The Liquidity Event Podcast: Episode 85

 

Episode 85: Just Don’t Call it a Bailout

Welcome to The Liquidity Event, where Biden plays Robin Hood with billionaire taxes and rich investors get a reality check. Watch Stripe's casual $6B fundraise, while Twitter chuckles over the IRS's "honor among thieves" income reporting. Witness the birth and death of a startup bank and grab tissues for the SVB soap opera with insider trading, lawsuits, and explosive balance-sheet revelations. So, tune in for your fill of money misadventures and satirical Silicon Valley sagas!

Read the Full Transcript:

Presenter:

This podcast is for informational purposes only and should not be considered tax or investment advice. Welcome to The Liquidity Event, a show about all things personal finance with a laser focus on equity compensation. Hosted by AJ and Shane of Brooklyn FI, each episode will take you through the week's news on FinTech, IPOs, SPACs, founder wins and fails crypto, and whatever else these nerds think is interesting. Learn more and subscribe today at brooklynfi.com.

Shane:

Hello and welcome to The Liquidity Event. We are your hosts, Shane Mason-

AJ:

And I'm AJ.

Shane:

And you're listening to episode number 85 of The Liquidity Event. On this episode, we have a new version of ChatGP-2. GPT? GP-2, four, five, six, seven?

AJ:

GPT-4. It's GPT-4.

Shane:

New billionaire taxes coming your way from the tax heavy Biden administration. Spoiler alert. It's not going to happen, and we of course have the meat of the episode is the Patagonia vest bank run. Silicone Valley Bank has sent ripples across the tech world with its foreclosure by the FDIC, so we're going to dive into all that. AJ, how you doing on a personal level?

AJ:

I'm doing great. Happy St. Patrick's Day. I see we're both accidentally wearing green today. What a coincidence.

Shane:

Is today St. Patrick's Day? I thought it was the 17th.

AJ:

Oh, Friday will be. Well, Friday when this episode airs.

Shane:

Oh, no. That's my dog's birthday. I'm like, "What the fuck? It's not Charlie's birthday." Speaking of which, I got to get some bones put together for the boy's birthday.

AJ:

The bones tax, the billionaire bones tax. That's what we're talking about today. Shane will never be a billionaire, nor will any dog owner considering how much dog food costs these days.

Shane:

Oh boy. That Kibbles 'n Bits, more like dollars and pesos. Anyway, [inaudible 00:01:47]-

AJ:

More like kibble and bankruptcy.

Shane:

There it is. Thank you. Savior, landing the plane.

AJ:

I am still reading The First Tycoon, the biography of Cornelius Vanderbilt, which is a little slow.

Shane:

You're not done with that yet. I thought it was only 700 pages.

AJ:

It's only 700 pages. I'm 150 pages in. It's currently my microphone stand, which is why I looked over here.

Shane:

Dear listener. If you didn't know this already, AJ is the fastest reader I've ever met. If you ever have something you're reading... You're reading something at the same time, you'll realize how slow of a reader you are, even if you think you're fast. She is The Terminator scanning the pages faster than ChatGPT can parse an Adobe PDF file. It's insane.

AJ:

So I like to read. It's one of my great pastimes. You always make fun of me for being boring, but truly, reading and travel are my favorite things to do.

Shane:

I didn't say that. I didn't say that.

AJ:

A cliche or whatever.

Shane:

Yeah, easy now.

AJ:

What are you reading? Still the same shit? Still Harry Potter?

Shane:

I'm still reading Harry Potter. My girlfriend got back from New York and the Harry Potter got put down. It's also tax season, so-

AJ:

Sure.

Shane:

... dear listener, pray for your local CPA, your friend CPA. Really pray for their spouse is who needs the most help.

AJ:

The casualties. Yep.

Shane:

Yes. The casualties of tax season. I think this might be the third tax season in a row I go into it in a relationship and pop out April 15th single. So special shout out to all of the significant others this tax season.

AJ:

You're doing the Lord's work out there, being patient with us in our long hours and stressful and not ideal mood swings due to extreme stress. So good shout out.

Shane:

Indeed. Speaking of shoutouts, we're going to dive deep into the Silicon Valley Bank fallout and I want to send a special shout out to Aaron [inaudible 00:03:41] of HSBC, my buddy that works in the IPO space. He gave me a nice little rundown on SVP'S attempt to raise capital ahead of the inevitable bank run that wiped them out. So thank you, Aaron.

AJ:

Yeah, it's funny, Shane. We don't really ever bring experts on this show. We just skim through things and if we don't know about them, we just gloss over that. Maybe we should have some actual experts on this show once in a while.

Shane:

Oh, just because Aaron's got 20 years of experience in the IPO space doesn't mean I can't pretend like I have the same amount of-

AJ:

For sure.

Shane:

... experience.

AJ:

Sure.

Shane:

Shall we dive into articles?

AJ:

I would love to, and I wish I had ChatGPT-4 to tell me what to go to next. Exciting news, ChatGPT-4 was released last night. Lots of exciting updates, the biggest one being that you can now prompt it with not just text, but with images. So you can upload an image and ask it, "How do I fix this?" I was actually trying to use it last night, but I don't think it's actually quite out yet. I think it's coming in the next couple days and I was going to... Let me just tell you the joke that I was going to tell. I was going to upload a picture of you and say, "Why is this person such a clown?" and see what happens.

Shane:

Nice, nice.

AJ:

But wasn't able to execute on my joke, so I will just be lame and tell you about it.

Shane:

Well, I still anticipate the AI's answer to why I'm a clown. Maybe we'll finally get to the answer.

AJ:

Maybe we'll finally get to the end of it, folks. So OpenAI, the company that produced ChatGPT had said in a blog post, I just found this very funny, that the latest iteration and I quote, "Still has many known limitations and we are working to address such social biases, hallucinations, and adversarial prompts," which I think describes most American citizens.

Shane:

Well, there's one place where adversarial prompts pop up. It is on the internet in a chat box. So I'm not surprised by that. I was reading an article that the only people that are actually using it are apparently are all relevant to me. Morgan Stanley apparently has access to it and they're using it to crunch wealth management data. Very curious what that means. I know that each Morgan Stanley advisor has 600 clients, so maybe they're trying to figure out which ones are still alive and which ones they still need to be responsible for. Sad.

AJ:

Who's still got a pulse?

Shane:

Right. It's scanning the list of clients and also the obituaries to see which ones are still alive. And also Duolingo is using it for its new AI-prompted practice, Learning Your New Language. It let me know that I can now pay more. Duolingo let me know I can now pay more to learn Spanish a little bit faster by talking to ChatGPT. ChatGPT-3 also worked in Spanish. I talked to it in Spanish, so I don't know what what's new about it, but here we are.

AJ:

[Spanish 00:06:25]. Fantastic.

Shane:

[inaudible 00:06:27].

AJ:

Speaking of fantastic things that are never going to happen, Biden released his budget plan, which includes plans to tax the rich. We're going to list some highlights here, but folks, do not hold your breath. None of this shit is actually going to get enacted. We get a proposal like this every couple years. The budget is out of control. The United States is in trillions of dollars of debt. How are we going to pay for it? Well, we obviously need to raise taxes. So this plan includes the following, the top tax bracket for individuals is going from 37% back to 39.6%. So it's going to go back up. Going to erase those Trump era tax cuts. So some good things that are in this proposal, the Biden administration would require that the richest 0.01% of Americans pay at least a 25% tax rate. So we're not talking about the 1%. We're talking about a very small pizza slice of 1%. What else, Shane? We got goodbye carried interest. Goodbye beautiful tax carve out for already very wealthy people. Goodbye 1031 exchanges for real estate investors. I thought that was interesting. Have we seen that before? I don't remember if we've seen proposals to get rid of 1031 exchanges in prior acts before.

Shane:

No, that doesn't sound familiar. I'm super down with that. It's just the most complicated thing ever that just benefits wealthy real estate investors. It was originally designed to allow for farmers to not have to recognize gains on transactions revolving around land because there's not really a lot of cash usually involved. Whenever you trade one tractor for another or one big piece of land for another, there's no cash, but there's value, so that was intended for that. It's now become more relevant for people to trade annuities and for real estate investors to swap out a multi-family unit for another, which they have the cash and all those things are kicking out cash. Anyway, bye-bye crypto tax loss harvesting?

AJ:

Yeah, no more of that. We're going to enact wash sale rules for crypto apparently, and then also goodbye tax preferences for oil and gas companies. There's a lot of carve outs in the tax code for investors and partners in oil and gas companies, and there's a proposal to wipe out a lot of that, hopefully to bolster positive movements in climate change.

Shane:

This is all wishful thinking, of course. He has to put forth something to raise taxes. That's his mandate. And to try to shrink... I think this is just positioning to try to get Republicans to recognize that they are actually the ones that expand the deficit typically by reducing taxes, but by not also coming up with ways to pay for the government. And there was a really great tweet from Dark Brandon when he released the budget that said, "250 years have built up the deficit and 25% of the deficit that we now have was enacted by the last administration over the course of four years," so that opened my eyes quite a bit. Like, "Wow." Of course, we had PPP, we had all of the COVID expenses that came from the prior administration. I feel like that's not too terribly fair. We had a once in multiple generations-

AJ:

Black swan event or whatever.

Shane:

Well, hopefully once only global pandemic that required some government intervention.

AJ:

For sure. Oh yeah. I forgot the big proposal is that the capital gains rate for investments would go from 20%, it's currently capped at 20%, up to almost 40%. So that's the big headline here, essentially doubling the long-term cap gains rate, which a lot of our clients and many, many, many Americans rely on for investing in the stock market. I don't necessarily think that's a good idea. I'm curious to read more from smart tax analysts.

Shane:

Yeah. You buried the lead there.

AJ:

But that's my two cents. Yeah, I did. Really, I didn't even bury it. I just completely ignored it.

Shane:

You buried it 12 feet deep.

AJ:

I zoomed right past it.

Shane:

Yeah. There's the concept. A lot of people wonder why you are taxed more on physical labor, on earnings and wages, than passive capital gains, and I struggle to justify that myself. I see where they're coming from here. It has to do with the wealth gap. People that already have funds or already have money are being taxed at lower rates than people that are working. It's something that would be addressed by this administration, unsurprisingly.

AJ:

Absolutely. Absolutely. Speaking of billionaires or billions, Stripe's attempt to raise some capital. We have some movement there. Not a ton else to say. We've discussed this at length in previous episodes, but essentially, there is a deal in its final stages for Stripe to raise $6 billion, and as we've discussed, most of this money is literally going to pay payroll taxes for all of the Stripe employees who need to essentially get control of their stock options and their RSUs. So it's something like 3.5 billion is going directly to the IRS to pay these payroll taxes on income that essentially was recognized but was not actually taxed. So that's fun. So folks, don't feel bad about owing taxes this year. Stripe owes looking like about almost $4 billion in payroll taxes. That would be a nice cutout to the budget maybe.

Shane:

Yeah, it's pretty funny that this is raised for taxes. On another note, the fund closed at a $50 billion valuation for Stripe, which is a 50% dip from its previous round in 2021. So still wondering why they didn't go public in 2021, but here we are.

AJ:

Hindsight is 2020.

Shane:

Yeah, speaking of goofy companies-

AJ:

Hindsight is 2021. Do you think they're going to change it?

Shane:

Hindsight's 2021?

AJ:

Yeah.

Shane:

Maybe they need to throw that up on the wall in the CEO's office over at Stripe.

AJ:

Or get it tattooed in Elvish. Anyway, for some light, fun tax news in the throes of tax season, Twitter has a field day over IRS' call to report income from crimes. This is a funny part of the tax code. IRS publication 525 basically says, "If you steal property, you must report its fair market value in your income in the year you steal it, unless in the same year you return it to its rightful owner." So if I steal your car and as long as I return it to you, I don't have to pay taxes on the value, but if I don't give you your car back within the same tax year, I must report that stolen good as income. People say accountants are boring. I think this is an inside joke by some Congress people from... I don't know where this was enacted, but it is very funny. The text is very, very funny.

Shane:

Yeah, there's a lot of gems in IRS publications in the tax code and there's some crazy stuff, carve outs written for whalers and fishermen. As someone that's spent 12, 15 years occasionally stumbling across little nuggets, this is definitely one of them. The intent, of course, is to, if you get busted for selling drugs to also bust you for not reporting the income, just to pile on top of that. That's what's going on. I think this is how we got Al Capone, right?

AJ:

Yes, exactly.

Shane:

Right. So that's why it's still in there, you all.

AJ:

Yep. We've got a great blog post on Brooklyn FI called The IRS Tax Evasion in You. Actually, one of our planners, Mark, wrote it and it's all about explaining how Al Capone got busted for tax evasion, if you're a tax evasion nerd like we are. I think that's about it. There were really no other big stories in the financial world this week. So I was thinking we could just spend the rest of the episode talking about the fashion show at the Oscars on the red carpet.

Shane:

Oh, for sure. For sure.

AJ:

Just kidding, just kidding. We had one or two major bank collapses over the weekend.

Shane:

One, two, three.

AJ:

One, two, three. And maybe one more on the way. Apparently Credit Suisse is in distress right now.

Shane:

Yeah, that's breaking news. We haven't really parsed that for the podcast, but Moody's downgraded the entire banking system just like they did to Silicon Valley Bank right before the crash and they just downgraded the entire banking system. And then this article from Bloomberg just popped about how the US Treasury is reviewing US bank's exposure to Credit Suisse. Just like 2008, things tend to fall like dominoes in the banking space apparently. So we're keeping an eye on that. We're going to do a little recap of what's going on with Silicon Valley Bank for our listeners and where we're at as of Wednesday, 3:15. AJ, you want to kick us off with this Bloomberg article?

AJ:

Sure. So Bloomberg article, Startup Bank Had a Startup Bank Run. So we obviously have so much to say here. Essentially, what happened here is late on Wednesday night, the Silicon Valley Bank basically said, "Hey, just so everyone knows, we're going to recognize $2 billion in losses on these bond positions that are no longer competitive in the market. They're not worth as much as current bond offerings because interest rates have gone up." That spooked a lot of people, and then Thursday, a bunch of VCs started calling each other and tweeting and saying, "Hey, this isn't looking good. We've got to get our money out of Silicon Valley Bank," this one specific bank that caters to this particular type of customer. They have a lot of not just startup founders, but also actual cash deposits of startups. I don't know why I emphasized that weird. But even public companies, we had Roku and Roblox had literally millions of dollars sitting in bank accounts here to run their companies.

If a thousand people work for you, you have to have a lot of cash in the bank to make payroll, to pay rent on giant skyscrapers. I think, for the average person, it's hard to think of a bank as something that needs to have hundreds of billions of dollars in cash at all times to help out these companies. Anyway, there was a run on the bank, and my favorite expression of a run on the bank is, of course, Jimmy Stewart in It's a Wonderful Life, really explaining what happens when everyone tries to go take out their money at the same time. And essentially, there were not deposits there to cover the rate at which people were withdrawing. So that's generally what happened. I don't know. Who do we blame here? Do we blame bad management at the bank for not seeing this higher interest rate exposure and these big losses that they were potentially shielding?

Do we blame these powerful, wealthy VCs who started this panic that, like you said, Shane, led to a domino effect? Do we blame the CEO of Silicon Valley Bank and other CEOs of these smaller banks who basically tried to roll back protections put in place in 2008? These banks were not as regulated as some of the bigger banks because they flew under the radar. I don't really know who to blame here. I think we kind of blame all of them, and unfortunately... Over the weekend, the Fed acted and said, "Hey, everyone, your money's going to be okay," and hopefully prevented this further domino effect, but as we just learned, I don't think we are out of the woods just yet.

Shane:

Yeah. I guess Jerome Powell's getting his wish with these interest rate hikes. This really wasn't supposed to happen to Silicon Valley Bank. They really got hit by a perfect storm. They were holding those securities to maturity. They were not super long-term securities. They were only going to be held for three years.

AJ:

Short term.

Shane:

Yeah, if they could have just weathered the storm. They didn't even carry them on mark to market on their balance sheet. This is what Aaron and I were talking about, actually, about why, when they were releasing their earnings, did investors not see the giant losses that they were experiencing in the bond investments that they had in their portfolio at December 31st or in January when they released their 10-K. This is a public company. It's because it's like a silly GAAP thing, generally accepted accounting principles. If their intent was to hold those securities to maturity, they did not have to mark them down to their market value, which was a giant loss.

Every time that there's a big negative impact on the market, and somebody was always yelling from the rafters, like Michael Burry was the most famous one from 2008 about the mortgage crisis back then. There was another guy that had noted this that was a hedge fund manager that was tweeting about it back in January. It's kind of interesting that if you have to learn GAAP to be a good investor, to see the differences, read the footnotes, really do the due diligence like Warren Buffet did for all those years, just reading financials, reading newspapers, and to look for the holes in the market that no one else is seeing, it's a lot harder to do that nowadays than it used to be. So if they didn't have to sell them in a liquidity crunch, then those equities would've matured and they would've had the money that they needed-

AJ:

It would've been fine.

Shane:

... to pay their depositors, but instead, they had a quarter of their funds leave in two days. I'm calling this the API bank run. Everyone just hopped on their phone. Peter Thiel said, "Move the money," and all of these portfolio companies moved a quarter of SVP's deposits in one day. Can you imagine if that happened [inaudible 00:20:03]?

AJ:

It's insane, even to us or to anyone. I forgot someone on my list of people to blame, which is just generally the lack of IPOs and the lack of movement in that market. Typically, if you're a startup and you need to get cash, you go to the public market. You have this constant influx of cash that you're spending. Whereas, because so many startups are still relying on funding rounds, they were literally saying, "Okay, we're raising series B. Here's a $100 million coming in." It goes right into the bank. Silicon Valley Bank, they had to put that money somewhere, and a lot of these founders and the people who were buying $10 million houses, typically they would just go turn around and loan that money right out to someone's [inaudible 00:20:46] as they say in It's a Wonderful Life. Shane, your $10,000 is not in the bank. Your $10,000 is in Josie's car over here and Sean's house. But that never happened. They didn't have places to loan this money out to, so that's why so much of it went into these bonds, and that's why we ended up in this crisis. So I also blame the lack of IPOs on my shit list here.

Shane:

Yeah, they borrowed short and invested long, and they got fucked on the spread there. And who else to blame? Digging into the VCs, do we blame these VCs? It's hard to. If you're the last one at the bank, if you found out that everyone else is participating in this bank run, and you're the last one standing there holding the bag, I'm kind of thinking of someone to blame here as the fiduciary standard that general partners have to their limited partners. If you, as a general partner, have to uphold the fiduciary standard and everyone else is doing a bank run, if you left your money there, then you could be sued for not exercising your fiduciary standard to your investors. Even though you have very tight connections with this bank, there is no benefit to leaving the money there. If you can't make payroll, what are you going to do? Get some loyalty points from Silicon Valley Bank?

AJ:

You get Delta SkyMiles, actually. That's what you get.

Shane:

Yeah, what are you going to get?

AJ:

So the FDIC limit up to $250,000, every dollar over that, Delta actually just announced this morning that you can convert all those dollars into SkyMiles. Just kidding. That was a joke. That was a joke.

Shane:

That is some Liquidity Event content right there. For our long-term listeners, [inaudible 00:22:24]-

AJ:

Long time, long time.

Shane:

... you know what truly matters to us.

AJ:

So how does this impact the average person? And that's what was interesting about this bank run is when we saw Washington Mutual fail in, was it 2008 or was a little bit before then, that was a lot of regular people and they were below the FDIC insurance limit of $250,000. At Silicon Valley Bank, I forget what the percentage was, but it was a-

Shane:

3%.

AJ:

Yeah, 3% had just that little money, and everyone else had way over that. The last time the FDIC insurance limit was raised from $100,000 to $250,000 was in 2009. That was 14 years ago. We've seen a little bit of inflation and the world looks a lot different. So I would say I'm lobbying, with my great lobbying powers, for an increase in FDIC insurance. That wouldn't have prevented this crisis, but at this point, if you're saving for a house in a major city, you've got to have your money spread across two banks. $250,000 is pennies if you're of that type of person and you have that type of wealth.

Shane:

Well, actually, I got to correct you there, AJ. There was an update to the FDIC limit that happened last week. It went from 250,000 to an unlimited amount apparently because the FDIC stepped in and they're covering all depositors' funds, which I actually agree with. I think that that is-

AJ:

I agree.

Shane:

It's very goofy to bail out VCs. I don't think that that is... There's moral hazard there, but I forget this one. So a couple companies that were impacted by this, it's impossible for a big company, a startup company, and because there were not IPOs, and because they're VC backed, there was a ton of cash that these companies have. Roku had 27% of their funds at Silicon Valley Bank, which I believe was somewhere in the hundreds of millions of dollars. I know Roblox had hundreds of millions of dollars at Silicon Valley Bank as well. What does the FDIC... What do we really want to happen? Do we want these companies to really be shit out of luck? Do we want Roblox and Roku to not get covered by the FDIC?

AJ:

[inaudible 00:24:29].

Shane:

I think that they don't have any other option that I can think of. What? Are you going to spread that $300 million across 500 bank accounts and just have constant transfers?

AJ:

Right, and I think that's, if I may get in the Fed's head, the reason why they did this. They're not calling it a bailout. Let's not call it a bailout because taxpayers are not paying for it. The shareholders are paying for it.

Shane:

It's not a bailout. Correct.

AJ:

But the reason that they came in and essentially saved the day and reassured everyone was if they didn't do that, all of this wealth would get concentrated at these big banks that are quite, unquote too big to fail. That's what we learned from 2008 was that the government said, "Hey, there's too much of the American economy in JP Morgan, in Bank of America, in the other top five banks." Silicon Valley Bank was what? The 13th or 15th biggest bank?

Shane:

16th.

AJ:

16th. It's not quite too big to fail. They're in this weird middle area where it wouldn't necessarily collapse the entire US economy, but as we have seen, human emotion and panic can absolutely collapse the entire US economy. So that's what we saw.

Shane:

It's not a bailout. Don't call it a bailout. Biden definitely doesn't want you to call it a bailout. What did he say? Dark Brandon came out twice over the past seven days. Not only about the deficit, but also about how the investors are going to lose their shirt. That's how capitalism works. Applaud that. Management, he said that any other banks, because there are three banks, by the way, Signature Bank, Silicon Valley Bank, and Silvergate, I believe, was the other one. The other two, besides SVB, were mostly crypto backed. "It's decentralized, bro. Trust me, bro." So he also said that, "Any bank that needs to be taken over by the government, all of management will be replaced. They will be fired," which is really dark. I was like, "Fuck. What's going to happen to them? Where are you going to take them? Do they go to bailout jail?"

AJ:

Yeah. Speaking of management here, we got this article from CNBC that SVB execs sold $84 million in stock over the past two years. So now we're talking about 10b5-1 plans. Obviously, listeners know my favorite thing to talk about on the Liquidity Event. Let me just do a quick reminder, a 10b5-1 plan is a plan enacted by an executive when they don't have material non-public information. They basically will say, "Hey, these are all the stock trades I'm going to make for the next year or so. Hands off. I can't actually do any other trades because I'm obviously the CEO and will obviously have more information in the future." So what's really sus here is that Greg Becker, our CEO here-

Shane:

Sus.

AJ:

Sus, sus. Where's my soundboard? Super sus.

Shane:

Super sus.

AJ:

Super sus. So Greg Becker puts a 10b5-1 plan in place on January 26th to execute a trade 30 days later of about $3 million of stock. Now, what's really interesting about this for all of my certified equity professional nerds out there is that the 10b5-1 plan rules literally just changed. There is now a 90-day cooling off period, meaning that you put a plan in place and you have to wait three months to make trades. Those new regulations don't go into effect until April 1st. So this guy snuck under the radar, put a 10b5-1 plan in place to have trades execute 30 days later. The SEC is already investigating to see if he did know it was coming, if there were already talks about selling those bonds at a loss. If he knew, then this would absolutely be insider trading and he's going to jail. So, I don't know. I'm pissed.

Shane:

Yeah, it's hard to feel-

AJ:

So, if you're this guy right now, you need to get the fuck out. You need to go on the run. You need to Jean Valjean this shit and assume a new identity and leave because you are in big trouble. There's no way this guy survives this, right?

Shane:

He had to know. William Martin of Raging Capital Ventures blew the whistle on the-

AJ:

Oh, I read that as Raging Waters Capital Ventures. [inaudible 00:28:26] Raging Waters? So sick.

Shane:

Oh, no. I'm long on Raging Waters. On January 18th, he tweeted that there's a ticking time bomb. So the CEO had to know, and the 10b5-1 got slipped in. He sold three and a half million dollars worth of shares. Also, can you blame him? He's getting sued. We'll find out soon enough if there was fraud involved. I don't know about soon enough. I'm sure this case will get swept-

AJ:

This is years.

Shane:

... under the rug, and we won't find out about it. It does not look good on your resume. I'll say that. It doesn't look like he stood up for the investors. The investors are not going to be psyched and whoever bought these shares from him, also not going to be psyched.

AJ:

Also not psyched.

Shane:

Yeah. Somebody lost three and a half mil or more-

AJ:

Or more.

Shane:

... and that was just the [inaudible 00:29:17].

AJ:

Yeah. Look, this is a developing story. Obviously, we'll be talking a lot more about this. We sent out a comprehensive update to our clients over the weekend. It's always fun for us when there are true, not fun for us, fun is the wrong word, but we got basically go into the war room and think through this and think how to communicate this to our clients. Didn't really impact a ton of our clients at all. A lot of clients had questions about, "Hey, is my money safe?" So just generally, if you've got $250,000 or if you have more than $250,000 in a bank, might be a good idea to spread it out a little bit if you're in some of these smaller regional banks, which is what we learned this week. So I'm sure we'll talk about this in future episodes, but let's wrap it up. Thanks so much for listening. You can email us your financial problems and questions at liquidityevent@brooklynfi.com. You can leave us a voicemail at memo.fm/liquidityevent, and we will play it on the air. Show notes at brooklyfi.com/episode85. Thanks for listening.

Shane:

Peace.

Presenter:

Thanks for listening to The Liquidity Event, hosted by AJ and Shane of Brooklyn FI. Head on over to brooklynfi.com where you can subscribe to the podcast or YouTube channel, or if you want to learn about their full service, financial planning, tax, and investment firm specializing in tech professionals and creatives on the path to financial independence. We'll see you next time on The Liquidity Event.