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Urgent: Sign the petition now

ycombinator.com

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Re: Urgent: Sign the petition now

#651

Post by skwirl »

corbulo wrote: post #147
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…

It'll get worse if they're bailed out! It would totally change the perception of risk if they'll be saved every time they shit the bed.

Oh no people might continue putting money in bank deposit accounts at banks regulators have said are solid, we definitely don't want people doing things so totally unnecessary and crazy.

Re: Urgent: Sign the petition now

#652

Post by oarabbus_ »

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 ?

Let's not act like Circle's options were either to put 3 billion in one bank, or open 1200 accounts at 1200 banks.

-Purchase high-limit cash insurance from a Reinsurer like Lloyds of London or Berkshire Hathaway up to their underwriting limit, perhaps $100M. Do this across 4-5 different banks with 4-5 different reinsurers.

-Put the remaining $2-2.5B into mixed US Treasuries of varying maturities

Re: Urgent: Sign the petition now

#656

Post by grugagag »

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…

I agree that depositors did nothing wrong here and that they took VC recommandation of using SVB. Can you also touch on why and who started this bank run in the first place and what they should have known better?

Re: Urgent: Sign the petition now

#657

Post by skwirl »

JohnFen wrote: post #637
skwirl wrote: post #123

Earlier quoted context omitted.

>No, you should insulate yourself from that risk, either by spreading out your cash between multiple institutions, or obtaining deposit insurance beyond the government's, or (most likely) both. Why would I do that when I can bank with a too-big-to-fail bank like JP Morgan Chase, Citibank, Wells Fargo, or Bank of America?

You're taking a risk with those banks if you exceed the insurance limits, too.

I'm not, because I know the federal regulators have strict requirements for these banks and will bail them out if they did somehow fail for being a "systemically important bank." I'm not qualified to evaluate the soundness of a bank, and neither are the rating agencies (as 2008 showed), so I'm going to go with the banks I know the federal government will backstop.

Re: Urgent: Sign the petition now

#658

Post by dmix »

axlee wrote: post #97
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.

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.

Funny how everyone loves this idea but it only ever hurts small companies. I don't think gov is the solution here and YC asking is a bad look but let's contextualized the "socialized losses" of American companies in 2008. It 100% benefited bigco and the consequence of "too big to fail" was policy that destroyed a hundred smaller banks and further reduced the banking market to 5 mega players.

Market corrections are normal, they need to happen otherwise we just end up with a tiny group of ololigopolies with a free reign from consequences. Bad actors need to be punished.

The only way this sort of hand ours from startups needs to be just like the reaction to 2008 should have been: not punishing small/medium companies for the actions of a $200B bank and their like. YC has a reputation of being wealthy VCs so it does nothing to help this point.

Re: Urgent: Sign the petition now

#659

Post by JohnFen »

breck wrote: post #419
garry wrote: post #358

Earlier quoted context omitted.

These are deposits at a bank. We're advocating for protection of 37,000 small business accounts, a small number of which are YC. We discovered about 30% of YC companies would not be able to make payroll even after the $250,000 insured amount if they were to wait months for their payments. That is detailed on the FDIC website currently as the process for remediation. This petition represents the lived experience of th…

You are in the top 1% and you are asking for a government bailout. Everyone knows that amounts over $250K were not insured. These are not "innocent depositors". A lot of my portfolio companies are affected, but I will not lobby for a government bailout on their behalf. It's not the right thing to do. I 100% agree with you on lobbying for an expedient process, but if these companies have to take a haircut, they have t…

> These are not "innocent depositors".

Let's be fair. They were innocent in the sense that the failure wasn't their fault.

What they aren't is naive. To the extent that they had deposits exceeding FDIC insurance, they were knowingly taking a risk.

Re: Urgent: Sign the petition now

#660

Post by JohnFen »

dehrmann wrote: post #507
breck wrote: post #419

Earlier quoted context omitted.

You are in the top 1% and you are asking for a government bailout. Everyone knows that amounts over $250K were not insured. These are not "innocent depositors". A lot of my portfolio companies are affected, but I will not lobby for a government bailout on their behalf. It's not the right thing to do. I 100% agree with you on lobbying for an expedient process, but if these companies have to take a haircut, they have t…

> Everyone knows that amounts over $250K were not insured. This is technically true, but I think there's a feeling that traditional banks are de-facto safe places to keep money. Depositors losing money in bank runs feels like a 19 20's problem.

> I think there's a feeling that traditional banks are de-facto safe places to keep money

Where were the financial advisors for these companies, then? A big part of their job is to strip away "feelings" and talk cold, hard facts.

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