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

621–630 of 1001 posts

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

#621

Post by hedora »

JumpCrisscross wrote: post #430
peter422 wrote: post #396

Earlier quoted context omitted.

What bank do you use? When was the last time you went over their deposit base and asset allocation?

> When was the last time you went over their deposit base and asset allocation Sweep account and credit rating. First is a one-time option. Second, an occasional check.

Sweep accounts are fine, but I’m not sure I’d bother with credit ratings. SVB’s was basically as high as possible even for a few hours after the run started and before they closed:

https://ir.svb.com/shareholder-and-bondholder-information/cr...

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

#622

Post by whimsicalism »

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…

I think it has to do with Nietzschean slave morality and a media angered by losing advertising revenue to strong competitors.

The media is literally competitor in the attention economy, of course they will attack their biggest foes.

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

#623

Post by bostik »

IG_Semmelweiss wrote: post #50
sithlord wrote: post #19

Earlier quoted context omitted.

My guess ( I havn't looked at is the last ones ) is that the majority of deposits were well under 250k, and that hundreds of thousands of jobs weren't on the line. Also, you are talking about a major banking collapse if people start thinking that their deposits aren't safe. (a lot of people will start pulling money, even if under 250k). There are so many irrational people out there... edit: I guess somewhere in what…

Thats not true. It was said elsewhere in HN thread and also in several articles online. The majority of avg deposits were NOT Only 3-7% of SVB accounts under FDIC limits. Edit: corrected to have specific languange

I'm going to copy-paste a good chunk of my answer from an earlier thread. (Original: https://news.ycombinator.com/item?id=35101797) - the article "The Demise of Silicon Valley Bank" wasn't on the front page long, probably because it was slightly dry and didn't provide any new hot take angles. But it did give out actual numbers:

> As at the end of 2022, it had 37,466 deposit customers, each holding in excess of $250,000 per account -- and -- The bank does have another 106,420 customers whose accounts are fully insured but they only control $4.8 billion of deposits

So SVB had only about ~150k banking customers. And of those, less than 40k are actually affected by this debacle.

-- -- -- --

The numbers are being mixed up, it feels. Only 3% of total deposits are covered witn the guaranteed FDIC insurance. The rest are spread across less than 40k depositors. And the average (not median, but plain mathematical average) amount on those accounts appears to be $4M.

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

#624

Post by pbourke »

matheusmoreira wrote: post #554
AmericanOP wrote: post #468

Earlier quoted context omitted.

Before people get too excited about letting it all burn, I recommend everyone watch this talk by an economist on the 2008 recovery: https://www.youtube.com/watch?v=RrFSO62p0jk Spoiler alert (18:30): It was entrepreneurship that turned the economy around. Not fed policy. SVB put their deposits in US Treasury Bonds. Commonly regarded as the safest investment vehicle there is. Then the fed raised interest rates, complet…

So what you're saying is the bank made investments based on a whole lot of assumptions. These assumptions were quickly invalidated by US policy changes and then the bank lost everything. Yes, absolutely let it all burn. They risked it all on their "strategy" and lost. Why should they get bailed out in literally any way? I don't see the government showing up to bail me out when my "strategy" gets me liquidated, why th…

If your strategy is keeping money in an FDIC insured bank account the government will absolutely bail you out. You have a guaranteed bail out up to the deposit insurance limits and a high-probability bailout for close to 100% of your funds through FDIC resolution.

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

#625

Post by senttoschool »

martythemaniak wrote: post #494
spamizbad wrote: post #271

Earlier quoted context omitted.

I think there’s a shocking lack of political literacy at work here because any action that could be perceived as a bailout by a layperson will be an albatross around the neck of any politician that supports such measures. Several of the VCs who spent Q4 of last year gloating about layoffs are now saying the sky is falling - so they aren’t exactly a sympathetic group. You can belly-ache about populism or whatever but…

Yep, the politics of this are terrible as well. Tech leaders like Sacks have spent years trolling people and making themselves as odious as possible and now they're crying for a bailout, while still being as odious as possible and blaming the government for this. But apart from the politics, even something as simple as Garry Tan calling for the government to guarantee all deposits is simply calling for the government…

I think Garry calling for a government bailout is a bit ironic considering how into crypto he is.

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

#626

Post by matheusmoreira »

TigeriusKirk wrote: post #581
matheusmoreira wrote: post #554

Earlier quoted context omitted.

So what you're saying is the bank made investments based on a whole lot of assumptions. These assumptions were quickly invalidated by US policy changes and then the bank lost everything. Yes, absolutely let it all burn. They risked it all on their "strategy" and lost. Why should they get bailed out in literally any way? I don't see the government showing up to bail me out when my "strategy" gets me liquidated, why th…

The bank is already gone. It's been wiped out. The discussion is now about the depositors.

Depositors lent their money to the bank. They took a risk by trusting a bank to manage their money for them. The bank took their money, invested it and lost it all.

Let them lose too.

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

#627

Post by tsunamifury »

matheusmoreira wrote: post #591
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…

It's likely startups only exist to begin with due to low federal interest rates. It is obvious that if those rates are low investors will look elsewhere. Startups are one of those elsewheres. Now that rates are on the way up, there's no need for investors to risk their money on startups anymore. So startups no longer have one of the pre-conditions for their existence. Namely, free investor money literally pouring in…

This is a dramatic misunderstanding of those two categories if investing, their motivations, and end goals.

It’s like saying an F1 team will now buy family economy cars to race with since their prices are down now.

You invest in a startup fund for extremely high risk high reward outcomes. You invest in interest rate bonds etc for guaranteed low outcome.

HN has become ridiculous.

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

#628

Post by Jtsummers »

idopmstuff wrote: post #617
reb wrote: post #580

Earlier quoted context omitted.

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 kid…

Nailed it. If people get whatever short term vengeance they're looking for, the contagion will cause a whole lot of collateral damage to people who aren't in tech.

What contagion? How is this going to spread to the rest of the US that isn't actually dependent upon any of these startups or this bank? No other banks have yet popped up with similar risk exposure so its not a systemic issue like 15 years ago and startups are not that big a part of the US economy.

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

#629

Post by avianlyric »

metalspot wrote: post #312
avianlyric wrote: post #188

Earlier quoted context omitted.

> The reason SVB is in receivership is because they don't actually have the ability to make all their depositors whole. No, SVB is in receivership because they can make their depositors whole right now . They have most of the assets, it’s just that liquidating them immediately would result in losses far greater than SVB can afford, but that’s what a bank run demands. The feds can take over, make depositors whole now…

bull. shit. if their assets actually could be liquidated for full cover over time than any other bank with plenty of reserves would be happy to buy them. that didn't happen, so we know for sure their assets are not worth what they claim on any timeline.

The last time a bank bought another failing bank, they also ended up buying a whole load of extra problems that made the total deal very costly.

No bank is going to want to buy SVB unless there’s a clear and substantial profit to be made (which their obviously isn’t), or there’s some guarantee that the purchasing bank doesn’t get held liable for any of SVBs historical misbehaviour.

Right now, I suspect that every bank capable of purchasing SVB is taking a “wait and see” approach. There’s no risk to them if SVB and their depositors get fucked. And there is substantial upside to waiting and seeing if the FDIC is going to try and setup a sweetheart deal for another bank to takeover. So why would any bank move early?

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

#630

Post by flappyeagle »

jjulius wrote: post #551
rqtwteye wrote: post #540

Earlier quoted context omitted.

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…

It's this. I would also like to point out that it's perfectly okay to simultaneously take pleasure in an industry being culled of precisely what you described, while also feeling bad for some of those who may lose their jobs as a result. Ain't nuance neat?

This isn’t nuanced. It’s confused.

If startups were going under because it turns out that they were pointless and there was no market, and they ran out of runway… then sure.

But this is their house catching on fire and all of their money just vanishing through no fault of their own.

It doesn’t distinguish between good startups and dumb ones, real businesses and nonsense — how could you root for this beyond pettiness?

Post reply on HN