451–460 of 1001 posts
Earlier quoted context omitted.
It's coming from the same system that probably led you to work at Startups your whole career. High risk for high reward on a lightly regulated capitalist system. If your CEO or CFO put all the money in one risky bank, it was bad financial management.
Many were restricted by covenant with their investors to only use SVB.
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…
I'm pretty baffled to see so much of this on HN. Like a whole lot of people here, I've worked at startups for my whole career. People here are effectively suggesting that I shouldn't get my paycheck and that the company I work for should lose most of its money because our CEO used a well-reputed bank? Absolutely wipe out the equityholders of SVB. They deserve nothing, because that's what you should end up with if you…
Because you want to take my money, and your justification for wanting my money is simply “My company made a mistake.”
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…
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…
I'm pretty baffled to see so much of this on HN. Like a whole lot of people here, I've worked at startups for my whole career. People here are effectively suggesting that I shouldn't get my paycheck and that the company I work for should lose most of its money because our CEO used a well-reputed bank? Absolutely wipe out the equityholders of SVB. They deserve nothing, because that's what you should end up with if you…
I don't see this as a fair statement. There is a difference between killing a startup and letting it die.
Zero interest-rate policy allowed for the creation of investors and startups that never had to think about the realities of managing cash.
Using FDIC insurance to keep them afloat is acceptable. Anything beyond that is silly.
Earlier quoted context omitted.
> Money to depositors for amounts greater than $250K is a bail out. They have no right to that money from the Feds. No. The feds aren't giving anyone fed money, they're selling SVB's assets and giving the people they owe their own money back. There isn't enough money to give everyone 100% back, so they won't be getting 100% back. There's no extra government money making anyone "whole". They're just winding down the a…
Extra money is precisely what Yellen is proposing. The government will backstop the depositors to prevent a run on every other non-SIFI. This is the right move.
Then you should be able to offer up a quote where she says that.
Hint: she never said that.
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…
> "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. From the broader public's perception, you're splitting hairs. The gov - at taxpayer's expense - *are* ______ing* depositors with deposits over $250k. Depositors who are well aware of the limits of what's covered. Depositors with more…
The FDIC isn't funded by the government. FDIC runs and provides this insurance by premiums paid by banks.
No taxpayer money is going into SVB.
https://en.wikipedia.org/wiki/Federal_Deposit_Insurance_Corp...
> The FDIC is not supported by public funds; member banks' insurance dues are its primary source of funding.
> When dues and the proceeds of bank liquidations are insufficient, it can borrow from the federal government, or issue debt through the Federal Financing Bank on terms that the bank decides.
We are still currently at "using premiums" and moving into "liquidating bank assets".
Earlier quoted context omitted.
The C-suite paid themselves millions of dollars via bonuses and stock sales right before insolvency. Executives got paid. What’s to stop future bankers from running the same playbook? (We can debate that this the stock sale was premeditated/signaled months in advance, but the stock had already declined 80% from its 2021 peak and they surely knew about the tough liquidity position months ago — external observers drew…
How does making the depositors whole affect any of that, though?
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Where do you propose a company with millions in cash keep that money if not a bank?
My first suggestion would be as T-Bills. I've asked a lot of questions on HN in the past few days about this, and I'm still not sure why it was not standard practice. Why people in position of authority trust bank deposits after 2008 I do not understand.
- helping FDIC insured, helping businesses with a few million in deposits that want to hit payroll, VCs, and “billionaires” - rich people’s funds
- a bailout (using taxpayer funds) vs receivership to make depositors whole as possible
- a bailout of the bank itself (aka 2008). Bailout of the depositors. Just trying to prioritize business deposits over other depositors, etc
I suspect a lot of emotional disagreement is really more about not understanding what each other is really saying than anything else.
Earlier quoted context omitted.
The C-suite paid themselves millions of dollars via bonuses and stock sales right before insolvency. Executives got paid. What’s to stop future bankers from running the same playbook? (We can debate that this the stock sale was premeditated/signaled months in advance, but the stock had already declined 80% from its 2021 peak and they surely knew about the tough liquidity position months ago — external observers drew…
So to punish them, we need to punish depositors?!?
It’s not that we punish the depositors but the scheme is set up that depositors suffer.
Imagine the mob stole all that money. It’s not punishing the depositors to not pay them back. The mob punished the depositors by stealing.
If I don’t buy homeowners insurance and some arsonist burns down my house, I’m out $100k to rebuild. Is it punishing me if the government doesn’t bail me out? The government isn’t punishing me, the arsonist punished me.
If we want government coverage then we should enact laws to cover this kind of thing and raise taxes and fees accordingly. We can’t enjoy the benefits of low regulation when it makes us money and then ask for coverage after the fact. After we’ve reaped the benefits of no regulation.