley Bank had a duration problem: Robert Heller

Former Federal Reserve Governor Robert Heller reacts to pressure Fed Reserve Chair Jerome Powell is facing to halt rate hikes on ‘Kudlow.’

Silicon Valley Bank, the nation's 16th-largest bank, failed because its managers made a textbook mistake, according to former Treasury Secretary Larry Summers. 

Summers, a Harvard University professor who served in both the Clinton and Obama administrations, said Monday the bank "committed one of the most elementary errors in banking: borrowing money in the short term and investing in the long term." 

SVB collapsed Friday after depositors ran on the bank, which didn't have cash on hand to cover their withdrawals. It was the second-biggest bank failure in U.S. history and the largest since Washington Mutual went under in 2008. Ticker Security Last Change Change % SIVB SVB FINANCIAL GROUP 106.04 -161.79 -60.41%

What happened is fairly simple: when interest rates were at historic lows, SVB invested depositors' funds in long-term Treasury bonds. But as the Federal Reserve increased interest rates to combat inflation, the price of those bonds cratered, taking SVB with it. 

MORTGAGE RATES POST BIG DECLINE AMID SILICON VALLEY BANK FALLOUT

FDIC member Dedra Dorn, center left, speaks with people in line outside Silicon Valley Bank’s headquarters in Santa Clara, California, Monday, March 13, 2023. Dozens of bank customers waited in line to withdraw funds. (AP Photo/Benjamin Fanjoy / AP Images)

"When interest rates went up, the assets lost their value and put the institution in a problematic situation," Summers explained on Twitter. 

On Wednesday, SVB suffered a $1.8 billion after-tax loss and attempted to address its liquidity crisis by selling equity. The move backfired – in just 24 hours, SVB lost over $160 billion in value and spooked depositors, who rushed to withdraw their money before the situation got worse.

SILICON VALLEY BANK COLLAPSE: HERE'S WHO BENEFITTED FROM THEIR EXECUTIVE, PAC DONATIONS

People look at signs posted outside an entrance to Silicon Valley Bank in Santa Clara, California, March 10, 2023. (AP Photo/Jeff Chiu / AP Newsroom)

Regulators stepped in on Friday, when the Federal Deposit Insurance Corporation took control of the bank. The FDIC said in a statement that SVB had $209 billion in assets and $175.4 billion in deposits at the end of 2022. It guaranteed that insured deposits, up to the statutory limit of $250,000, would be made available by Monday.  

The FDIC created a new entity, called Silicon Valley Bank N.A., and transferred all of SVB's deposits there, where depositors can access their money. 

FEDS HOLD AUCTION FOR FAILED SILICON VALLEY BANK, MOVE TO PROTECT UNINSURED DEPOSITORS

A Silicon Valley Bank logo displayed on a smartphone. (Photo Illustration by Avishek Das/SOPA Images/LightRocket via Getty Images / Getty Images)

Former Fannie Mae head Tim Mayopoulos was appointed CEO of the new bridge bank, Reuters reported.

"I look forward to getting to know the clients of Silicon Valley Bank… I also come to this role with experience in these kinds of situations," Mayopoulos wrote in a letter to clients. "I was part of the new leadership team that joined Fannie Mae in the wake of the financial crisis in 2008-09, and I served as the CEO of Fannie Mae from 2012-18." 

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In an interview on CNN, Summers called for increased supervision and regulation of the banking industry.

"It doesn't appear on current facts that a very good job was done regulating and supervising Silicon Valley Bank," he said. 

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Ex-Reform MP Rupert Lowe alerts coastguard to ‘migrants’ – who were a charity rowing team

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Ex-Reform MP Rupert Lowe alerts coastguard to 'migrants' - who were a charity rowing team

MP Rupert Lowe alerted the coastguard to potential migrants on a boat – who turned out to be a charity rowing crew.

The independent Great Yarmouth MP posted a picture on social media on Thursday night of a boat near some wind turbines off the Norfolk Coast, saying he had alerted the authorities.

He wrote dinghies were coming into Great Yarmouth, “RIGHT NOW”.

“If these are illegal migrants, I will be using every tool at my disposal to ensure those individuals are deported,” he added.

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But the “dinghy” was actually an ocean rowing boat crewed by ROW4MND, a team of four attempting to row from Land’s End to John O’Groats for motor neurone disease research.

Rupert Lowe MP. Pic: PA
Image:
Rupert Lowe MP. Pic: PA

Mr Lowe, who was suspended from Reform UK in March, posted on Friday morning that it was a “false alarm” and was a boat of charity rowers, “thank goodness”.

More on Reform Uk

He said he would donate £1,000 to their charity “as a well done” – but warned people to “watch out for any real illegal migrants”.

“We received a huge number of urgent complaints from constituents – I make no apologies over being vigilant for my constituents. It is a national crisis,” he wrote.

“No mass deportations for the charity rowers, but we definitely need it for the illegal migrants!”

The ROW4MND crew were passing Great Yarmouth on their way to John O'Groats. Pic: PA
Image:
The ROW4MND crew were passing Great Yarmouth on their way to John O’Groats. Pic: PA

Police wanted to send a boat to check

It is the first of four gruelling rows the crew will take over four years in an attempt to raise £57m for motor neurone disease research, inspired by the deaths of rugby players Rob Burrow and Doddie Weir from the condition.

Matthew Parker, Mike Bates, Aaron Kneebone and Liz Wardley said the coastguard initially contacted them and asked if they could see a dinghy nearby.

Ex-Royal Marine Mr Bates, a British record holder for rowing across the Atlantic solo, said it soon became clear the coastguard was asking about their boat.

“I looked to my right and there was maybe a dozen individuals stood on the shoreline staring at us,” he told the PA news agency.

After the coastguard accepted they were not carrying migrants, they rowed on through the night but hours later were contacted again by the coastguard because the police had “asked if they could send a lifeboat out to check who we were”.

The crew leaving Newlyn Harbour in Cornwall last week after starting their challenge again. Pic: PA
Image:
The crew leaving Newlyn Harbour in Cornwall last week after starting their challenge again. Pic: PA

‘I’ve not been mistaken for a migrant before’

A friend then forwarded Mr Lowe’s post, which Mr Bates said was “a moment of light relief”.

“We found it hilarious. I’ve not been mistaken for a migrant before,” he said.

“The best comment was the one asking where the Royal Navy were when you need them. I’m a former Royal Marine, so the Royal Navy were on the boat.

“But it was almost like a vigilante-style, people following us down the beach.

“They hadn’t twigged that we were parallel to the shore for hours and not trying to land.”

Read more:
Is Corbyn’s comeback a headache for Starmer – or a red herring?

Gruelling four-year challenge

The crew set off from Land’s End on 25 July, heading north, but bad weather forced them to stop, and they decided to return to Land’s End and start again, heading anticlockwise around the UK.

Next year, the team is hoping to row from John O’Groats to Land’s End, then from California to Hawaii in 2027 and New York to London in 2028.

Mr Bates said: “We’re rowing for hope, we’re rowing to find a cure, and hopefully we’ll raise £57m – we certainly will if MPs keep talking about us. Maybe Rupert will give us a donation.”

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Tesla used car prices keep plumetting, dips below average used car

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Tesla used car prices keep plumetting, dips below average used car

Tesla used car prices continue to plummet, while the average used car price is increasing. Despite being considered a premium brand, used Tesla vehicles are now cheaper than the used car sale price.

Isn’t this nuts?

Last year, Tesla’s used car prices started to drop along with the rest of the used car market in the US.

However, when the market started to recover in March 2025, Tesla’s used car prices didn’t. It continued to drop.

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In fact, it has now dropped so much that the average used Tesla vehicle costs less than the average used car on Car Gurus:

This is unprecedented. Although the brand has taken a significant hit over the last year, Tesla is still regarded as a premium brand in the industry. The fact that its average used car sale price would dip below the industry average, which includes inexpensive mass-market vehicles, is quite exceptional.

Used Tesla car prices are now down 4.59% year-over-year, compared to the market average being up 1.22%:

Make/Model Avg Price Last 30 days Last 90 days Year over Year
CarGurus Index $28,039 +0.19% +1.22% +1.22%
Tesla $27,814 -1.75% -4.59% -4.59%

All Tesla vehicles are down year-over-year, with the Cybertruck unsurprisingly leading the charge.

However, Cybertruck has started to recover in the last few months, along with Model 3.

The Model Y, which is by far Tesla’s most popular model by volume, is dragging the average down as it continues to fall:

Make/Model Avg Price Last 30 days Last 90 days Year over Year
Cybertruck $83,963 +0.88% +0.3% -30.44%
Model 3 $23,318 +0.2% +0.75% -8.04%
Model S $26,534 -5.48% -9.53% -22.61%
Model X $37,747 -2.33% -9.24% -16.8%
Model Y $29,216 -0.49% -0.68% -11.97%

Electrek’s Take

Many Tesla owners have been selling their used vehicles and switching to new brands, increasing the supply and putting pressure on prices.

I expected this, but I didn’t expect the pressure to be so great that prices would dip below the average used prices.

This is significant.

It’s proof that the Tesla brand has taken a massive reputational hit and there’s no clear recovery in sight.

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Politics

Roman Storm conviction for Tornado Cash sets ‘dangerous precedent’

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Roman Storm conviction for Tornado Cash sets ‘dangerous precedent’

Roman Storm conviction for Tornado Cash sets ‘dangerous precedent’

Tornado Cash developer Roman Storm’s conviction misapplies money transmitter laws, crypto industry group says.

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