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Urgent: Sign the petition now
181–190 of 864 posts
Re: Urgent: Sign the petition now
#182LOL, 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.
What socialized loss are you talking about? This seems like TARP, which was a huge gain for taxpayers.
TARP did turn a profit, but there was no guarantee that the US treasury wasn’t going to take a loss on it.
Now, if these companies are willing to sign over warrants for 79.99% of the equity (like the banks did)… well, maybe there’s something to discuss. But otherwise reaping the rewards of capitalism while declining to take its risks - nah, I don’t think so.
Re: Urgent: Sign the petition now
#183LOL, 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.
Do you understand what you're saying though?
The consequence is, cash deposits for thousands of small businesses, are unavailable. The direct consequence is these businesses can't pay payroll, and can't pay vendors.
This isn't about socializing investor's losses. It's about making sure employees, contractors, and vendors get paid by fully backing cash deposits.
Re: Urgent: Sign the petition now
#184Yeah, no. Sorry folks, you have my sympathy, but bailouts are not - IMO - an appropriate role for government to play. Sometimes the breaks are just the breaks. But take heart, maybe this is a sign that it's time for a new business - insurance against bank failures.
Re: Urgent: Sign the petition now
#185Earlier quoted context omitted.
110% agree. At some point, risk HAS to be treated as what it is, risk, rather than just "another way to do things". We have so many banks treating risk as what it is, and pricing for it, well these people decided to go to another bank to get funding, well deal with it. It's not like the average citizen has this luxury.
The equity holders and management of SVB are likely to be wiped. In the petition we specifically call this out: we are not asking for their risks to be "socialized." Depositors have a reasonable expectation that when they choose a bank (especially a publicly traded bank that is regulated) that their deposits are safe. If this is not true, then most people will only bank with the largest banks. That's not a good situa…
The possibility of changing the rules of the game once it's started can create moral hazard. For example, if people believe that the govt will use taxpayers' money to reimburse funds that were not FDIC protected, then they won't be careful about picking their bank.
And it's a lot of money (e.g. 30% loss on $200bn is about $600 per US resident household).
But I'm conflicted, because:
- the federal administration doesn't seem to care about moral hazard or changing the rules of the game retroactively (e.g. handouts to people who borrowed lots of money whilst they were enrolled in college)
- banking is necessary for companies to operate, and it doesn't seem reasonable for every business to become expert in managing counterparty risk
- bank regulation seems to have failed, and that's a responsibility of govt
- it's almost impossible to be neutral about this; if you're a founder/CEO you aren't going to feel you did anything wrong by choosing SVB; if you're a random taxpayer you are going to feel any obligation to pay some west coast companies because their bank failed.
Re: Urgent: Sign the petition now
#186Pathetic to be honest. Yes it’s bad. Yes it’ll get worse if no buyer at 100 cents to the dollar is found by Monday morning. And yet, literally everyone involved signed up for it! It isn’t like there aren’t other banks? The thing had a circus for its risk management office. The big mighty all-knowing VC firms shouldn’t go around crying like babies and signing petitions but be organizing bridge loans until FDIC, the mo…
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Hope should be reserved for good things. I hope the ones who truly had no idea what they were risking come out better and wiser.
Re: Urgent: Sign the petition now
#187Earlier quoted context omitted.
There was nothing arbitrary about that choice. This bank promised better deals BECAUSE they were not careful enough about the risk it entailed. That was their competitive advantage, and they made bank for it. Well, tough luck, now it's not anymore: it has nothing to do with being a large bank or a small bank, it has to do with healthy business practices.
Many startups chose SVB because they were the ones willing to open a bank account for them at all. I remember going to a branch of Bank of America to open a bank account for Posterous and not being able to.
What’s your take on SVB vs. First Republic?
Re: Urgent: Sign the petition now
#188Where 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.
Well, now you are. But the milk's been spilt.
Re: Urgent: Sign the petition now
#189Earlier quoted context omitted.
110% agree. At some point, risk HAS to be treated as what it is, risk, rather than just "another way to do things". We have so many banks treating risk as what it is, and pricing for it, well these people decided to go to another bank to get funding, well deal with it. It's not like the average citizen has this luxury.
The equity holders and management of SVB are likely to be wiped. In the petition we specifically call this out: we are not asking for their risks to be "socialized." Depositors have a reasonable expectation that when they choose a bank (especially a publicly traded bank that is regulated) that their deposits are safe. If this is not true, then most people will only bank with the largest banks. That's not a good situa…
I mean the 250-500k limits have been around for a long time now, that said they are rather low due to inflation. Most larger companies reduce this risk by spreading assets over a number of banks. Just banking with a large bank does nothing if they fail.
Re: Urgent: Sign the petition now
#190Rich fat cats all over Silicon Valley looking for society to socialize their losses. YC has an incredible amount of wealth as it is.