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Urgent: Sign the petition now

ycombinator.com

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Re: Urgent: Sign the petition now

#601

Post by somsak2 »

dehrmann wrote: post #540
nosefrog wrote: post #230

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

I have no idea why this idea is suddenly so unpopular. People see putting money in banks as a de-facto safe decision. $250k might be a reasonable cutoff for individuals, but it's clearly way too low for businesses. If that threshold had been more like $10M, SVB might have even survived since depositors would have had faith they could access enough of their funds within a day of a bank failure. Instead, there was a ba…

Is it suddenly so unpopular? Can you link me to think pieces / opinions that have been published in the last few years that are arguing for increased deposit insurance for businesses? I don't recall hearing about this ever before.

If you wanted such a high cap, you'd need to increase the deposit insurance premiums much further to cover for it. The banks were already unhappy about the most recent 2 basis point increase earlier this year -- https://www.fdic.gov/news/financial-institution-letters/2022...

Re: Urgent: Sign the petition now

#602

Post by sircastor »

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…

> Maybe these CEOs and VCs can fund payroll for a few pay periods.

Don’t they already? Isn’t that where payroll is coming from? I would guess for the first two years (at least) half of startups are paying out of investors’ funding instead of revenue.

Re: Urgent: Sign the petition now

#603

Post by somsak2 »

_9hey wrote: post #65

Should have started with “ We are not asking for a bank bailout. ” Edit: my opinion reversed. I actually with the replies here. It is effectively what YC is asking for. It’s a matter of choosing who suffers: investors or private home buyers? Because Mortgage Backed Securities have been screwing individual home buyers for years.

What? How have MBSs been screwing individual home buyers?

Re: Urgent: Sign the petition now

#604

Post by isignal »

scarface74 wrote: post #514
professoretc wrote: post #450

Earlier quoted context omitted.

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.

My risk threshold for cash is $0. So yeah, it would be split across however many banks. Of course I don’t have all my positions in cash and I take into account the necessary risk/reward equation into account. But then again, I would never work for a non public company where part of my compensation comes from “equity” and I sell/diversify all my after tax RSUs within 6 months after that vest. So I’m very risk averse a…

You can just buy short term us treasuries instead of trying to spread out 250k everywhere.

Re: Urgent: Sign the petition now

#606

Post by aaomidi »

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…

Why do you have that assumption? What gave you that assumption?

In which law does the US say that your deposits are safe? You get insurance up to 250K. That’s it.

Why didn’t you mitigate risk by using a few banks? Even 4 would’ve meant only a 25% loss.

Re: Urgent: Sign the petition now

#608

Post by isignal »

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 ?

Just buy us treasuries. There is no rule that you have to have cash at a bank.

Re: Urgent: Sign the petition now

#609

Post by kelnos »

scarface74 wrote: post #286
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’m torn. When I put my money in the bank, I don’t consider that an “investment” and neither did the employees. I’m the last person to feel sorry for BigTech employees (I am one) making $300K+ a year (I don’t. I’m not complaining) who got laid off and didn’t save during the good times (I have used almost every penny of my after tax signing bonus/RSUs toward “increasing my net worth”). But most of the people working a…

> When I put my money in the bank, I don’t consider that an “investment” and neither did the employees.

No, but you should be aware that if you put money into a deposit account, and the bank fails, you are only guaranteed (by the FDIC) to get $250k of that money back. This is usually not a problem, as most individuals don't have that much cash, period, let alone in a single bank account.

But it's a problem for businesses, obviously. And yes:

> Could the CFOs at these companies known they were making risky bets

Absolutely! Putting more than the FDIC-insured max into a deposit account is an obvious risk that any CFO (or corporate finance person in general) will absolutely know about.

Re: Urgent: Sign the petition now

#610

Post by aaomidi »

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 ?

Open 4 banks and you’ll lose at most 25%?

Use treasures bills if you’re that concerned.

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