In addition to the many local tech companies large and small that are likely to be impacted by the collapse of Silicon Valley Bank (SVB), we're learning that they were a major lender and banking partner for the wine industry, accounting for about 2% of the bank's total business.

Money managers at companies across the region are scrambling to figure out what they will have in terms of cash and credit next week in order to make mid-month payrolls, following Friday morning's swift collapse of Silicon Valley Bank.

"No one has the answer," says Ryan Gilbert, founder of venture firm Launchpad Capital, speaking to CNBC. At issue will be all the companies that have deposits at SVB totaling more than $250,000 — or payrolls on March 15 that exceed that amount. The FDIC has taken SVB into receivership, and has set up a new bank called the Deposit Insurance National Bank of Santa Clara, which will handle all insured deposits, up to $250,000, next week. Amounts over that will need to be recovered as the feds liquidate the bank's assets — which could take time, and not all that money may be recovered.

As the Chronicle reports, the collapse of SVB could have massive and widespread repercussions for the Bay Area wine industry, where the bank has reportedly extended $4 billion in loans over the last 30 years.

Calling the bank the "go-to financial institution for the California wine industry," the Chronicle suggests that payrolls for farm workers could be held up next week, and so could any pending deals to buy vineyards or wineries. Also, any winery that takes credit card payments in their tasting rooms using SVB could have problems as well.

Then you have what the future may hold for wineries whose growth has depended on the knowledge base that was built up at the wine division of SVB.

As one winemaker, Jasmine Hirsch, at Hirsch Vineyards in Sonoma County, tells the Chronicle, "So much of our business’ assets are tied up in inventory. And who understands wine inventory? How do you value it? How can you borrow against that if you don’t know how to value it?"

It's an example of how intertwined the tech industry has become in so many aspects of the Bay Area economy.

Pundits and analysts are already suggesting that Silicon Valley Bank was a special case, and not indicative of the larger banking industry — having spent decades taking risky bets on startups which, in the economic environment of the last year with interest rates rising, left them sitting on a house of cards.

"Everyone on Wall Street knew that the Fed’s rate-hiking campaign would eventually break something, and right now that is taking down small banks," says Ed Moya, senior market analyst at Oanda, speaking to CNN.

Overall, though, says Moody’s chief economist Mark Zandi to CNN, no one should see this as the first domino falling like in 2008. "The system is as well-capitalized and liquid as it has ever been. The banks that are now in trouble are much too small to be a meaningful threat to the broader system."

He did say "banks" plural, though, and Treasury Secretary Janet Yellen is said to be monitoring a "few" other banks, per Bloomberg.

Previously: Silicon Valley Bank Shut Down By Regulators In Biggest Bank Failure In 15 Years

Photo: Jim Harris

In what may be a harbinger of more hard days ahead for the tech world in the Bay Area, a prominent lender to startups and one of the 20 largest banks in the country, SVB Financial Group or Silicon Valley Bank, has failed.

There was a run on the bank Friday morning as it appeared in desperate straits and seeking to be bought out, and trading in the bank's stock had to be halted following a Wall Street panic. Now the bank, which held $210 billion in assets, has been fully shut down by state regulators and it's been put into receivership with the US Federal Deposit Insurance Corporation.

As CNN reports, "The FDIC is acting as a receiver, which typically means it will liquidate the bank’s assets to pay back its customers, including depositors and creditors."

The FDIC said in an announcement Friday morning that SVB customers are expected to be able to access their deposits and withdraw assets no later than Monday, March 13. And, the agency said, SVB's checks would continue to clear in the interim. But, as the New York Times notes, the FDIC has limits on the size of deposits it insures, and customers with accounts holding more than $250,000 may not see all their money returned, or not right away.

SVB is the 16th largest bank in the country, and multiple news sources have noted that this is the biggest bank failure in the U.S. since Washington Mutual's collapse in 2008.

The panic began on Thursday, as Axios reports, when "SVB announced a $2.25 billion balance sheet bolstering plan, after rising interest rates had sparked losses on its Treasury and mortgage-backed securities portfolios."

The extent of the bank run is not known, but because of the stock collapse — in which the company lost 60% of its value in pre-market trading Friday morning — the bank began immediately seeking a buyer.

Also, when it comes to blame, as Axios writes, "SVB appears to have not fully appreciated the diverging dangers of rising rates and falling venture capital investment levels. But, more importantly, its response yesterday was miserable."

CNBC notes that, according to Wall Street analysts, the collapse of SVB is "unlikely to spread widely throughout the banking system," and "Morgan Stanley said in a note to clients that SVB’s issues were 'highly idiosyncratic.'"

The local repercussions of this, though, could be widespread. Stay tuned.

Top image: People line up outside of the shuttered Silicon Valley Bank (SVB) headquarters on March 10, 2023 in Santa Clara, California. Silicon Valley Bank was shut down on Friday morning by California regulators and was put in control of the U.S. Federal Deposit Insurance Corporation. Prior to being shut down by regulators, shares of SVB were halted Friday morning after falling more than 60% in premarket trading following a 60% declined on Thursday when the bank sold off a portfolio of US Treasuries and $1.75 billion in shares to cover declining customer deposits. (Photo by Justin Sullivan/Getty Images)

Less than a day after we learned of a planned layoff of 5,400 employees at Uber, rival rideshare company Lyft just announced that it will lay off 17 percent of its workforce, or 982 people, in order to address losses that it faces due to pandemic lockdowns. And employees say they were mistakenly all sent an email earlier this week using an insensitive name for the cost-cutting project.

Lyft announced the move today in a regulatory filing with the Securities and Exchange Commission, and in addition to the layoffs, 288 employees will be furloughed for 12 weeks, and all remaining employees will take cuts to their base salary for 12 weeks starting in May. As CNBC reports, top executives will be taking a 30-percent reduction in pay, vice-presidents a 20-percent cut, and everyone else will take a 10-percent cut for three months.

As it pays out severance and benefits for laid off employees, the company expect to incur an extra $28 million to $36 million in second-quarter expenses.

In response to the cost-cutting measures, Lyft's stock was up 4 percent in afternoon trading, to around $34 per share. Lyft's stock hit a six-month high of $54 back in February before tanking with the rest of the stock market on March 18, bottoming out around $16.

News of layoffs to come reportedly spread like wildfire among the ranks of Lyft employees earlier this week after an email mistakenly was sent company-wide referring to a "Project Jetty," which some employees took to refer to the word "jettison." An anonymous source tells SFist that the email disappeared from inboxes but had been screenshot, and was being openly discussed on company Slack channels. Update: A source has subsequently shared what may be the email in question — it looks like it was actually a calendar invite with the title "Jetty" that referred to employees on "leave of absence."

"Employees are shocked at the insensitivity of the project name/email language at this time," the original source said said. "They have been promised layoffs are not happening following weeks of assurance from upper level authorities who have repeatedly emphasized the company’s vast amount of runway."

Another source within the company said that the word "jetty" in the project name was simply referring to a structure that extends into water to create safe harbor.*

An email has subsequently gone out to employees today, and reporter Kate Conger quotes it on Twitter as saying, "Even after stay-at-home orders are lifted, a looming recession will significantly reduce overall global spending, business travel, and major events. We did not initially have plans for layoffs, but now must be prepared for these implications."

In addition to the Uber layoff news — reported by The Information on Tuesday and likely still shaking out within the company itself — this week also saw layoffs at Boeing and San Francisco-based Juul Labs. After laying off 650 people last year, Juul is planning to further cut a third of its remaining workforce, or between 800 and 950 employees, according to the Wall Street Journal.

*This post has been corrected to show that no company meeting is scheduled for May 3.

While style-free male nerds and affectedly geek-chic (vomit) young girls continue to make a killing in Mission Bay, SOMA, and Silicon Valley, the rest of the country still feels the pinch of post-recession unemployment. According to a report released today, key factors (i.e., job creation, unemployment, length of the workweek and hourly earnings) in job creation have more or less stalled. Carolyn Lochhead from SF Chronicle reports:

Today's report that a miniscule 18,000 jobs were added in June, and the sharp downward revision of May's already small estimate of a 54,000 gain to just 25,000 provides the clearest evidence yet that the recovery has stalled. These numbers will play directly into the debt negotiations that may culminate in a White House meeting Sunday, playing into Democratic arguments against immediate spending cuts, and GOP arguments against tax increases. A stalled recovery would put President Obama's re-election in clear jeopardy.

Not good.

With another stint in the White House in clear jeopardy, President Barack Obama released the following response to the unemployment report.

Remarks by the President on the Monthly Jobs Report

11:05 A.M. EDT

THE PRESIDENT: Good morning, everybody. Obviously, over the last couple of days, the debate here in Washington has been dominated by issues of debt limit, but what matters most to Americans, and what matters most to me as President, in the wake of the worst downturn in our lifetimes, is getting our economy on a sounder footing more broadly so the American people can have the security they deserve.

And that means getting back to a place where businesses consistently grow and are hiring, where new jobs and new opportunity are within reach, where middle-class families once again know the security and peace of mind they’ve felt slipping away for years now. And today’s job report confirms what most Americans already know: We still have a long way to go and a lot of work to do to give people the security and opportunity that they deserve.

We’ve added more than 2 million new private sector jobs over the past 16 months, but the recession cost us more than 8 million. And that means that we still have a big hole to fill. Each new job that was created last month is good news for the people who are back at work, and for the families that they take care of, and for the communities that they’re a part of. But our economy as a whole just isn’t producing nearly enough jobs for everybody who’s looking.

We’ve always known that we’d have ups and downs on our way back from this recession. And over the past few months, the economy has experienced some tough headwinds -- from natural disasters, to spikes in gas prices, to state and local budget cuts that have cost tens of thousands of cops and firefighters and teachers their jobs. The problems in Greece and in Europe, along with uncertainty over whether the debt limit here in the United States will be raised, have also made businesses hesitant to invest more aggressively.

The economic challenges that we face weren’t created overnight, and they’re not going to be solved overnight. But the American people expect us to act on every single good idea that’s out there. I read letter after letter from folks hit hard by this economy. None of them ask for much. Some of them pour their guts out in these letters. And they want me to know that what they’re looking for is that we have done everything we can to make sure that they are rewarded when they’re living up to their responsibilities, when they’re doing right by their communities, when they’re playing by the rules. That’s what they’re looking for, and they feel like the rules have changed. They feel that leaders on Wall Street and in Washington -- and believe me, no party is exempt -- have let them down. And they wonder if their efforts will ever be reciprocated by their leaders.

They also make sure to point out how much pride and faith they have in this country; that as hard as things might be today, they are positive that things can get better. And I believe that we can make things better. How we respond is up to us. There are a few things that we can and should do, right now, to redouble our efforts on behalf of the American people.

Let me give you some examples. Right now, there are over a million construction workers out of work after the housing boom went bust, just as a lot of America needs rebuilding. We connect the two by investing in rebuilding our roads and our bridges and our railways and our infrastructure. And we could put back to work right now some of those construction workers that lost their jobs when the housing market went bust. Right now, we can give our entrepreneurs the chance to let their job-creating ideas move to market faster by streamlining our patent process. That’s pending before Congress right now. That should pass.

Today, Congress can advance trade agreements that will help businesses sell more American-made goods and services to Asia and South America, supporting thousands of jobs here at home. That could be done right now. Right now, there are a lot of middle-class families who sure could use the security of knowing that the tax cut that I signed in December to help boost the economy and put a thousand dollars in the pockets of American families, that that’s still going to be around next year. That’s a change that we could make right now.

There are bills and trade agreements before Congress right now that could get all these ideas moving. All of them have bipartisan support. All of them could pass immediately. And I urge Congress not to wait. The American people need us to do everything we can to help strengthen this economy and make sure that we are producing more jobs.

Also to put our economy on a stronger and sounder footing for the future, we’ve got to rein in our deficits and get the government to live within its means, while still making the investments that help put people to work right now and make us more competitive in the future. As I mentioned, we’ve had some good meetings. We had a good meeting here yesterday with leaders of both parties in Congress. And while real differences remain, we agreed to work through the weekend and meet back here on Sunday.

The sooner we get this done, the sooner that the markets know that the debt limit ceiling will have been raised and that we have a serious plan to deal with our debt and deficit, the sooner that we give our businesses the certainty that they will need in order to make additional investments to grow and hire and will provide more confidence to the rest of the world as well, so that they are committed to investing in America.

Now, the American people sent us here to do the right thing not for party, but for country. So we’re going to work together to get things done on their behalf. That’s the least that they should expect of us, not the most that they should expect of us. I’m ready to roll up my sleeves over the next several weeks and next several months. I know that people in both parties are ready to do that as well. And we will keep you updated on the progress that we’re making on these debt limit talks over the next several days. Thank you.

Q How was the meeting with Mrs. Pelosi?

THE PRESIDENT: It was good.

Obviously, George W. Bush is to blame for this entire mess. We kid! In fact, we don't even know where to being the finger-pointing. Feel free to do so in the comments.

"Sign o' the Times" by Darwin Bell.

After 35 years of providing mental health, substance abuse, and senior services to the LGBT community, HIV/AIDS patients and beyond, New Leaf announced it will close its doors by the middle of October. Why? Because it ran out of money. Everything from high operational costs, reportedly poor management, and a tenacious economic crisis are to blame.

"There were a lot of tears around the table. Some of the board members were former clients at New Leaf; one was a long-term client. This hits people personally," Thom Lynch, interim executive director of New Leaf, explained to the Bay Area Reporter. "It's very, very sad, but I'm also really proud of the organization for taking a really hard look at itself and making a tough decision."

Fortunately, other local organizations serving the queer community will pitch in to assist clients who rely on New Leaf services. SF Appeal reports, "The Lyon Marin Health center and San Francisco AIDS Foundation will step in to help mental health and substance abuse cases. HIV and AIDS patients will be referred to the AIDS Health Project."

According to Associated Press, "The Obama administration is providing $3 billion to unemployed homeowners facing foreclosure in the nation's toughest job markets with the largest chunk coming to California." The Golden State will receive $476 million, with Florida netting nearly $239 million, Illinois receiving $166 million, and Ohio landing a cool $149 million.

Young, twentysomething Californians with advanced degrees are figuring out what Nancy Botwin has known since her husband died: growing and selling marijuana on the black market in a down economy is a swell idea. J.B. Powell (who used to write for the Bay Guardian) penned an article about regular Bay Area folks growing pot in order to stave off eviction, hunger, and creditor calls.

"For me, I'm just looking for this to help me pay rent, utilities, basic things like that," a "slender, bearded 27-year-old" explains to Powell. "Once this gets going, it requires minimal day-to-day maintenance. It's just starting it up that's hard, but I have time for that right now."

Some of these small-time growers are also using (presumably bogus) medical marijuana prescriptions to get plants.

"You can get your clones at any club for like 12 bucks," says a "Nordic-looking blond" with a newborn kid and tens of thousands of dollars in student loan and credit debt. "It's amazing, high-yielding weed that basically grows itself. You don't have to do any of the traditional stuff like breeding the best strains. You don't have to do any hybridizing. I mean, I've never had to own a male plant."

Good tip.

Anyway, since growing and selling is illegal for the Average Joe, it's proving most beneficial for these young adults. One grower, "Adam," who plans to vote no on the November legalization measure, says, "There's no doubt that an operation like this benefits from the black market ... I mean, it's still worth more than its weight in gold right now. But if anybody can suddenly grow it, it'll probably wind up worth about as much as tomatoes."

In the end, it's just pot. Selling it, arguably, isn't a moral offense. It's as bad as, say, selling bad cocaine at nightclubs or pure heroin to toddlers. Read more at Salon.

We know all of you are *riveted* by real estate news, but we thought you might like to know that sales seem to be picking up speed both in pricier and hard-hit zip codes around the Bay, and according to new data from ZipRealty, 6 of the 10 top zip codes in the country for home sales are right here.

Though the residential sales market is crap pretty much everywhere, realtors in Berkeley, Oakland, and San Jose are seeing people purchasing homes at significant percentages above asking price as more buyers flood back into the market in search of deals. In Berkeley's 94703 zip code, which takes the top national spot, the area's average list price was approximately $575,000, and the average sales price was $619,574 between April and June. In two less affluent and recession-weary zip codes near the Oakland airport, homes were selling at $6K above asking, averaging around $125,000. Other "hot" zips were in San Jose.

by Rachel Brodsky

According to personal finance aficionado and BusinessWeek's economics editor Chris Farrell, frugality is back. And while this isn't anything we didn't already know, no one ever tires of taking in new strategies for making the most out of every dollar.

Gone are the days of frittering away every paycheck on Crate & Barrel goodies--these recessionary times ask us to seek the softer side of Sears, or in a likelier scenario, Freecycle. And yes, the Great Recession may be dying down, but no one's seen their pockets jingle yet. In Farrell's new book The New Frugality, he presents a number of ways for moving forward in our slumpy economy without totally going broke. Not only does Farrell point out the ways in which we can be frugal, he discusses the ways in which global climate change affects us and concludes that frugality and "going green" can and should go hand in hand. Purchasing things that are affordable AND sustainable, Farrell argues, is the key. So don't be cheap (Burger King), be frugal (Trader Joe's).

Farrell will be reading selections from The New Frugality tonight at Booksmith, starting at 7:30pm.

What: Chris Farrell reads from The New Frugality: How to Consume Less, Save More, and Live Better
Where: Booksmith (1644 Haight)
When: Friday, January 22 (7:30pm)
How Much: Free!

Sad news. Due to the state's continuing economic woes, the San Francisco Society for the Prevention of Cruelty to Animals, for the first time in its 141 year history, will close on Mondays. According to DogBlog, "the SPCA has suffered from reduced contributions and staff layoffs (16 employees were let go earlier this month) and its Maddie’s Adoption Center will no longer be open on Mondays in an effort to eliminate a $3.5 million deficit.

Mondays at the SPCA, it seems, were crucial because a lot of pet owners would come in that day, looking for their lost pets. SFGate has more.

While some have declared the recession over, more or less, California's job rate might disagree. In August, we witnessed the jobless figure "climb to 12.2 percent last month, the highest on records dating back to the 1970's,"n according to CBS5/AP. But California wasn't the only state to see crowds converge at unemployment offices. "Forty-two states lost jobs last month, up from 29 in July, with the biggest payroll cuts coming in Texas, Michigan, Georgia and Ohio." Sigh.

In an effort to become "more of a true Web publication," the AP English class of the interwebs, Salon.com, laid off six editorial staff members. CEO Richard Gingras confirmed to Gawker that the online publication chipped away three editors, one writer, one photo editor, and one producer. The only name identified of the fallen six is culture editor Joy Press. Heather Havrilesky, we can only pray to God, will still remain with Salon after its facelift. Forever. She is, after all, a national treasure, one of the few literate folks who can write about TV without making you want to rip off your eyelids. She's that good. (And, of course, there's this.) Anyway, good luck out there, ex-Saloners.