Yellen says government will help SVB depositors but rules out bailout • Hacker News Board

Re: Yellen says government will help SVB depositors but rules out bailout

#51

Post by chipgap98 » Sun, Mar 12, 2023, 2:04 PM UTC

sithlord wrote: post #19

NotACop182 wrote: post #13

Earlier quoted context omitted.

Did they help depositors that lost money in the last 500+ bank collapses? Why do they get special treatment? The government has laws and rules the depositors are insured up to 250k. Either they liquidate and everyone takes a hair cut. Or they wait till the bonds mature and can pay them out. But the government should not relieve anyone past what is legally available.

My guess ( I havn't looked at is the last ones ) is that the majority of deposits were well under 250k, and that hundreds of thousands of jobs weren't on the line. Also, you are talking about a major banking collapse if people start thinking that their deposits aren't safe. (a lot of people will start pulling money, even if under 250k). There are so many irrational people out there... edit: I guess somewhere in what…

> is that the majority of deposits were well under 250k

What gives you that indication? The bank specialized in working with startups, most of whom have more than $250k in the bank

Re: Yellen says government will help SVB depositors but rules out bailout

#52

Post by chiefalchemist » Sun, Mar 12, 2023, 2:05 PM UTC

sithlord wrote: post #7

This actually makes a ton of sense, lets not forget that a bailout in this term is really pointing towards saving the bank itself, and its shareholders. There is inherent risk in equity investments, and it likely should have to suffer for its poor decisions. But when it comes to depositors, I think it makes a lot of sense to make them whole, especially in the case of SVB where the bank likely has pretty close to enou…

Makes sense? Why??

Why in 2023 after other similar events is this special?

Accounts are insured to the specifed limit. That applies to all of us. Full stop.

What (read: who) makes this a special case in need of special treatment?

Re: Yellen says government will help SVB depositors but rules out bailout

#53

Post by [deleted] » Sun, Mar 12, 2023, 2:05 PM UTC

sithlord wrote: post #7

This actually makes a ton of sense, lets not forget that a bailout in this term is really pointing towards saving the bank itself, and its shareholders. There is inherent risk in equity investments, and it likely should have to suffer for its poor decisions. But when it comes to depositors, I think it makes a lot of sense to make them whole, especially in the case of SVB where the bank likely has pretty close to enou…

[deleted]

Re: Yellen says government will help SVB depositors but rules out bailout

#54

Post by remote_phone » Sun, Mar 12, 2023, 2:05 PM UTC

The truth is VCs are terrified their investments in their startups are going to go to 0. That’s why the biggest most vocal people are VCs talking about this. So they are framing the “we need to make depositors whole” as if they care about small business when really they are just talking their own book.

The real solution is that VCs should give a loan to all their startups so that they can make payroll. Isn’t that their value-add? They should be the backstop for their investments. But instead they want the government to step in.

It’s another example of “socialize the losses but privatize the gains.”

Re: Yellen says government will help SVB depositors but rules out bailout

#55

Post by mynameishere » Sun, Mar 12, 2023, 2:05 PM UTC

bastian wrote: post #9

Lionga wrote: post #5

[flagged]

I am not sure why you are so bitter but it’s important do understand that all you do is create more hate with comments like this. The only thing anyone is asking for is to protect the deposits of the people who bank(ed) with SVB. That is it.

When a person doesn't want himself and every other ordinary person to be robbed by millionaires and billionaires, that is not "hate". That is not what "hate" is.

Re: Yellen says government will help SVB depositors but rules out bailout

#56

Post by morelisp » Sun, Mar 12, 2023, 2:05 PM UTC

_8j50 wrote: post #46

chewz wrote: post #16

Earlier quoted context omitted.

Op is not bitter but realistic... Deposits are insured up to 250 thousand. Above they do incur risk..

Both you, op and others are being ignorant on this. Insurance payment or bailout is external money, this is making depositors whole using the bank's assets, not FDIC or government money. Tax payers are not making anyone whole as I understand yellen's proposal.

But this is literally what was going to happen as soon as the FDIC moved in. If that's all they want, why all the extra noise?

Re: Yellen says government will help SVB depositors but rules out bailout

#57

Post by [deleted] » Sun, Mar 12, 2023, 2:05 PM UTC

rvz wrote: post #17

Some people just want to see the (tech) world and the VC pyramid scheme collapse. This time, Silicon Valley has to help itself with this mess it created. Some startups like Circle with large backers will survive, but others on the other hand need more than a miracle or a hero. I would not want to see the chaos underneath in bookface right now and certainly the collapse with in less than 24 hours.

[deleted]

Re: Yellen says government will help SVB depositors but rules out bailout

#58

Post by QuantumSeed » Sun, Mar 12, 2023, 2:05 PM UTC

sithlord wrote: post #19

NotACop182 wrote: post #13

Earlier quoted context omitted.

Did they help depositors that lost money in the last 500+ bank collapses? Why do they get special treatment? The government has laws and rules the depositors are insured up to 250k. Either they liquidate and everyone takes a hair cut. Or they wait till the bonds mature and can pay them out. But the government should not relieve anyone past what is legally available.

My guess ( I havn't looked at is the last ones ) is that the majority of deposits were well under 250k, and that hundreds of thousands of jobs weren't on the line. Also, you are talking about a major banking collapse if people start thinking that their deposits aren't safe. (a lot of people will start pulling money, even if under 250k). There are so many irrational people out there... edit: I guess somewhere in what…

S&P Global Market Intelligence reports that as of Dec 31, 2022, 97% of Silicon Valley Bank's deposit accounts exceeded the $250,000 insurance cap.

Re: Yellen says government will help SVB depositors but rules out bailout

#59

Post by koolba » Sun, Mar 12, 2023, 2:06 PM UTC

sithlord wrote: post #7

This actually makes a ton of sense, lets not forget that a bailout in this term is really pointing towards saving the bank itself, and its shareholders. There is inherent risk in equity investments, and it likely should have to suffer for its poor decisions. But when it comes to depositors, I think it makes a lot of sense to make them whole, especially in the case of SVB where the bank likely has pretty close to enou…

> But when it comes to depositors, I think it makes a lot of sense to make them whole, especially in the case of SVB where the bank likely has pretty close to enough assets to cover the liabilities (deposits), but its tied up in such long term investments that it could take a long time to get it out.

If anybody gets an extra penny more than $250K from the Feds than that is by definition a bailout.

> But moreso, when we invest in companies, we deep down know there is a possibility of the investment going to 0. We often don't think when I put money in a bank it can go belly up, this would obviously hurt the trust in our banking environment if depositors not made whole.

FDIC insurance is not infinite. Not understanding that is no fault of the rest of society.

And who knows what perks, direct or indirect, those depositors were getting for having that cash at SVB?

Whether it’s stupidity or greed doesn’t matter. No hand outs.

Re: Yellen says government will help SVB depositors but rules out bailout

#60

Post by belter » Sun, Mar 12, 2023, 2:06 PM UTC

The first step would be to stop calling them Depositors. They are not and were never Depositors. That is what you have deposit boxes for...You do not have money at the Bank. You loaned money to the Bank. That is why they pay you interest on it...