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Urgent: Sign the petition now

ycombinator.com

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Re: Urgent: Sign the petition now

#391

Post by NikolaNovak »

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.

I think it'd help understand the situation to answer "why not?", and for svb then, "why yes?"

(understanding it may have had little to do with why they tanked)

Re: Urgent: Sign the petition now

#392

Post by AlchemistCamp »

andrepd wrote: post #216
AlchemistCamp wrote: post #159

Earlier quoted context omitted.

Startups have been anything but “socialized losses”. They’ve literally been the growth engine of the country for the past twenty years. According to Brookings, “Annually, venture investment makes up only 0.2% of GDP, but delivers an astonishing 21% of U.S. GDP in the form of VC-backed business revenues.” https://www.brookings.edu/research/as-the-venture-capital-ga...

Who cares if it's 99% of GDP of that is going into the hands of venture capitalists?

Anyone who has really looked at the 2nd order effects.

SV-style tech startups distribute more equity to employees than any other sector of business I know of and the average VC’s returns are worse than private equity, worse than the stock market and worse than real estate. You only hear about the biggest winners, but venture capitalists are taking on very long odds and the vast majority lose. More importantly, we all benefit from the advances the industry leads to—such as this wonderful phone I’m typing this comment into that can access and search nearly any encyclopedia, map or song in the world in seconds, from almost anywhere.

Re: Urgent: Sign the petition now

#393

Post by nuclearnice3 »

SkyMarshal wrote: post #274
garry wrote: post #144

Earlier quoted context omitted.

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 p…

That solution seems possible.

One one hand, end of December, they self-assessed that they had $209.0B in assets and $175.4B in deposits. Enough to pay everyone. [1]

On the other hand, they've suffered some losses. The regulator that closed them explicitly called them out as insolvent. [2] Possibly sloppy language, possibly they have relevant recent information.

I expect we know by Sunday night.

[1] https://www.fdic.gov/news/press-releases/2023/pr23016.html [2] https://www.cbsnews.com/news/silicon-valley-bank-sivb-stock-...

Re: Urgent: Sign the petition now

#394

Post by [deleted] »

garry wrote: post #291
baq wrote: post #24

Pathetic 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…

These are businesses that had a reasonable expectation for their deposits to be there, and we are not advocating for a bailout of SVB's management or equity holders.

[deleted]

Re: Urgent: Sign the petition now

#395

Post by glerk »

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.

I am leaning libertarian and I am very sympathetic to this point of view. However, with the amount of taxes these companies pay and the economic growth they generate, they have every right to ask the question: when does the government benefit us?

If this very costly government is not able to guarantee the integrity of its federal reserve notes deposits, then what is its purpose? What makes it legitimate?

Re: Urgent: Sign the petition now

#396

Post by Laaas »

vorpalhex wrote: post #327
andrepd wrote: post #177

Earlier quoted context omitted.

> Would the taxpayer receive 10% equity in YC? Make that 30–50 and we'd have a deal. Fucked up and want the state to rescue you? Fine, but your business is now mine, future profits and dividends (evabled by the bailout) will be distributed to all Americans, not just the handful of owners of "your" business. It's how the 2008 bailouts should have been handled, instead we got the biggest transfer of wealth from poor to…

The US government made $15B from the 2008 bailouts. That's 0.6% return on investment which is kinda poor but overall the bailout was profitable for US taxpayers.

> 9. Did all the companies bailed out by taxpayers pay the money back?

> Pretty much. The Treasury Department injected $412 billion into banks, carmakers and other struggling companies through the Troubled Asset Relief Program, or TARP. As of the end of last year, it had collected everything it had paid out in bailout funds and then some, leaving the government with a profit of $12 billion.

https://www.washingtonpost.com/business/economy/a-guide-to-t...

(2018)

Re: Urgent: Sign the petition now

#397

Post by School-Cotton »

nightmarish wrote: post #386
School-Cotton wrote: post #126

Earlier quoted context omitted.

Most commenters have a very low-dimensional understanding of politics, and assume if you’re a businessman or capitalist, all failings of Republicans can be attributed to you personally.

[flagged]

None? Where did I claim in my post that I was a capitalist or investor?

Re: Urgent: Sign the petition now

#398

Post by fwlr »

Seems like most people are reacting to this SVB situation through the lens of knowledge they got from watching The Big Short. Maybe try explaining the situation using The Big Short as a metaphor.

The strippers are the startups.

The mortgage jocks who chuckle about getting strippers to sign for mortgages are Silicon Valley Bank.

The CDOs themselves are treasury bonds: the fake AAA ratings are the treasury bond government-backed guarantee of 1.8% return, and the rot inside the CDOs that brings them tumbling down is the Federal Reserve rapidly hiking interest rates.

The smarmy CDO seller is thus the Federal Government.

There isn’t really a Mark Baum or a Michael Burry in this story as far as I can tell.

If this idea sounds stupid to you, consider the empirical evidence that your current approach is exponentially more stupid - being roundly excoriated by the majority of Hacker News comments was not in your model, was it?

Re: Urgent: Sign the petition now

#400

Post by DennisP »

mindcrime wrote: post #213
jarym wrote: post #32

Earlier quoted context omitted.

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?

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? Yes. That's the way this works. Or you can choose whatever risk mitigation strategy you're comfortable with: spread your deposits across multiple institutions,…

People keep talking about buying third-party insurance for this but a quick google didn't turn up any mention of insurance like that. Could you link some?
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