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Urgent: Sign the petition now

ycombinator.com

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Re: Urgent: Sign the petition now

#541

Post by [deleted] »

lolinder wrote: post #308
jlmorton wrote: post #160

Earlier quoted context omitted.

Sorry, I'm not sure if you're confused, but these are simple bank accounts. There was no high interest yield. The average interest yield was a fraction of a percent. No one was chasing any yield. No one was taking any risks. It's a bank account. Are you suggesting tens of thousands of small business customers need to do due dilligence on the investment practices of their banks? And what about all the other regional b…

They were definitely doing high interest yield: > ## Up to 4.50% annual percentage yield > Help make your money last longer with our Startup Money Market Account. Like with a savings account, you’ll earn up to 4.50% APY on deposits — so you gain a longer runway. Certain restrictions apply. https://www.svb.com/startup-banking

[deleted]

Re: Urgent: Sign the petition now

#542

Post by concinds »

baq wrote: post #356
garry wrote: post #291

Earlier quoted context omitted.

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.

Sir you should talk rather firmly to your VC friends who told their portfolio companies to withdraw to maybe not spread FUD next time because things happen. It sucks this time around. Get those founders bridge loans instead of replying to a rando on the internet (though I appreciate the opportunity to interact).

If you want to understand why SVB failed, feel free to read writeups in proper financial publications, like FT or Bloomberg, and please avoid "mainstream" sites by clueless journos with zero finance knowledge. This one is good: https://www.ft.com/content/0387e331-61b4-4848-9e50-04775b4c3...

SVB didn't fail because of "FUD", but because of a dumb decision to invest at the top. SVB is squarely at fault here.

Re: Urgent: Sign the petition now

#543

Post by Asparagirl »

jlmorton wrote: post #160
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.

Sorry, I'm not sure if you're confused, but these are simple bank accounts. There was no high interest yield. The average interest yield was a fraction of a percent. No one was chasing any yield. No one was taking any risks. It's a bank account. Are you suggesting tens of thousands of small business customers need to do due dilligence on the investment practices of their banks? And what about all the other regional b…

> "Are you suggesting tens of thousands of small business customers need to do due dilligence on the investment practices of their banks?"

Golly, some of us even chose non-banks, and use local credit unions. There are millions of us!

Re: Urgent: Sign the petition now

#544

Post by briHass »

glerk wrote: post #395
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?

How is this the government's fault, unless you want to talk about tighter regulations? From a libertarian perspective, you deposit money at a bank, they make you sign documents about the well-known FDIC insurance limits (a bonus insurance offered by the government), and you make the free choice to mitigate whatever risks you think you have based on that 250K vs whatever you plan to deposit.

It's essentially a business choosing to underinsure themselves.

Re: Urgent: Sign the petition now

#545

Post by rumdonut »

jlmorton wrote: post #160
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.

Sorry, I'm not sure if you're confused, but these are simple bank accounts. There was no high interest yield. The average interest yield was a fraction of a percent. No one was chasing any yield. No one was taking any risks. It's a bank account. Are you suggesting tens of thousands of small business customers need to do due dilligence on the investment practices of their banks? And what about all the other regional b…

> Are you suggesting tens of thousands of small business customers need to do due dilligence on the investment practices of their banks?

Honestly yes. All it takes is one financial analyst's time. I do it with my retirement plan for example, and I'm only a "small business" of one family. If there was demand for such info, I'm sure there would be a small community/industry for evaluating bank books like there is for financial planners (if that might not even be something a financial planner could already do).

And particularly with Y Combinator advising so many companies, I think it's on the side of negligence that they didn't evaluate the bank they were steering their companies towards. They were steering them there because they knew that tended to be the only bank that would deal with their high-risk companies - and it's too hard to believe that professional VCs didn't recognize that such a bank could have a lot of risk in some dark corner to compensate.

Re: Urgent: Sign the petition now

#546

Post by snickerbockers »

mberning wrote: post #503
snickerbockers wrote: post #481

Earlier quoted context omitted.

>Edit: I fully expect the YC sycophants to flag this story to hell and get it off the front page, and the censors here will come along with their canned finger wagging and admonishments of anybody taking them to task. i have news for you lol.

It took all of 10 minutes lol

If YC thinks this comment section is bad, they're really going to LOVE congress.

Re: Urgent: Sign the petition now

#547

Post by xupybd »

axlee wrote: post #523
nuclearnice3 wrote: post #445

Earlier quoted context omitted.

> 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.

I don't even understand why he would even make that comment in good faith in the first place. They are not asking for risks to be socialized, but they are asking for their "deposits" to be safe and the depositors to be "whole". Well, sounds like a lot like socializing the losses, unless there is a magical way to make the depositors whole without burdening the taxpayer.

There is a risk in using a bank. The risk should be low and it's normal to assume your money is safe in the bank. This incident proves it's not. The tax payer didn't take on this risk so why should they have to cover the losses?

Re: Urgent: Sign the petition now

#548

Post by Ekaros »

popol12 wrote: post #537
Ekaros wrote: post #364

Earlier quoted context omitted.

Chose to exceed that and also not diversify at the same time. In my mind they have only themselves to blame. They could have gotten one or two more accounts if they are legitimate businesses.

What if you have 3 billions to deposit, like Circle ? Open 1200 accounts in 1200 different banks ?

If you have 3 billion deposits, why not have let's say 3 different accounts with billion each? They don't cost that much money. And then even if one bank has system failure preventing transactions, you could have two others working. Or even some reasonable amount like one with each top 10 in users. With some amount of money in each allowing customers even better interaction.

Re: Urgent: Sign the petition now

#549

Post by IncRnd »

AlchemistCamp wrote: post #478
IncRnd wrote: post #468

Earlier quoted context omitted.

In the same way, surely you don't expect taxpayers to agree with what SVB's account holders want, just because they are on this site!

FWIW, I am a taxpayer and am not a SVB bank account holder. I don’t want to see this spin out of control on Monday when all those companies can’t make payroll and even more carnage ensues. This could blow up into a much much bigger panic contagion.

Thank you I do understand that.

Maybe, just maybe, instead of us collectively trying to manage the latest collapse, perhaps we could impose actual requirements (not regulations) on banks. There have been 562 bank collapses since 2001. I doubt that many people who work outside of finance would think the balance sheets of those banks look like anything like what people would expect in a stable "bank".

It's insane that very few banks in the country can reasonably withstand bank runs. The reason? They have no money on hand, because they are gambling. Sure, the ecosystem would change, but that's not a bad thing.

Re: Urgent: Sign the petition now

#550

Post by muzz »

popol12 wrote: post #537
Ekaros wrote: post #364

Earlier quoted context omitted.

Chose to exceed that and also not diversify at the same time. In my mind they have only themselves to blame. They could have gotten one or two more accounts if they are legitimate businesses.

What if you have 3 billions to deposit, like Circle ? Open 1200 accounts in 1200 different banks ?

Is your goal to eliminate risk, or to mitigate it?

If they had deposited that 3B in, say two banks rather than one, they'd have 1.5B in that other bank

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