These SVB threads really highlight how uninformed the SVB readership is lately. If you don't understand tech and finance why are you here?
Because they heard about HN from 4chan's /g/ board. You can spot the language they use from a mile away.
Yellen says government will help SVB depositors but rules out bailout
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Re: Yellen says government will help SVB depositors but rules out bailout
#152I see a lot of unexpected saltiness and clear misconceptions in any thread about SVB. “Depositors shouldn’t get anything beyond the insured $250,000”. Then what do we do with the billions in remaining assets? Appropriate them, and leave small and mid businesses hanged to dry? “This is a bailout”. It would be if shareholders were to get their money back, which doesn’t seem likely. The government will use the bank asse…
>The government will use the bank assets to make customers, not owners, whole.
The reason SVB is in receivership is because they don't actually have the ability to make all their depositors whole. Any scenario where uninsured depositors end up with all their money back is likely to be a bailout.
Re: Yellen says government will help SVB depositors but rules out bailout
#153I see a lot of unexpected saltiness and clear misconceptions in any thread about SVB. “Depositors shouldn’t get anything beyond the insured $250,000”. Then what do we do with the billions in remaining assets? Appropriate them, and leave small and mid businesses hanged to dry? “This is a bailout”. It would be if shareholders were to get their money back, which doesn’t seem likely. The government will use the bank asse…
> Then what do we do with the billions in remaining assets? Appropriate them, and leave small and mid businesses hanged to dry?
Easy, pay out $250K per account, then distribute the rest pro rata based upon closing balance from when the fed's took over. If they have to wait because assets need to be liquidated then sucks to be them. I'm sure they can get their money faster if they agree to a haircut.
> “This is a bailout”. It would be if shareholders were to get their money back, which doesn’t seem likely. The government will use the bank assets to make customers, not owners, whole.
Money to depositors for amounts greater than $250K is a bail out. They have no right to that money from the Feds.
> Generic screeching against the tech world. I get the schaudenfreude, but this will not hurt big tech and VCs as much as tens of thousands of small businesses, and the people employed at them. Some billionaires will be upset at some relatively insignificant losses, while hundreds of thousands may lose their jobs.
On the flip side, there's nothing special about many of the customers being small businesses, or startups, or big businesses, or really anything else. There's established rules for FDIC insurance and that's what we should be following.
Re: Yellen says government will help SVB depositors but rules out bailout
#154This 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…
> to make them whole.
The quote in the rather short article is:
> “But we are concerned about depositors, and we’re focused on trying to meet their needs.”
I don't think "trying to meet their needs" is the same as ensuring they will "be made whole".
The biggest issues around people with uninsured accounts (the vast majority) is both how much and how long. This will be a mess if either the amount is significantly less than "whole" or if the time to be made whole takes months not days.
Re: Yellen says government will help SVB depositors but rules out bailout
#155[deleted]
Re: Yellen says government will help SVB depositors but rules out bailout
#156I see a lot of unexpected saltiness and clear misconceptions in any thread about SVB. “Depositors shouldn’t get anything beyond the insured $250,000”. Then what do we do with the billions in remaining assets? Appropriate them, and leave small and mid businesses hanged to dry? “This is a bailout”. It would be if shareholders were to get their money back, which doesn’t seem likely. The government will use the bank asse…
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Re: Yellen says government will help SVB depositors but rules out bailout
#157These SVB threads really highlight how uninformed the SVB readership is lately. If you don't understand tech and finance why are you here?
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Re: Yellen says government will help SVB depositors but rules out bailout
#158Earlier quoted context omitted.
While I have no love for what has become "big tech", this really has nothing to do with their indiscretion or bad behaviour. SVB was a financial institution outside of that sector which catered to that class of customer and regrettably took on risks that made them exceptionally vulnerable to interest rate increases. Add that with their clients mostly having uninsured deposits and belonging to one industry, and we're…
They also lobbied to become more vulnerable. Greg Becker the CEO worked to get regulations removed that helped them get in this position by removing public liquidity stress test reports and reduce the frequency of liquidity stress tests.
That's fine, punish the bank and change the regulations. Depositors had nothing to do with that.
Re: Yellen says government will help SVB depositors but rules out bailout
#159I see a lot of unexpected saltiness and clear misconceptions in any thread about SVB. “Depositors shouldn’t get anything beyond the insured $250,000”. Then what do we do with the billions in remaining assets? Appropriate them, and leave small and mid businesses hanged to dry? “This is a bailout”. It would be if shareholders were to get their money back, which doesn’t seem likely. The government will use the bank asse…
It's coherent to think the FDIC shouldn't put in more than $250,000 per insured account and also that if funds in excess of that are available without FDIC participation that they should all go to depositors.
People implying other things probably don't really understand how banks work.
Re: Yellen says government will help SVB depositors but rules out bailout
#160Good. Investors like Ackman and Cuban seem so concerned about payroll for tech workers. The truth is that the vast majority of this cash was dry powder for acquisitions, staying liquid for new new investments, fresh VC money for advertising. Isn’t it these same folks who remind us all the time that most startups fail? Why bail out an entire bank when 99% of its startup depositors wouldn’t have made it anyway? If anyt…
I guess that’s true if you are a Roku or a Roblox, but how can you say that about sub-50 person company still trying to find its footing?