[pgwhalen]

It turns out that there was very little defaulting in 2008, the problem was the fear of default which resulted in changing valuations that were not broadly expected.

In this case, there is no doubt about the value of SVB’s assets: they’re lower than they were a year ago simply because they were heavily long duration and rates went up a lot. That’s bond pricing 101.

That, in combination with a low diversity of depositors that starting withdrawing at once, set up the bank run that VCs created by emailing all their portfolio companies to run.