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Urgent: Sign the petition now

ycombinator.com

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Re: Urgent: Sign the petition now

#721

Post by blep_ »

JohnFen wrote: post #668
dehrmann wrote: post #524

Earlier quoted context omitted.

When you join a startup, you don't really think about their traditional bank failing as a risk factor. It's a step away from "what if the office collapses in an earthquake" or some other p9999 off-chance risk.

When you join a startup, you are thinking that there's a good chance the startup will fail. The exact mechanism isn't in your thoughts, because it doesn't really matter.

Usually you get somewhat more warning than this, though.

I'm an employee of one of these companies and I joined with the knowledge that it might fail, but with plans to bail quickly if it looked like it was heading that direction. Given the current size of the company I joined, I expected that to be on the scale of weeks to months, not two days.

(I do have the funds to deal with some amount of payroll fuckery, and don't plan to immediately do anything unless this gets much worse next week.)

Re: Urgent: Sign the petition now

#722

Post by givemeethekeys »

oldgradstudent wrote: post #406
tikkun wrote: post #157

Earlier quoted context omitted.

Disagree. People who invested in SVB should be wiped out, probably. People who deposited in SVB should not be wiped out. Depositors in banks aren't expected to do due diligence on the financial statements of the bank they're depositing in. Have you read the 10-K filings of your bank in detail?

> Depositors in banks aren't expected to do due diligence on the financial statements of the bank they're depositing in. Have you read the 10-K filings of your bank in detail? If you have less than the insured amount you are not expected to do anything. If you have significantly more than the insured amount you should do your homework and manage your risk. Anyone who was alive during the 2008 crisis should be aware o…

I know a few small business-people. They have more than 250k cash but not in the millions. They definitely spread their cash in several bank accounts. But then, they are not tech people.

Re: Urgent: Sign the petition now

#723

Post by polynox »

PaulHoule wrote: post #375
simonw wrote: post #207

Earlier quoted context omitted.

If a startup can't pay their employees at the end of the month, it's apocalyptic no matter whether or not they get access to their money again at some future date.

The FDIC should have payments working very close to normal early next week if not by Monday. People might be getting paid a few days late and whoever is processing payments will be working overtime but there's a good chance it will be "no big deal" for most employees. Often when a bank fails they change the sign at the branch to some other name otherwise you wouldn't know what happened. In the 1980s there was a lot o…

I'm not sure what your argument is exactly. They haven't transferred the depositors' balances to new banks, they've simply issued them IOUs (receivership certificates). From what is known about the balance sheet of SVB, it will probably be between 8 and 10 years before those IOUs are replaced with dollars. You can't pay employees, the FTB or the IRS in receivership certificates. To say that it will be "no big deal" and that there will be a "minimum amount of disruption" is simply an assertion based on no evidence.

Re: Urgent: Sign the petition now

#724

Post by muzz »

tikkun wrote: post #157
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.

Disagree. People who invested in SVB should be wiped out, probably. People who deposited in SVB should not be wiped out. Depositors in banks aren't expected to do due diligence on the financial statements of the bank they're depositing in. Have you read the 10-K filings of your bank in detail?

Depositors are not at risk of being wiped out. The first 250k is insured and it looks like they will get back a lot of the uninsured portion

Re: Urgent: Sign the petition now

#725

Post by muzz »

geodel wrote: post #663
downvotetruth wrote: post #581

Earlier quoted context omitted.

I'm not going to pay to insure a millionaire. Insurance is not free.

With the way things are going, don't be surprised if some silicon valley innovator come with insurance product that can be purchased after the fact . With marketing like "Come, Disrupt the Insurance Industry" it might just work out fine

The first sentence is basically what Tan is proposing

Re: Urgent: Sign the petition now

#726

Post by _9hey »

somsak2 wrote: post #603
_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?

MSBs fund Wall Street to compete with families for houses. Phoenix is a good case study.

Re: Urgent: Sign the petition now

#727

Post by dlubarov »

lolinder wrote: post #411
Mystery-Machine wrote: post #384

Earlier quoted context omitted.

$250k is nothing for a company. It's 1 engineer salary. And, no, it's not $1k. It's more like $10k-$20k per month, plus all the overhead of having your money in multiple bank accounts and shuffling it all around just to never hit the $250k limit. Just my 2 cents on this strawman part of discussion.

My parent wasn't talking about shuffling money around, they were talking about reading the bank's balance sheet. $1k gets you several hours of an accountant's time to go through the bank's balance sheet and tell you if their interest rates and other perks are, in fact, too good to be true. If you want to go the extra mile and try to move money around to keep under the limits, more power to you, but paying someone to…

How could my accountant have known the risks? I don't think there was any public information about SVB's poorly-timed MBS purchases, the main cause of this incident.

Re: Urgent: Sign the petition now

#728

Post by oarabbus_ »

dlubarov wrote: post #716
oarabbus_ wrote: post #652

Earlier quoted context omitted.

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

They did already have 77% of the collateral in short-term T-bills, and the 23% in cash was spread out across multiple banks. They held $3.3bn at SVB, but that's out of $42bn total.

So then it sounds like they probably had 10-15 banks (entirely reasonable for them to be expected to open this many accounts at unique banks, given their business model) which is a far cry from the 1200 OP complained about.

If your entire business model revolves around moving multiple billions of dollars via an asset-backed stablecoin model, it's reasonable to expect you to have dozens of bank accounts, in at least 3 time zones, and likely more.

I don't know why people (not saying you specifically) seem to have this expectation any entity should be able to deposit billions of dollars risk-free at a single institution.

Ironically it's often the same people who can intuitively grasp why to hold your crypto across multiple wallets, who cannot fathom that infinite $ cannot be deposited at a single bank, without risk.

If you're leaving 7 to 9+ figures in a single account, then either buy custom insurance, or only do business with banks which offer excess insurance.

Re: Urgent: Sign the petition now

#729

Post by j_crick »

anigbrowl wrote: post #567
j_crick wrote: post #516

Earlier quoted context omitted.

Question from a foreigner: if this bank is so important for your ecosystem, why don’t y’all interested parties chip into some fund or something and buy it out yourself?

I am also wondering this. The capital definitely exists to do it. Perhaps it is even being asked for, but out of public view.

A benevolent take: yes, perhaps that’s happening.

A non-benevolent take: why would you do that with your own money if you can make it happen at the expense of somebody else?

Re: Urgent: Sign the petition now

#730

Post by huijzer »

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.

Sounds also as a great opportunity for the, so called, "angel investors" to show that they are.
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