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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

#571

Post by CharlieDigital »

tsimionescu wrote: post #505
mixologic wrote: post #441

Earlier quoted context omitted.

You get your last paycheck, sure, but you still lose your job which is definitely a threat to workers lively hoods. It's even more of a threat if the whole sector you're employed in suffers simultaneously, as it becomes difficult to continue to be employed in that sector.

If things get dire enough, the government can intervene to protect workers in various ways (unemployment benefits, emergency housing, government employment - there are many options). No need to prop up the middlemen with free insurance.

> with free insurance

Taxpayer funded insurance.

What I wonder here is how many SV CEOs and VC partners are down with Biden's proposed hike on the capital gains tax rate.

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

#572

Post by norwalkbear »

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…

It will hurt silicon valley extremely hard. It already is, paychecks won't be coming, trust is gone. Silicon valley was seen as brilliant but now is a joke.

Ironically most small to mid non tech businesses will be just fine.

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

#573

Post by FartyMcFarter »

idopmstuff wrote: post #558
tsimionescu wrote: post #416

Earlier quoted context omitted.

First of all, even if the company you work for goes bankrupt, you're very likely to still receive your salary, as debts to workers are the highest priority in any bankruptcy case. So the risk to workers' livelihoods is being way overblown. Of course, if a substantial amount of your compensation was company stock, you may lose a lot on that, but that is par for the course with stock. Second of all, the purpose of havi…

I'll probably get my next paycheck or two, but I'll lose my job. You're pretty clearly saying here that I should lose my job, along with many other people, because of the bank at which my company's cash is stored. > Perhaps they shouldn't keep money in the bank in the first place, but find other uses for them. I work at a small startup that's raised five million dollars. Not a huge amount of money, but obviously losi…

I'm not sure your founders are as "extremely" prudent as you claim them to be. For example, couldn't they have spread their funds throughout more banks instead of putting their eggs in one basket?

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

#574

Post by [deleted] »

TrispusAttucks wrote: post #535
mixologic wrote: post #441

Earlier quoted context omitted.

You get your last paycheck, sure, but you still lose your job which is definitely a threat to workers lively hoods. It's even more of a threat if the whole sector you're employed in suffers simultaneously, as it becomes difficult to continue to be employed in that sector.

That definitely sucks but why should Americans who had nothing to do with the bank or sector fork over public tax dollars to provide a soft landing?

[deleted]

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

#575

Post by dangero »

WkndTriathlete wrote: post #526
gerad wrote: post #199

Earlier quoted context omitted.

I just don’t understand why folks on the internet are so passionate about the depositors being hit by this. In terms of avoiding moral hazard they are about as far down the list as possible, and bankruptcy law supports that. First stock holders get wiped out (common then preferred), then debt holders (folks who have lent money to SVB won’t get their money back), only then would it hit depositors - and in the case of…

> If depositors aren’t protected, then it’s going to have a lot of downstream impacts If depositors with deposits above the FDIC insurance limit _are_ protected then there will be nothing stopping this from happening repeatedly in the future. Depositors that exceed the FDIC insurance limit should be taking a haircut so they learn to do better risk analysis of their bank or purchase auxiliary deposit insurance on thei…

This bank run happened based on fear of the scenario we are now in. No bank can withstand a bank run due to fractional reserve ratios.

If the depositors lose big then that will increase this fear going forward.

In other words, if all depositors are covered there is no longer a substantial fear of a bank run elsewhere. That’s how it stops it from happening again.

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

#576

Post by reilly3000 »

idopmstuff wrote: post #339
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…

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 just don't get where that comes from.

YEARS of disinformation about "Personal Responsibility" and not a lot of critical thinking in the interim. I'm not specifically talking about the parent comment.

Your point is sound and seems obvious to me. I also spent several years studying and fighting coordinated inauthentic content its effects on the brain. Whether coordinated or not, hearing the same message over and over again gets internalized such that it becomes reflexive to parrot.

What happens when you give every single high school senior $1000 scholarship to read Ayn Rand? What happens in a society when hyper-capitalists, their politicians, and their media narratives leave no room to consider things that are beautiful and human? What happens when STEM education starves all of the humanities of oxygen?

If it isn't this, I don't know what it is, but we're all about to find out.

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

#577

Post by [deleted] »

ak_111 wrote: post #370

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 i…

[deleted]

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

#578

Post by starkd »

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…

For anyone interested, the All-In podcast did an excellent job covering this on Friday. Particularly, David Sacks stressed this would not be a bailout, but merely backstopping deposits. SVB did nothing illegal or wrong, so it is not an Enron situation.

https://www.youtube.com/watch?v=CEee7dAk25c

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

#580

Post by reb »

rqtwteye wrote: post #540
idopmstuff wrote: post #339

Earlier quoted context omitted.

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 think the backlash against tech comes from many years of tech celebrating themselves and being celebrated as “disrupters” for a lot of bullshit startups. And the amounts of money made with companies hat have no real business is just astonishing. It would be nice if it went back to focusing on creating sustainable businesses that make useful products that benefit their users and aren’t just another vehicle for mass…

Plenty of startups fit that bill and will nonetheless be impacted by SVB’s failure, while the most pointless businesses surf by on their founders’ access to inherited wealth and political power. Any revenge on them will be short-lived and will have serious, lasting consequences for middle class workers throughout the industry. For anyone reading this who doesn’t already know: startups aren’t all snotty trust fund kids making $300k+ selling AI deodorant on the blockchain.

As I said on another post this weekend, I’ll remember the comments I’m reading here for the rest of my life.

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