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Urgent: Sign the petition now

ycombinator.com

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Re: Urgent: Sign the petition now

#791

Post by chernevik »

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…

The FDIC will pay off insured deposits from bank assets.

Those deposits get first call on the assets. The FDIC only chips in if those assets aren't enough.

Re: Urgent: Sign the petition now

#792

Post by UmYeahNo »

dehrmann wrote: post #493
UmYeahNo wrote: post #15

When we little guys put our eggs in one basket, or put excessive reliance in business we have no control of we get accused, sometimes implicitly, sometimes explicitly, of being incompetent. That we should've known better. Hmmm.... The cynic in me says this letter is less about bailing out the small companies trying to make payroll and more about the VC's not wanting to lose massive investments.

> The cynic in me says this letter is less about bailing out the small companies trying to make payroll and more about the VC's not wanting to lose massive investments. It's both. VCs don't want to lose their cash accounts and see their investments become insolvent. At the same time, it doesn't help society if all these workers suddenly find themselves jobless. There's also a risk of contagion. If companies suddenly…

Well, if I'm going to remain cyncical I'd hazard a guess that many of these startups are to "disrupt" some industry anyway -- automating the previously unautomate-able, putting huge swaths of people out of a job (often with no clear path to a new career) So, if those jobs are preserved a few days / weeks / months longer, I guess it all works out.

There are potentially millions of workers under a great deal of pressure to not lose their jobs to some disruptor or another. Are we somehow less sympathetic to them than these tech workers?

Re: Urgent: Sign the petition now

#793

Post by theGnuMe »

smcl wrote: post #538
theGnuMe wrote: post #521

Earlier quoted context omitted.

Hey man, they own the place so it is their rules. Do you think the speech is free here? Newspeak only.

Right but the link itself isn’t critical of HN or anything, just some of the comments turned out not to be super on board with the petition.

My speech gets rate limited under the guise of "posting too fast" here from time to time. For YC that and flagging are a feature being used to control the narrative and as a user it sucks because you can't in general have a conversation about anything remotely confrontational. Same thing happens at Twitter despite the new boss. Rules more thee but not for me.

So I agree with you in general. But in my opinion YC doesn't want the petition on the front page probably because they don't want to have to explain the comments to Congress or the press. Imagine asking for a bailout and having the comments here read out loud in a hearing. It's just not a good look. But you know what else isn't a good look? That this post was flagged, edited and restricted.

Re: Urgent: Sign the petition now

#794

Post by chernevik »

berniedurfee wrote: post #788
garry wrote: post #144

Earlier quoted context omitted.

The equity holders and management of SVB are likely to be wiped. In the petition we specifically call this out: we are not asking for their risks to be "socialized." Depositors have a reasonable expectation that when they choose a bank (especially a publicly traded bank that is regulated) that their deposits are safe. If this is not true, then most people will only bank with the largest banks. That's not a good situa…

In hindsight, were there actions that depositors could have taken to reduce the risk? Was there any level of due diligence that could have warned people off of SVB?

Put the money in a money market fund backed by T-bills. Zero credit risk and easy access to cash.

> Was there any level of due diligence that could have warned people off of SVB?

Really no. A small business manager doesn't have time or expertise to read a bank's financial statements. SVB's did show serious problems but most businesses don't have the capacity to spot this.

But the answer to that is to not trust any bank for any long period when zero-risk options are available.

Re: Urgent: Sign the petition now

#795

Post by chernevik »

garry wrote: post #90
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.

These are depositors of a bank. Most startups only have one bank. Startups should live or die because they create good products and solve real problems in real markets, not because they made an arbitrary choice like which bank they started using. There's also a real risk of bank contagion if it is only safe to deposit in the largest banks.

You've made no reply to the many comments pointing out the many ways to safely manage cash.

Why aren't these companies, and the VCs advising them, responsible for neglecting Cash Management 101?

Re: Urgent: Sign the petition now

#796

Post by effingwewt »

smcl wrote: post #748
effingwewt wrote: post #672

Earlier quoted context omitted.

This was my reason for flagging it. The balls to even try this, I'm enraged and the last thing I want is them getting more eyes. This truly shows the disconnect we are now living in. They said the quiet part out loud.

Interesting, I thought it was the opposite - people attempting some kind of damage control since having a “Y Combinator is asking for a bailout” story on the front page is not a good look. But I guess the title was changed to be a little less incendiary

Not for me, personally.

This wasn't an article or blog post talking about the out-of-touch CEO-bros having the lack of self-awareness to even attempt to have us bail them out.

This was a direct link to their 'petition'.

We've gone beyond moral hazard, we are now at the point where it's expected for tax-payers and poor people to bail out the rich when their greed finally catches up with them.

Re: Urgent: Sign the petition now

#797

Post by molsongolden »

bigbillheck wrote: post #772
molsongolden wrote: post #372

Earlier quoted context omitted.

Or… also to all of the people employed by the startups?

You mean the 'independent contractors'?

All of those VC-backed companies are out there spending that VC money by paying it to employees.

Re: Urgent: Sign the petition now

#798

Post by chernevik »

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…

This. I'm afraid that Garry and others are exaggerating the situation to make a case for their bailout. They're freaking people out rather than helping them work the problem.

This has real consequences. The FT reported this morning that companies are selling SVB deposits for 50%-65% on the dollar to make payroll. That is a HUGE mistake, but understandable for some 25 year old naif who's been told the sky is falling.

https://www.ft.com/content/3c6551ff-9778-4713-afc5-f87ba0bb8...

Re: Urgent: Sign the petition now

#799

Post by UmYeahNo »

garry wrote: post #336
UmYeahNo wrote: post #15

When we little guys put our eggs in one basket, or put excessive reliance in business we have no control of we get accused, sometimes implicitly, sometimes explicitly, of being incompetent. That we should've known better. Hmmm.... The cynic in me says this letter is less about bailing out the small companies trying to make payroll and more about the VC's not wanting to lose massive investments.

We're trying to help our founders, and this is a moment where awareness of this problem in DC and in the halls of power matter.

As someone who is facing the prospect of re-skilling my career again after being "disrupted" out of my first career, happening a second time 15 years later due to AI, my sympathy for your founders is in short supply. Your founders may get screwed like the many, many workers out there that get screwed all the time by factors beyond their control.

I mean, if you can save the jobs of the people you funded, great. But, founding a startup is risky, blah blah blah... and losing a few or a few thousand hardly seems like a reason to call congress. At least no more than any other industry getting disrupted. We've seen, and perhaps you've been part of, putting huge swaths of people put out of work. Huge swaths of business out of business. Industries that came crashing down at no fault of the business owner, other than not being prepared for some an unseen stealth startup who leveraged prior institutional knowledge to come and take it all in a flash.

Re: Urgent: Sign the petition now

#800

Post by eropple »

glerk wrote: post #750
briHass wrote: post #544

Earlier quoted context omitted.

How is this the government's fault, unless you want to talk about tighter regulations? From a libertarian perspective, you deposit money at a bank, they make you sign documents about the well-known FDIC insurance limits (a bonus insurance offered by the government), and you make the free choice to mitigate whatever risks you think you have based on that 250K vs whatever you plan to deposit. It's essentially a busines…

I wouldn't say it is the government's fault , but is it that unreasonable to expect this basic safety net as a benefit for being a subject/customer of this government? Various organs of the government are claiming the authority to create and enforce financial regulations. And yet, cash deposits in government-backed currency at a 100% government-regulated bank can still vanish overnight. Given the huge costs of mainta…

> I wouldn't say it is the government's fault, but is it that unreasonable to expect this basic safety net as a benefit for being a subject/customer of this government?

Up to $250,000, which covers almost every individual and most businesses in the country.

You want to be bigger, you should be coming correct.

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