Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Yellen says government will help SVB depositors but rules out bailout

ft.com

Post reply on HN
Print view View original

361–370 of 1001 posts

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

#361

Post by berkle4455 »

rib3ye wrote: post #160
mrcwinn wrote: post #26

Good. 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?

Roblox has $150M at SVB out of their $3000M cash position. They’re completely fine.

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

#362

Post by cjbprime »

sebzim4500 wrote: post #138
belter wrote: post #100

Earlier quoted context omitted.

For the downvoters... "International Monetary Fund - What Is a Bank?" - https://www.imf.org/external/pubs/ft/fandd/2012/03/basics.ht... ".... Banks are intermediaries between depositors (who lend money to the bank) and borrowers (to whom the bank lends money)..."

Your citation for why they aren't depositors refers to them as depositors. I'm confused.

Sounds like this commenter is not just arguing that language is being used incorrectly in this situation, but that the standard language and definitions are themselves propaganda terms.

(Usually people are a little clearer about their intent to argue that.)

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

#363

Post by jliptzin »

koolba wrote: post #307
jliptzin wrote: post #285

Earlier quoted context omitted.

It is completely insane to allow innocent depositors to lose their money especially when the government clearly would have no problem coming up with the funds to backstop depositors since this is an isolated incident. This bank being located in a tech hotspot is incidental and I am sure some non-techies are swept up in this as well. Imagine a 70 year old woman who just lost her husband and sold her house to downsize…

> Imagine a 70 year old woman who just lost her husband and sold her house to downsize to an apartment. She has $1 million in her SVB account and plans to live off the interest in her retirement. Should this 70 year old widow take a $750k haircut because she hasn’t spent the last few years brushing up on SBV 10-k filings and calling up SBV’s board of directors to ask them how they plan to manage interest rate risk? M…

So you’re saying the government (taxpayer) will get back 80%+ of the funds it uses to backstop depositors. Isn’t that a small price to pay to avoid a total collapse of the local and regional banking system?

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

#364

Post by JumpinJack_Cash »

In the aftermath of SilverGate and SVB demise people are rightfully (from their perspective) rooting for a shake-up at the top of the social pyramid.

I don't know if people realize but living in San Francisco and being at the helm of your own company with millions in equity funding is an extreme privilege.

Millions of things have to go right in order for that person to be in such position. That is the dream of many individuals who were not so lucky.

Now one thing goes wrong for them and there could be a turnover at the top, at least a shake-up, meaning other people will get to be in such extreme privileged position and the formerly privileged have to back down and go do something else instead. Something a bit less privileged.

Instead here comes daddy-government to ensure that everything is freezed in place with no shake up whatsoever.

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

#365

Post by brasic »

bratbag wrote: post #217
Cyph0n wrote: post #172

Earlier quoted context omitted.

Exactly. Rules for thee but not for me.

Different rules for something that could risk systemic failure, more like.

SVB explicitly argued that it was not capable of risking systemic failure and on that basis gained an exemption from Dodd-Frank rules that would have prevented them from failing to hedge against interest rate risk that took them down.

https://fortune.com/2023/03/11/silicon-valley-bank-svb-ceo-g...

There has to be some accounting for that.

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

#366

Post by fwlr »

daniel-thompson wrote: post #336
fwlr wrote: post #148

Eh, the depositors aren’t totally blameless here. On Thursday they conspired to perform a huge bank run on SVB, on Friday they succeeded, and on Saturday they were demanding the government and taxpayers make them whole by Monday. They deserve to get their money back and they eventually will once SVB’s assets are liquidated. But that’s not good enough, they want it now , and they won’t hesitate to make you pay for the…

> they conspired to perform a huge bank run Individual depositors don't need to conspire to reach the conclusion that in a bank run scenario, it is virtually always in each depositor's own best interest to withdraw their money.

With the “conspiring”, I am referring to reports of VCs mass-emailing their investees to move everything out of SVB right now.

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

#367

Post by ianai »

auntienomen wrote: post #337
ianai wrote: post #281

Earlier quoted context omitted.

Except this is the opposite of what happened in 2008 with bailing out the banks. Then, the banks got public money to remain solvent. Here, the bank is taking the hit and the government is ensuring the depositors get their funds back. In 08 people were kicked out of their homes and banks were propped up with public funds. Here, the depositors are being made whole and the bank is going out of business. The salt is your…

Tangent: In decades of socializing in NYC and the Bay Area, I've only ever seen the term 'flyover country' used by people complaining that the coastal elites look down on them. Never once heard the term from an actual coastal elite.

And I live in “flyover country” and hear it plenty and it is a fact of life and business here.

Look, when corporations like Amazon look for a new HQ they head to places like NYC. They say it’s because of the larger labor pools there. And it’s even valid to an extent - Arizona keeps getting semi fabs because they already have semi fabs and labor. The opposite would be looking for some location with the characteristics to grow over time into the location a company wants and making the expanse a long term project. Population characteristics absolutely can change on the scale of decades.

Edit-Just to put a point on this. “Flyover country” is undeveloped country. It’s cheaper to develop. If you want to build a huge fab in the middle of nowhere it’s going to cost little more than the costs of supplies and labor. And there’s always a way to get labor if the price is right. Do it in NYC or SF and you’re competing with all the other current/future uses of that land and it’s going to be expensive. Probably going to face zoning restrictions.

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

#368

Post by mark_l_watson »

tqi wrote: post #311

If depositors take a haircut, what incentives could smaller banks offer in order to remain competitive with GSIBs for business deposits? Higher rates seem like it would just increase risk.

Smaller local banks and Credit Unions are great! Just don’t keep more than $250K in any one of them.

The governance of Credit Unions tends to be very transparent, at least for the two that my family uses.

Seriously, you are promoting giving business to the major Wall Street banks? I would argue this is against your personal long term interests.

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

#369

Post by HervalFreire »

manuelabeledo wrote: post #132

I 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…

[dead]

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

#370

Post by ak_111 »

The only comic thing in this entire tragedy is watching the fanatics who have been relentlessly preaching to others such dictums as “move quick and break things” and “only the paranoid survive”, extolling the virtues of “creative destruction” and repeating ad infinitum the Reagan quote "The top 9 most terrifying words in the English Language are: I'm from the government, and I'm here to help" cry out for government intervention, with seemingly zero self awareness in how it basically contradicts their entire world view.
Post reply on HN