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Urgent: Sign the petition now

ycombinator.com

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Re: Urgent: Sign the petition now

#611

Post by somsak2 »

skwirl wrote: post #290

People are misdirecting their (rightful) ire over 2008 bank bailouts at depositors , which apparently is because they don't like some of those depositors for unrelated reasons. Nobody is defending the bank, which already has been shut down and its shareholders rightfully wiped out. The idea that backstopping depositors is moral hazard is preposterous and honestly embarrassing on a platform where people should know be…

You can both hold the opinion that we should actually bail the depositors out but also regard the fact that they exhibited a serious lack of due diligence at the same time. They are not mutually exclusive. I think you're assuming that simply because people are critical of the lack of risk controls at these companies, they also necessarily mean to say that they all deserve to be wiped out.

Re: Urgent: Sign the petition now

#612

Post by falcolas »

gnicholas wrote: post #578
falcolas wrote: post #554

Earlier quoted context omitted.

I flagged the submission, as it was titled “Urgent: Sign This Petition Now”. And fuck that, if I’m being blunt.

It appears the title was changed from the original submission: https://news.ycombinator.com/item?id=35114101 I agree the current title is not appropriate.

Yeah, I’ve seen that from a few posts too, it’s why I felt it valuable to point out.

Re: Urgent: Sign the petition now

#613

Post by kelnos »

cscurmudgeon wrote: post #238
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.

Right there in the article. I guess not reading obvious text bolded is the hip new thing to do: > Small business depositors at Silicon Valley Bank should be made whole. Regulators need to conduct a backstop of depositors. We are not asking for a bank bailout. > Not interested in taking another spin on the “privatize gain, socialize loss” merry-go-round Where are they asking for that? Edit: And of course, downvoted. L…

The two assertions, "depositors should be made whole", and "we are not asking for a bank bailout" are a bit... misleading? No, they are technically not asking for a bank bailout, but they are asking for a bailout.

Re: Urgent: Sign the petition now

#614

Post by aaomidi »

scarface74 wrote: post #383
briHass wrote: post #223

Earlier quoted context omitted.

Just to clarify, these depositors specifically exceeded the FDIC deposit insurance limit (250K), right? That isn't a new or unknown rule; either through ignorance or calculated risk, those depositors that exceeded the limit took a chance. I don't disagree that something should be done in the future to prevent this, but when you gamble, sometime you lose.

Were they gambling by putting their money in an FDIC insured bank? How do you even run a payroll system if your money is spread out between a dozen banks?

You use the various services that exist to do this? Or you just have enough money in your payroll source account?

Re: Urgent: Sign the petition now

#615

Post by [deleted] »

garry wrote: post #90
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.

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.

[deleted]

Re: Urgent: Sign the petition now

#616

Post by somsak2 »

jmull wrote: post #433

Most startups fail. Propping these companies up now with government money (that is, our money) will just make the failures cost more, ultimately. What we're really talking about here is bailing out investors who, of course, knowingly took these high risk flyers. (BTW, the rising interest rates affects everything about this kind of investment. All kinds of things that made sense in the era of free money are going to s…

I really doubt that when these startups put money into a bank account they were "knowingly taking a high risk."

Re: Urgent: Sign the petition now

#617

Post by b1c1jones »

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…

You are asking for corporate welfare.

Re: Urgent: Sign the petition now

#618

Post by IncRnd »

DennisP wrote: post #400
mindcrime wrote: post #213

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? 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?

That's very odd, the entire first page was full of hits for me. What were you searching?

Take a look at https://www.forbes.com/advisor/banking/ways-to-insure-excess.... It explains several methods, including extra deposit insurance from CDARS, MaxSafe, Depositors Insurance Fund, etc. It also explains cash management accounts, credit union overflow, using multiple banks, and so forth. I can't help but think a good CFO or comptroller would be well aware of these.

Re: Urgent: Sign the petition now

#619

Post by WirelessGigabit »

Bullshit. There are no small businesses here. It's all VC funded. Let them fail. This way hopefully VC slows down. It's insane the amount of money that gets pumped into these disruptors. I don't need another subscription service for something that was not one for 100 years.

Also, it's on them if they only used 1 bank, and worse, it's a bank whose clients are all the same as you. So if there is an industry wide event, you ALL are hosed.

Guess those algorithms they've been building to push me 'relevant' information didn't push the 'diversify' notification to their CEOs.

Let them burn.

Re: Urgent: Sign the petition now

#620

Post by muzz »

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

Funny how this not mentioned in the petition or any of the posts
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