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Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB

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Re: Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB

#131

Post by sneak »

dehrmann wrote: post #106
helloworld wrote: post #92

Earlier quoted context omitted.

"SIPC protects against the loss of cash and securities – such as stocks and bonds – held by a customer at a financially-troubled SIPC-member brokerage firm. The limit of SIPC protection is $500,000, which includes a $250,000 limit for cash." https://www.sipc.org/for-investors/what-sipc-protects

> $500,000 That's way too low. The other thing this exposed is that FDIC protection for businesses is also too low.

It probably hasn't been recently (or ever) inflation-adjusted since it was set.

There are a lot of limits and thresholds like this that could use regular (or even extant) reindexing.

EDIT: it was increased to 250k in 2008 or 2010. As you note this is too low. It seems like it has been rather low its whole history. Given that our inflation rates are basically halving the currency every decade or so, it should be reindexed much more frequently (and also raised in any terms).

Re: Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB

#133

Post by jameshart »

rpeden wrote: post #112
phkahler wrote: post #100

Earlier quoted context omitted.

They don't create money, they loan out deposits. It's not as scammy as people think. You are free to put your cash in a mattress instead.

Sure, but loaning out deposits creates money, does it not? Most of that loaned out money is getting deposited into another bank account. And that deposited loan will (minus a percentage kept in reserve) get loaned out again. And so on, etc. I might be missing something important, though.

Loaning out deposits creates money + debt. The amount of money is cancelled out by the amount of debt.

Re: Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB

#134

Post by 1270018080 »

FormerBandmate wrote: post #53
aynyc wrote: post #38

I think this might be the beginning. I think various funds (public or private) which have capitals stored in SVB is gonna be in a lot of trouble. Every investment firms are probably scanning their portfolios and business cash lines to see how much they are impacted by SVB and similar banks. I wouldn't be surprised to see a run on banks in the next few days/weeks if additional rumors (true or not) come out. Edit: didn…

This is how financial crises start. IndyMac ($40 billion) went under in July 2008 which caused tension, and then Lehman fell apart two months later which led to 15 institutions failing in a matter of weeks. There are other financial institutions that are suffering. We could definitely see cascades among some of the weaker banks

Those banks were all built on a fraudulent and irrational housing bubble. SVB just bought too many bad bonds and got stuck. I don't see the industry-wide effects from this.

Re: Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB

#135

Post by moralestapia »

phkahler wrote: post #100
olalonde wrote: post #72

As a side note, I find it fascinating how fractional reserve banking is not only legal but considered indispensable to the economy. It just sounds like a big scam. Why do private bankers get to create money and decide who gets it? It feels like there has to be a better way.

They don't create money, they loan out deposits. It's not as scammy as people think. You are free to put your cash in a mattress instead.

Sure, but why couldn't be a bank that's just like a money vault and that's it. I don't care if I get no interest, I may even pay a fee for that service.

Re: Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB

#136

Post by [deleted] »

chasd00 wrote: post #58
aynyc wrote: post #38

I think this might be the beginning. I think various funds (public or private) which have capitals stored in SVB is gonna be in a lot of trouble. Every investment firms are probably scanning their portfolios and business cash lines to see how much they are impacted by SVB and similar banks. I wouldn't be surprised to see a run on banks in the next few days/weeks if additional rumors (true or not) come out. Edit: didn…

I just got an email from Mercury saying they’re well capitalized and all is well. “ I want to assure you that Mercury is in a strong financial position (profitable and well-capitalized), and we have a number of ways that we keep deposits on Mercury safe:” Uhoh.

[deleted]

Re: Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB

#137

Post by cplusplusfellow »

1270018080 wrote: post #134
FormerBandmate wrote: post #53

Earlier quoted context omitted.

This is how financial crises start. IndyMac ($40 billion) went under in July 2008 which caused tension, and then Lehman fell apart two months later which led to 15 institutions failing in a matter of weeks. There are other financial institutions that are suffering. We could definitely see cascades among some of the weaker banks

Those banks were all built on a fraudulent and irrational housing bubble. SVB just bought too many bad bonds and got stuck. I don't see the industry-wide effects from this.

The bonds aren’t bad. They are performing according to all reports I’m reading.

They simply have a longer date to maturity then is comfortable for the depositors withdrawal cadences, and they have had to be sold / marked down in a period of rising interest rates.

Re: Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB

#138

Post by Salgat »

dehrmann wrote: post #106
helloworld wrote: post #92

Earlier quoted context omitted.

"SIPC protects against the loss of cash and securities – such as stocks and bonds – held by a customer at a financially-troubled SIPC-member brokerage firm. The limit of SIPC protection is $500,000, which includes a $250,000 limit for cash." https://www.sipc.org/for-investors/what-sipc-protects

> $500,000 That's way too low. The other thing this exposed is that FDIC protection for businesses is also too low.

Businesses are able to buy insurance on top of what FDIC provides. It's only too low if you're foolish enough not to buy additional insurance if needed.

Re: Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB

#139

Post by karpierz »

rpeden wrote: post #112
phkahler wrote: post #100

Earlier quoted context omitted.

They don't create money, they loan out deposits. It's not as scammy as people think. You are free to put your cash in a mattress instead.

Sure, but loaning out deposits creates money, does it not? Most of that loaned out money is getting deposited into another bank account. And that deposited loan will (minus a percentage kept in reserve) get loaned out again. And so on, etc. I might be missing something important, though.

I guess it's unclear what you mean by "creating money". Anytime I lend money to someone, they're going to spend it on something.

They have a liability (their debt to me) and an asset (the thing they "bought", which could be anything from a T-bill, to a bagel). Basically, any debt "creates money."

Re: Roku filed an 8-K saying that of its $1.9B of cash, $487M is stuck at SVB

#140

Post by ausbah »

deelowe wrote: post #118
olalonde wrote: post #72

As a side note, I find it fascinating how fractional reserve banking is not only legal but considered indispensable to the economy. It just sounds like a big scam. Why do private bankers get to create money and decide who gets it? It feels like there has to be a better way.

Because it gives the fed the power to control the economy. That's why it exists...

things would be much worse off without the Fed. look at hard banks lobby to up end the minimal restrictions they have now
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