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Urgent: Sign the petition now

ycombinator.com

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Re: Urgent: Sign the petition now

#131

Post by nocoiner »

jarym wrote: post #32
nocoiner wrote: post #8

LOL, nope. Not interested in taking another spin on the “privatize gain, socialize loss” merry-go-round. The banks had to be saved in 2008 because they were, like, the financial system. I don’t see why private companies and funds that are much less integral to the functioning of the economy as a whole should be saved by the public fisc. Sorry about your disruption.

Are you saying if I deposit more than $250k (which is NOT a lot for a business) into a reputable and regulated US bank at negligible rates of interest I should just accept the impact of the bank shutting down due to events unrelated to my actions and choices? And that my deposit should vanish into thin air?

Look up CDARS. There are well known cash management strategies that solve for exactly this set of circumstances. I’m not really sure why taxpayers are supposed to backstop CFO competence?

But to answer your question, yeah, I think the equity in a for-profit business takes the risks and rewards of capitalism as they come.

If the owners didn’t want to lose the basis points by holding cash in CDARS or liked the interest paid by SVB (approximately twice the median of other financial institutions), they probably shouldn’t have been trying to pick up pennies in front of steamrollers or expecting taxpayers to save them from the consequences of that freely made decision. Capitalism, baby.

Re: Urgent: Sign the petition now

#132

Post by burlesona »

I mean YC and all the VCs killed SVB by causing a run on the bank. This is not the only business that VCs have harmed by spreading FUD (in many cases unfounded or even fabricated with dubious motives), and then acting as a herd. I have tremendous sympathy for the many small startups who had nothing to do with this, but a lot less for the VCs in this case.

SVB was well capitalized and while there could be losses here they should be small, especially given the FDIC shut down the bank pretty quickly.

I do think the government needs to resolve the deposits fast so every involved company can figure out whether and exactly how much haircut they’ll get and get on with their business ASAP. The big mistake I think the government could easily make is to let this take months to unwind, which would unnecessarily kill businesses that could be fine even with small losses as long as they get access to their capital restored immediately.

Re: Urgent: Sign the petition now

#133

Post by prepend »

What would I gain as a taxpayer in return for this bailout?

Would the taxpayer receive 10% equity in YC?

It seems like YC could have insured these funds, but didn’t. They saved money and accepted the risk. This risk is now realized.

Seems bizarre that YC would be made whole. Certainly it saves jobs, but it benefits YC more than anyone else.

Re: Urgent: Sign the petition now

#134

Post by doodlesdev »

AlchemistCamp wrote: post #72
dougmwne wrote: post #14

I honestly can’t think of a sector less deserving of a bail out.

Why is that? This is small and medium sized venture-backed startups, a sector that’s taken a tiny fraction of US investment but represented a major portion of its GDP growth. They did nothing wrong and were failed by their bank. Why are small tech startups building something new less deserving than say, giant banks that knowingly took extreme risks in 2008, or giant auto businesses that refused to modernize and truly…

They did something, they put their money in a bank which was lobbying for less regulations so they could make riskier plays, which put way too much depositor money into MBS (what the actual fuck). They didn't do their due diligence and now they are paying the price. They will receive dividends in advance and any employees which for some reason had money in the bank will still keep their 250k FDIC insured cash. If they had more that's their problem, 250k is a lot.

Anyways, I'm not American so this doesn't affect me directly (not my money), but as an outsider I find it ludicrous how accepting everyone is being about mismanaged banks and companies that didn't do their due dilligence. I thought America was all about owning the consequences to your actions, but when shit hits the fans everyone forgets about it and comes back asking for help from Uncle Sam.

Re: Urgent: Sign the petition now

#135

Post by lotsofpulp »

Ekaros wrote: post #69

Wasn't more unemployment a goal to combat inflation? So wouldn't it be good thing for bigger economy that some jobs were now lost. Thus push inflation pressure lower? Meaning that any sort of action really shouldn't be taken for greater good of economy.

But not these jobs, because these jobs belong to people in networks adjacent to Y Combinator leadership, so they might be negatively affected.

Re: Urgent: Sign the petition now

#136

Post by muyuu »

_9hey wrote: post #65

Should have started with “ We are not asking for a bank bailout. ” Edit: my opinion reversed. I actually with the replies here. It is effectively what YC is asking for. It’s a matter of choosing who suffers: investors or private home buyers? Because Mortgage Backed Securities have been screwing individual home buyers for years.

it would make it even more apparent that it is

Re: Urgent: Sign the petition now

#139

Post by toomuchtodo »

garry wrote: post #112
toomuchtodo wrote: post #29

Where was YC when SVB lobbied against stronger regulation so they could take more risk? Crickets. Edit: Sources in my other comment https://news.ycombinator.com/item?id=35114110

We are advocating better regulation to prevent this from happening in the future. It's in the petition.

Thanks for the reply Garry. I’m a random nobody here, but I just don’t understand how so much of YC had exposure to this institution and no one was checking in on this. It’s a systemic failure.

Demo days are great and pump the pipeline. Who’s doing your third party and vendor risk management across the portfolio? Who is doing and monitoring public policy? Rhetorical, not meant to salt the wound, I genuinely want YC to learn from this and do better.

Re: Urgent: Sign the petition now

#140

Post by wankerrific »

Kyragem wrote: post #35

Trump & republicans cut banking regulations and increased capital thresholds from 50 to 250 billion for banks to comply with an FDIC stress test as mandated by Dodd-Frank (which was enacted after the mortgage crisis). SVB would have not gone bankrupt had they been required to pass this stresstest. This change was widely supported by tech companies and banks and here we are again with a bank engaging in risky behavior…

Socialism for the rich. Rugged capitalism for the poor.
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