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Urgent: Sign the petition now

ycombinator.com

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Re: Urgent: Sign the petition now

#771

Post by gigitrix »

PragmaticPulp wrote: post #280
jimrandomh wrote: post #37

Statement by the FDIC: https://www.fdic.gov/news/press-releases/2023/pr23016.html Key paragraph: > "All insured depositors will have full access to their insured deposits no later than Monday morning, March 13, 2023. The FDIC will pay uninsured depositors an advance dividend within the next week. Uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds. As the FDI…

The FDIC’s statement, which is very short and to the point, should be required reading for anyone wanting to discuss the situation. The FDIC’s handling of the situation appears to be geared toward urgency and keeping depositors up and running. The advance dividend provides significant access to funds beyond the $250K limit. The number of comments, Tweets, and even opinion pieces I’m reading from people who assume tha…

They are doing exactly what they should be doing to minimise impact while letting markets be markets, VCs are just too busy making a big mess in their underpants and screaming about why they should be special-cased to read the details

Re: Urgent: Sign the petition now

#773

Post by gigitrix »

pm90 wrote: post #422
PragmaticPulp wrote: post #280

Earlier quoted context omitted.

The FDIC’s statement, which is very short and to the point, should be required reading for anyone wanting to discuss the situation. The FDIC’s handling of the situation appears to be geared toward urgency and keeping depositors up and running. The advance dividend provides significant access to funds beyond the $250K limit. The number of comments, Tweets, and even opinion pieces I’m reading from people who assume tha…

There is no certainty over the amount of dividend the FDIC will pay out. IMO this weekend is a critical time: if the FDIC/Government act quickly and provide hard numbers, it will both stabilize the depositors and prevent panic from rippling through the ecosystem. I feel like the urgency and fear mongering is quite justified considering the tiny window of opportunity present to avoid irreversible catastrophic damage t…

Urgency should be directed at the process which is providing that advance and rightly demanding the amount to sufficient and the release quick for the reasons you specify. Instead they are off on their own demanding bailouts and rejecting even the systems set up to protect them in this scenario, demanding special cases and further alienating this entire industry in the eyes of the public. It's beyond embarrassing to watch.

Re: Urgent: Sign the petition now

#774

Post by bigbillheck »

garry wrote: post #112
toomuchtodo wrote: post #29

Where was YC when SVB lobbied against stronger regulation so they could take more risk? Crickets. Edit: Sources in my other comment https://news.ycombinator.com/item?id=35114110

We are advocating better regulation to prevent this from happening in the future. It's in the petition.

What am I supposed to believe, your words or your actions?

Re: Urgent: Sign the petition now

#777

Post by nuclearnice3 »

benmccann wrote: post #662
rahimnathwani wrote: post #185

Earlier quoted context omitted.

The possibility of changing the rules of the game once it's started can create moral hazard. For example, if people believe that the govt will use taxpayers' money to reimburse funds that were not FDIC protected, then they won't be careful about picking their bank. And it's a lot of money (e.g. 30% loss on $200bn is about $600 per US resident household). But I'm conflicted, because: - the federal administration doesn…

> And it's a lot of money (e.g. 30% loss on $200bn is about $600 per US resident household). I'm not sure where you got this number, but it's different than what I've seen. Yes, SVB had $200B in deposits, but it had $15B in unrealized losses. The FDIC is probably contributing $12B as roughly 6% of deposits were insured. That means the gap is probably $3B if the government is to step in, which is very different than t…

Does the FDIC work like that?

I imagined they would sell assets for the insured. And then sell more for the uninsured. If that process didn't cover the insured, they would bring money.

In this case, the insured are well covered by the assets, so the FDIC won't bring money.

We have a $12B difference of opinion here. Although, more generally, I agree from initial reports the assets - deposits gap does not seem to reach 30%. We should know more tonight and Monday morning.

Re: Urgent: Sign the petition now

#778

Post by AlchemistCamp »

lapcat wrote: post #766
AlchemistCamp wrote: post #744

Earlier quoted context omitted.

In the case of the depositors, they put their own money into an account and want to be able to spend that money to pay their employees. It might easily cost the government even more in lost tax revenue if the thousands of companies cannot make payroll due to a banking failure, thus forcing them out of business and their employees out of their jobs. In the case of students, they borrowed money that was not theirs, spe…

> In the case of the depositors, they put their own money into an account and want to be able to spend that money to pay their employees. Their own money. Well... aren't these mainly venture capital based startups? It's not actually the money of the startups but rather the money of the VC funds. So the situation is more similar to student loans than you portray it. In fact, the ideas behind VC startups and student lo…

> Well... aren't these mainly venture capital based startups? It's not actually the money of the startups but rather the money of the VC funds.

No. They literally sold pieces of their businesses for that money.

The equivalent for students would be if instead of borrowing the money, they signed over a percentage of all future earnings for the rest of their lives.

Re: Urgent: Sign the petition now

#779

Post by medvezhenok »

beezle wrote: post #692
lolinder wrote: post #308

Earlier quoted context omitted.

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

You can find similar rates from some other banks today. It is not so hard to do when 1mo treasury bills are yielding 4.80 and 3m over 5.0%

It's about 1% higher than most solid/large high-yield online banks right now (Capital One 360 at 3.4%, Discover Savings is at 3.5%, Ally Bank is at 3.6%).

So I wouldn't say that you could get 4.5% from a reputable bank at the moment.

Re: Urgent: Sign the petition now

#780

Post by ZachPruckowski »

jimnotgym wrote: post #767
xupybd wrote: post #547

Earlier quoted context omitted.

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?

Indeed I have read countless times on hn that it would be very risky to keep more than the insured amount in a bank. Sounds like YC should invest more in mentoring their portfolio companies to manage their treasury correctly.

Well and it's not just that they had money over the insured amount in a bank. It's that they had ALL of their money in ONE bank. If they had $500K in three different banks instead of $1.5M in one bank, there would still be a risk, but it would be that they'd lose $250K if any of those three banks failed, not that they'd lose $1.25M if one particular bank failed.

(And obviously actual losses are gonna be like 20% here, not 100%, but you get the picture).

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