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Urgent: Sign the petition now

ycombinator.com

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Re: Urgent: Sign the petition now

#271

Post by Vt71fcAqt7 »

nocoiner wrote: post #182
flappyeagle wrote: post #70

Earlier quoted context omitted.

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.

I think by "capitalism" you mean "free market" but yeah there is a massive difference between giving loans to massive banks, the larger of which were not going to fail anyway except Morgan Stanley, and giving money to small companies that can potentialy lose all of it (AKA the "start up" business model).

Re: Urgent: Sign the petition now

#272

Post by simonw »

favflam wrote: post #242
afavour wrote: post #57

[deleted]

Also, people should pay attention when a bank is missing a Chief Risk Officer for 8 months during the most volatile period in fixed income history when Fed funds rate moved 400bps. Also, it is not a good look with SVB's CEO personally lobbied to be excluded from stress tests that more than likely would have prevented SVB from YOLO'ing on 10 yr duration MBS.

If you're actively paying attention to things like that as a matter of course then you're a much more effective person than I am.

Re: Urgent: Sign the petition now

#274

Post by SkyMarshal »

garry wrote: post #144
axlee wrote: post #97

Earlier 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…

It honestly seems like the best solution here is for a large bank like JP Morgan or Goldman to acquire SVB over the weekend and guarantee their deposits. SVB isn’t insolvent if their debt assets can be held to term, but the duration mismatch in assets and liabilities, and declining value of some of those assets due to interest rate increases, caused a liquidity shortfall and panic. But of all the types of financial problems a bank can incur, that seems like the easiest to fix via acquisition. Guarantee the deposits, restore confidence, the panic goes away, and the asset portfolio can be restructured appropriately.

The benefit to the larger bank is that SVB’s customer base represents a large chunk of the most innovative sector of the US economy and beyond. And scientific and technological innovation is only going to increase in importance as a main driver of economic growth in the world, as the developing world becomes developed and their growth rates inevitably slow. Acquiring SVB at cost seems like a great deal in that regard, and stops a panic as nice side effect.

Re: Urgent: Sign the petition now

#275

Post by simple-thoughts »

Disgusting. Ycombinator’s network has consistently worked to disrupt the old systems of power to build a new technocracy under their control. Now that they fail to take basic steps to mitigate risks that any basic MBA education would teach, they want a bailout from the same systems they are supposedly disrupting.

This is not the ycombinator I knew.

Re: Urgent: Sign the petition now

#276

Post by nightmarish »

garry wrote: post #167
axlee wrote: post #127

Earlier 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.

[flagged]

Re: Urgent: Sign the petition now

#277

Post by IncRnd »

tiffanyh wrote: post #262
garry wrote: post #90

Earlier quoted context omitted.

These are depositors of a bank. Most startups only have one bank. Startups should live or die because they create good products and solve real problems in real markets, not because they made an arbitrary choice like which bank they started using. There's also a real risk of bank contagion if it is only safe to deposit in the largest banks.

> Startups should live or die because they create good products and solve real problems in real markets What happens if the startup you're referring to is a bank itself?

They can't all be unicorns. Some are going to fail.

Re: Urgent: Sign the petition now

#278

Post by muyuu »

altdataseller wrote: post #129
garry wrote: post #90

Earlier quoted context omitted.

These are depositors of a bank. Most startups only have one bank. Startups should live or die because they create good products and solve real problems in real markets, not because they made an arbitrary choice like which bank they started using. There's also a real risk of bank contagion if it is only safe to deposit in the largest banks.

Why do startups only have 1 bank? I own a bootstrapped startup with literally just 1 employee and am easily able to get an account in Chase or Citi. Why do startups with much more revenue not able to get the same account in major banks?

https://www.bloomberg.com/news/articles/2022-04-07/marc-lasr...

Re: Urgent: Sign the petition now

#279

Post by syntheticcdo »

garry wrote: post #144
axlee wrote: post #97

Earlier 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…

Perhaps I would be more sympathetic had SVB themselves not recently successfully lobbied to have the exact regulations you are asking for to not apply to their bank.

[1] https://www.theguardian.com/business/2023/mar/11/silicon-val...

Re: Urgent: Sign the petition now

#280

Post by PragmaticPulp »

jimrandomh wrote: post #37

Statement by the FDIC: https://www.fdic.gov/news/press-releases/2023/pr23016.html Key paragraph: > "All insured depositors will have full access to their insured deposits no later than Monday morning, March 13, 2023. The FDIC will pay uninsured depositors an advance dividend within the next week. Uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds. As the FDI…

The FDIC’s statement, which is very short and to the point, should be required reading for anyone wanting to discuss the situation.

The FDIC’s handling of the situation appears to be geared toward urgency and keeping depositors up and running. The advance dividend provides significant access to funds beyond the $250K limit.

The number of comments, Tweets, and even opinion pieces I’m reading from people who assume that all money beyond $250K has disappeared is concerning. The FDIC is rushing to provide access on Monday to substantial funds for a takeover that happened on Friday.

Depositors might take a haircut, yes, but the commentary about this being an “extinction level event” is just fear mongering.

I’m sure VCs and investors would love if the government stepped in and covered the remaining X% of missing funds when the dust settles, but the way they’re playing off of public panic to exaggerate the situation is starting to feel distasteful.

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