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Urgent: Sign the petition now

ycombinator.com

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Re: Urgent: Sign the petition now

#441

Post by somsak2 »

rockemsockem wrote: post #311
andrepd wrote: post #141

Earlier quoted context omitted.

Couldn't agree more. Average Joe is swindled by con-men into bad deals and/or is subject to events outside his control: should have known better/worked more Huge company in the business of risk management fucks up: bad luck, the taxpayer will cover you, no civil or criminal responsibility will come to anyone regardless of the magnitude of the fallout

I don't think startups can be honestly called huge businesses. If you're referring to SVB, then yeah no bailout for them, but the petition isn't calling for that. Isn't it possible to think that both small businesses/startups and average joes deserve to be bailed out when shit goes sideways?

it depends on your definition of bailout. in my mind, if the government has to step in to do anything to make sure that people aren't fucked, that's a bailout.

i also don't think either average joe or bigco necessarily deserve to be bailed out. if i see a tv on fb marketplace and send the asking price to the seller only later to find out that they're scamming me, should i be bailed out for that? if so nobody has any incentive to take basic risk-aversion precautions in economic dealings.

Re: Urgent: Sign the petition now

#442

Post by somewhereoutth »

TuringNYC wrote: post #346
crummy wrote: post #89

Earlier quoted context omitted.

Didn't the public get paid back, plus extra, after bailing out the banks?

>> Didn't the public get paid back, plus extra, after bailing out the banks? To be totally factual, while the public did get paid back, part of the reason is that the Fed started printing money and buying bonds way above asking price to move the market. If you do this enough, prices naturally correct because everyone knows there is a buyer at a certain price and a floor price. The downside is, well, all the printed m…

Which inevitably leads to inflation, requiring interest rate hikes to fix - and here we are.

Re: Urgent: Sign the petition now

#443

Post by garry »

standapart wrote: post #293
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…

With all respect, Garry: YC is to blame for the consolidation of this risk in a single counterparty. Those who led all these entities from the same industry to bank at the same place must be held accountable too.

This isn't some sort of complex bid call option strategy. This is a checking account, and one choice out of many that founders make regularly.

To my knowledge SVB was never required, and startups always had choice.

Re: Urgent: Sign the petition now

#444

Post by drcode »

theGnuMe wrote: post #312
drcode wrote: post #231

Earlier quoted context omitted.

Yeah this is a fact lots of people don't want to accept To be fair though, in the US we've long established an expectation that if you have funds in a bank account at a registered bank, the government would back those funds It's stupid to have set that expectation, but it seems very destructive to suddenly remove that expectation

Your funds are insured up to $250k. That's the expectation and reality. Every account has the disclaimer that amounts in excess of $250k are not insured.

You are right of course, but we've established a moral hazard

There will be a cost to suddenly altering expectations, I guess there's a chance we might see what that cost is now (but probably they will just get a boring bailout)

Re: Urgent: Sign the petition now

#445

Post by nuclearnice3 »

rahimnathwani wrote: post #185
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…

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…

> And it's a lot of money (e.g. 30% loss on $200bn is about $600 per US resident household).

This calculation really put it in perspective.

CEO of HN asks that every family in America send his friends $500.

Re: Urgent: Sign the petition now

#446

Post by Denvercoder9 »

nosefrog wrote: post #230

Unpopular opinion: the government should try to make depositors of banks whole when their banks fail.

That's literally what FDIC does it. It guarantees the first $250K, and sells the failed bank's assets to cover as much as possible above that amount. It's not as if all deposits are completely gone now, most commentary I read expects that at least 80% or so will be recovered, it might just take a while.

Re: Urgent: Sign the petition now

#447

Post by _dain_ »

mberning wrote: post #193

This is just brazen. These people play all kinds of financial games, run business right at the margin of what is legal, decry regulation or legislation that “hurts their competitiveness” (abusing 1099 employees anybody?) and then cry out immediately for a bail out as soon as they feel an ounce of pain. Maybe these CEOs and VCs can fund payroll for a few pay periods. Edit: I fully expect the YC sycophants to flag this…

do you understand the difference between a depositor and an shareholder?

Re: Urgent: Sign the petition now

#448

Post by cmurf »

cactusplant7374 wrote: post #404
garry wrote: post #315

Earlier quoted context omitted.

$250,000 will be available initially, which is doable for payroll of up to 15 to 25 people for one month, generally if you're a startup. FDIC website indicates remediation time in the months-to-years. This is the concern.

Why did YC encourage startups to put their eggs in one basket?

Or not encourage them to have multiple bank accounts so that deposits are fully FDIC insured?

In effect, it encourages concentrating deposits in a single bank. Benefits the bank, does not benefit the depositor.

Re: Urgent: Sign the petition now

#450

Post by professoretc »

scarface74 wrote: post #409
rahimnathwani wrote: post #185

Earlier quoted context omitted.

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…

While I saw first hand what happened in 2008 and afterwards I said “fuck it” and let my three underwater properties that were combined worth a quarter million less than I owed go and did “strategic defaults”, I can’t imagine running a business and having my funds spread across enough banks to meet the $250K protected amount and still try to run payroll and meet all of my other obligations.

You don't necessary have to have all your funds spread out enough that every account is under 250k; you just have to determine how much you are willing to risk. E.g., if you split your funds between two banks, if one of them goes under, you lose 50%. Your risk threshold determines how many splits you need; only if it's 0 do you need to keep every account under 250k.
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