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Silicon Valley Bank’s Assets Seized By US Regulators

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Silicon Valley Bank

The assets of one of Silicon Valley’s top banks were seized by regulators on Friday, marking the largest failure of a U.S. financial institution since the height of the financial crisis nearly 15 years ago.

Silicon Valley Bank, the nation’s 16th-largest bank, failed this week after depositors rushed to withdraw funds amid concerns about the bank’s health. After the failure of Washington Mutual in 2008, it was the second-largest bank failure in US history.

The bank primarily served technology workers and venture capital-backed businesses, including some of the industry’s most well-known brands.

“This is an extinction-level event for startups,” Garry Tan, CEO of Y Combinator, launched Airbnb, DoorDash, and Dropbox and has referred hundreds of entrepreneurs to the bank, told the Associated Press.

“I’ve heard from hundreds of our founders asking for advice on how to get through this. They’re wondering, ‘Do I have to furlough my employees?'”

There appeared to be little chance of the chaos spreading throughout the banking sector, as it did in the months preceding the Great Recession. The largest banks were most likely to cause an economic meltdown to having strong balance sheets and ample capital.

Silicon Valley Bank's Assets Seized by US Regulators

Silicon Valley Bank customers

According to the bank’s website, nearly half of the U.S. technology and healthcare companies that went public last year after receiving early funding from venture capital firms were Silicon Valley Bank customers.

The bank also boasted of its connections to leading technology companies such as Shopify, ZipRecruiter, and Andreesson Horowitz, one of the top venture capital firms.

Tan estimates that nearly one-third of Y Combinator startups will be unable to make payroll within the next month if they cannot access their funds.

Roku, an Internet TV provider, was one of the victims of the bank’s demise. It disclosed in a regulatory filing on Friday that Silicon Valley Bank held approximately 26% of its cash, or $487 million.

Roku stated that its deposits with SVB were largely uninsured and did not know “to what extent” it could recover them.

As part of the seizure, California bank regulators and the FDIC transferred the bank’s assets to the Deposit Insurance Bank of Santa Clara, a newly formed institution. On Monday, the new bank will begin paying out insured deposits. The FDIC and California regulators intend to sell the remaining assets to make other depositors whole.

Silicon Valley Bank's Assets Seized by US Regulators

Attempting to raise capital

The banking sector has been in turmoil all week, with shares falling by double digits. Then, on Friday, news of Silicon Valley Bank’s troubles pushed shares of almost all financial institutions even lower.

The failure struck with lightning speed. According to some industry analysts, the bank is still a good company and a wise investment. Meanwhile, executives at Silicon Valley Bank were attempting to raise capital and find new investors. However, extreme volatility halted trading in the bank’s shares before the stock market opened.

The FDIC decided to close the bank shortly before noon. Notably, as is customary, the agency did not wait until the end of the business day. The FDIC could not immediately find a buyer for the bank’s assets, indicating how quickly depositors cashed out.

Treasury Secretary Janet Yellen is “watching closely,” according to the White House. The administration attempted to reassure the public that the banking system is in much better shape than it was during the Great Recession.

“Our banking system is fundamentally different than it was a decade ago,” said Cecilia Rouse, chair of the White House Council of Economic Advisers. “The reforms implemented at the time provide the kind of resilience that we’d like to see.”

After the value of mortgage-backed securities linked to ill-advised housing loans collapsed in 2007, the world experienced the worst financial crisis since the Great Depression. The Wall Street panic caused the demise of Lehman Brothers, a firm founded in 1847. Because major banks were so intertwined, the crisis caused a cascading breakdown in the global financial system, putting millions out of work.

According to the FDIC, Silicon Valley Bank, based in Santa Clara, California, had $209 billion in total assets at the time of its failure. It was unclear how many of its deposits exceeded the $250,000 insurance limit, but previous regulatory reports showed that many accounts did.

On Thursday, the bank announced plans to raise $1.75 billion to strengthen its capital position. This frightened investors and shares fell 60%. They fell even further before the opening of the Nasdaq, where the bank’s shares were traded.

As the name suggests, Silicon Valley Bank was a major financial conduit between the technology sector, startups, and tech workers. If a startup founder wanted to find new investors or go public, establishing a relationship with a bank was thought to make good business sense.

Founded in 1983 during a poker game by co-founders Bill Biggerstaff and Robert Medearis, the bank leveraged its Silicon Valley roots to become a financial cornerstone in the tech industry.

Bill Tyler, CEO of TWG Supply in Grapevine, Texas, said he first noticed something was wrong when one of his employees texted him at 6:30 a.m. Friday to complain about not receiving their paychecks.

TWG, which has only 18 employees, had already sent the check money to a payroll services provider that used Silicon Valley Bank. Tyler was trying to figure out how to pay his employees.

“We’re waiting on about $27,000,” he explained. “It’s already a late payment. It’s already an awkward situation. I don’t want to ask any of my employees, “Hey, can you wait until next week to get paid?”

Silicon Valley Bank’s ties to the technology sector exacerbated its problems. After a growth surge during the pandemic, technology stocks have taken a beating in the last 18 months, and layoffs have spread throughout the industry. Venture capital funding is also on the decline.

At the same time, the Federal Reserve’s fight against inflation and an aggressive series of interest rate hikes to cool the economy weighed heavily on the bank.

The value of generally stable bonds begins to fall as the Fed raises its benchmark interest rate. That is not usually a problem, but when depositors become concerned and withdraw their funds, banks may be forced to sell those bonds before they mature to cover the departure.

That is precisely what happened to Silicon Valley Bank, which was forced to sell $21 billion in highly liquid assets to cover the unexpected withdrawals. It suffered a $1.8 billion loss on the sale.

Ashley Tyrner, CEO of FarmboxRx, said she had spoken with several friends whose businesses are venture-backed. She described them as “beyond themselves” after the bank’s failure. Tyrner’s chief operating officer attempted to withdraw funds from her company on Thursday but could not do so in time.

“One friend said they couldn’t make payroll today and cried because they had to notify 200 employees,” Tyrner said.

Geoff Thomas is a seasoned staff writer at VORNews, a reputable online publication. With his sharp writing skills and deep understanding of SEO, he consistently delivers high-quality, engaging content that resonates with readers. Thomas' articles are well-researched, informative, and written in a clear, concise style that keeps audiences hooked. His ability to craft compelling narratives while seamlessly incorporating relevant keywords has made him a valuable asset to the VORNews team.

Business

California Disney Characters Are Unionizing Decades After Florida Peers. Hollywood Plays A Role

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ORLANDO, Florida. Throughout his three-year tenure as a parade performer at the Disneyland Resort in Southern California, Zach Elefante has consistently held additional employment to supplement his income.

In contrast to the experiences of his colleagues at Disney’s parks in Orlando, Florida, where there is a limited number of skilled individuals available, the actors who portray Mickey Mouse, Goofy, and other cherished Disney characters in the California parks do not always receive a regular and predictable work schedule from the firm.

That is one of the reasons why Californian artists are currently organizing to form a union, more than forty years after their Florida counterparts did the same.

According to the California performers, Disney requires character performers to have open availability but does not always provide them with set work hours as a result.

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AP – VOR News Image

California Disney Characters Are Unionizing Decades After Florida Peers. Hollywood Plays A Role

“Many performers believe that if they do not make themselves fully available, they will not be cast in shows…” “This will have a ripple effect on other occupations that are necessary for our livelihood in this region,” stated Elefante, a resident of Santa Ana, California.

In recent weeks, the California character performers, along with the Actors’ Equity Association union representing themannounced that they have submitted a formal request for union certification.

In this instance, a different union is carrying out the organizing efforts, and they are happening at a different time. Consequently, it is expected that the California character and parade performers will likely not encounter the same level of animosity that the Disney actors in Florida have had with their union, the International Brotherhood of Teamsters.

The relationship between the performers that bring enchantment to the Magic Kingdom and the Teamsters, a union originally established for transportation and warehouse employees with strong connections to organized crime until the late 1980s, has been tumultuous during the past forty years in Florida.

What is the reason for the California character performers organizing now, several decades after their Florida counterparts? In contrast to Florida, where being a character actor is typically a full-time occupation, many character performers in Southern California have many other engagements, frequently in Hollywood films and television.

Elefante entertains audiences at Universal Studios Hollywood and also serves as a tour guide for the movie studios. Chase Thomas not only performs in the “Fantasmic!” show at Disneyland but also holds the position of director of operations for a theatrical festival. Before this, he worked as a visual effects coordinator and an entertainment licensing agent.

Angela Nichols relocated to California to pursue a career as a television writer. In addition to her role as an entertainment presenter at Disneyland, she frequently engages in writing activities. At Disneyland, she supports the character performers by assisting them during customer interactions.

“Disney truly serves as a fundamental and essential element of the narratives that shape our cultural upbringing.” “The ability to observe individuals fully engaged in these narratives and experience them firsthand is enchanting,” Nichols stated. When we receive support as cast members and performers, we are able to achieve that.” Currently, we are not adequately prepared for success in the necessary manner.

Amidst the COVID-19 epidemic and recent actors’ and writers’ strikes, the character performers sought a more reliable schedule at Disneyland following its yearlong hiatus due to the pandemic. The pandemic has heightened their awareness of health and safety issues, such as embracing guests or maintaining hygienic costumes.

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California Disney Characters Are Unionizing Decades After Florida Peers. Hollywood Plays A Role

The majority of the workforce at the Disneyland Resort in Southern California, which exceeds 35,000 employees, were already part of a labor union. The parades and character department members were included in this group.

“Many cast members aspire to pursue this as a full-time career and succeed,” Thomas stated.

In contrast to their colleagues in Florida, the character actors in California are being organized by a specialized union dedicated to entertainers. Officials of the Actors’ Equity Association possess a deep understanding of the distinctive requirements of theme park performers, which may be challenging for other labor unions to comprehend.

Before a new stage show, it is necessary to conduct tests on the shoes of the costumes to ensure that the actors do not encounter any accidents, such as tripping or slipping while on stage. Union representatives ensure that “face performers,” with visible faces, such as Cinderella, have appropriate cosmetics and verify the availability of ice packs for procession dancers to alleviate knee soreness.

The persistent issue of unclean costumes was a primary motivation for Florida artists to seek organization with the Teamsters in the early 1980s. Additional factors comprised of children striking Disney antagonists, such as Captain Hook in the lower legs and adults reaching for the chests of actors portraying Mickey Mouse to ascertain the gender of the individual within.

Ensuring the cleanliness of costumes was of utmost importance to the character performers in Florida. Over twenty years ago, the Teamsters effectively negotiated a contract language that designated specific underwear for each performer. The performers allowed these undergarments to be taken home for washing purposes. This measure was implemented after instances of pubic lice and scabies were transmitted through the shared clothing.

disney

LA Times – VOR News Image

California Disney Characters Are Unionizing Decades After Florida Peers. Hollywood Plays A Role

In Florida, there has always been a conflict of cultures between the costumed character entertainers and the conventional leaders of the Teamsters Union, who represent truck drivers and warehouse workers. The drivers frequently regarded the performers as individuals leading enchanted existences, remunerated for adorning themselves in costumes on a daily basis, as if it were Halloween.

Tensions reached their climax in the late 2010s when a new leader of the local Teamsters unit in Orlando started singling out the costumed character performers for abuse. The character actors resisted, and the conflict escalated to James Hoffa, the then-leader of the International Brotherhood of Teamsters, who intervened.

Elefante in California is optimistic that union representation will provide artists with a platform to influence decisions regarding many matters, such as the oversized costumes that can lead to long-term injuries if not properly fitted, as well as the safety protocols for performing in parades during rainy weather.

“It is about having the opportunity to participate in the discussion and be included in the decision-making process from the standpoint of the performers,” Elefante stated.

SOURCE – (AP)

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Online Retailer Shein Is Latest To Face Strict European Union Digital Regulations

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LONDON —Shein, an online fast-fashion retailer, has been placed on the European Union’s list of major platforms that require heightened examination. This will subject the company to the bloc’s most stringent digital restrictions.

The European Union’s Executive Commission has officially categorized Shein as a “very large online platform” by the Digital Services Act, a comprehensive set of regulations aimed at improving the safety of online platforms and protecting internet users.

shein

AP – VOR News Image

Online Retailer Shein Is Latest To Face Strict European Union Digital Regulations

Shein is an affordable e-commerce company that originated in China but is currently headquartered in Singapore. Its primary means of reaching clients is through its application. The corporation committed to actively collaborating to establish a secure and lawful environment for our online community.

Leonard Lin, Shein’s worldwide head of public relations, agreed with the Commission’s goal of providing European Union consumers with a secure online shopping experience. He affirmed Shein’s dedication to contributing to this objective. “We also have a shared dedication to the fundamental values of openness and responsibility that form the foundation of the DSA.”

Shein has grown rapidly in the Western market by providing affordable clothing and household products, focusing on younger women. This has been achieved through collaborations with online influencers and celebrities on social media platforms.

shein

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Online Retailer Shein Is Latest To Face Strict European Union Digital Regulations

With its user base exceeding 45 million in Europe, Shein is obligated to comply with the most rigorous regulations by August. The company implements efforts to safeguard online users and addresses and reduces any potential “systemic risks” associated with its services, such as restricting the sale of unlawful or counterfeit items.

According to the Commission, Shein is required to modify its user interfaces and recommendation algorithms to mitigate any potential dangers to customers’ safety and well-being. Additionally, Shein must submit annual risk assessment reports that evaluate the potential harm to consumers, focusing on youngsters.

shein

reuters – VOR News Image

Online Retailer Shein Is Latest To Face Strict European Union Digital Regulations

The European Union has already included 22 prominent technology companies, such as Facebook, TikTok, YouTube, Instagram, Amazon, and Google Search, on its roster of major online services that require the highest level of oversight since the implementation of the Digital Services Act (DSA) last year.

Other online services operating in the European Union are not exempt and must adhere to the law’s main criteria. Infractions can result in penalties of up to 6% of a corporation’s yearly global income.

SOURCE – (AP)

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NASA Astronauts Arrive For Boeing’s First Human Spaceflight

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The location is Cape Canaveral, Florida. On Thursday, the two NASA astronauts designated for Boeing’s inaugural manned space mission arrived at the launch site approximately one week before their planned departure.

Butch Wilmore and Suni Williams have been selected as test pilots for Boeing’s Starliner capsule, marking its inaugural crewed mission following significant delays. On Thursday, they traveled by air from Houston to Kennedy Space Center.

NASA

AP – VOR News Image

NASA Astronauts Arrive For Boeing’s First Human Spaceflight

Scheduled for launch on May 6 using an Atlas rocket, the Starliner spacecraft will go to the International Space Station for a week-long test mission. Boeing is endeavoring to close the gap with SpaceX, which has been conducting manned space missions for NASA since 2020.

Boeing’s two earlier Starliner test flights were unmanned. The initial launch in 2019 was unsuccessful in reaching the space station due to software malfunctions and other technical issues. Boeing replicated the demonstration in 2022. In more recent times, the capsule encountered problems with its parachutes and had to address the issue of flammable tape that needed to be eliminated.

Wilmore emphasized that this is a test flight intended to uncover any anomalies.

NASA

AP – VOR News Image

NASA Astronauts Arrive For Boeing’s First Human Spaceflight

Do we anticipate flawless execution? “This is the inaugural manned voyage of the spacecraft,” he informed the press. “I am confident that we will discover information.” This is the reason why we engage in this activity.

NASA enlisted the services of SpaceX and Boeing ten years ago, allocating billions of dollars to facilitate the transportation of personnel to and from the space station. Despite the space station’s planned closure by 2030, the space agency remains enthusiastic about procuring capsules from two rival businesses to transport its astronauts.

“That is of utmost importance,” Wilmore remarked.

NASA

AP – VOR News Image

NASA Astronauts Arrive For Boeing’s First Human Spaceflight

Wilmore and Williams are set to become the inaugural astronauts to embark aboard an Atlas rocket since NASA’s Project Mercury in the early 1960s.

SOURCE – (AP)

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