Yellen says government will help SVB depositors but rules out bailout • Hacker News Board

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

#681

Post by thecus » Sun, Mar 12, 2023, 5:19 PM UTC

mlyle wrote: post #659

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…

> Plenty of startups fit that bill and will nonetheless be impacted by SVB’s failure Startups are going to get most of their deposits back-- perhaps all if there's an acquisition. If SVB is not acquired, I hope the FDIC is able to get a substantial dividend quickly so that they can keep operating and that everyone works to keep disruption low. But I don't think the federal government needs to make depositors whole be…

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

#682

Post by lordfrito » Sun, Mar 12, 2023, 5:21 PM UTC

The lack of understanding here about how banks work is astounding. Are these the same people who feel it's their God given right to "move fast and break things"?

Disruption is great. Too bad for the music industry. Too bad for journalism. Too bad for legacy taxi services, etc. Disruption is great, except when it happens to you?

Aren't we all here in the business of managing risk? Or, after a decade of cheap money, has it just become all lip service?

"It's not my fault!" [1]

This recession is going to be brutal, but it's been a long time coming. Thank God money is going to start having value again.

[1] https://y.yarn.co/9c4c1fa3-fb64-4132-b44f-7cde70eafd0f_text....

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

#683

Post by shadowgovt » Sun, Mar 12, 2023, 5:21 PM UTC

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…

Over 50% of startups fail. If you factor in acquisitions as failures, the number is closer to 90%.

HN has been around awhile and has been a hotbed of the same starry-eyed startup dream for a couple generations of young people getting on the carousel now, so I guess I'm not terribly surprised if the attitude "welcome to the club, we would print you a t-shirt but our printer startup went out of business" shows up around these parts from the folk who have been on the ride awhile.

There are a lot of folks who read HN who had their dream crushed for a lot stupider reasons.

ETA: that is something I'd like to see more of here though. There's a lot of folks who have been through a bust cycle and survived it and even stayed in the industry. What kept you going? How did you come out the other side? Was it as scary as it feels when you haven't done it before?

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

#684

Post by wpietri » Sun, Mar 12, 2023, 5:21 PM UTC

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.

If you're claiming that startups are so systemically important that they need special protection, then you are also saying that they are so systemically dangerous that they need much more aggressive regulation.

Is that really what you want?

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

#685

Post by nullc » Sun, Mar 12, 2023, 5:21 PM UTC

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…

almost every online discussion these days seems to get filled with bloodthirsty people, HN is no exception.

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

#686

Post by balves » Sun, Mar 12, 2023, 5:21 PM UTC

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 wonder how much of this saltiness -- both on HN, reddit, and mainstream media -- is due solely to the name of the bank.

If the headline was "California Regional Mutual Bank and Trust fails" (I made up the name, I don't know anything about banking, don't nitpick the terms) it surely would have still been newsworthy because of the size of the bank, but I suspect there would be less vitriol around the situation with the Silicon Valley connotation removed from it.

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

#687

Post by stuckinhell » Sun, Mar 12, 2023, 5:21 PM UTC

idopmstuff wrote: post #565

jjulius wrote: post #551

Earlier quoted context omitted.

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?

> 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? Absolutely. What's surprising to me is the absolute lack of that nuance on HN. It's all just BURN IT ALL TO THE GROUND over the last few days.

Alot of people are rightfully upset because the banking industry cannot seem to get its shit together. Why do so many banking/financial crisis's keep occurring ? Why are executives not being put in prison for ruining so many lives ?

People are reaching their limits.

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

#688

Post by tome » Sun, Mar 12, 2023, 5:22 PM UTC

stanleydrew wrote: post #203

koolba wrote: post #59

Earlier quoted context omitted.

> But when it comes to depositors, I think it makes a lot of sense to make them whole, especially in the case of SVB where the bank likely has pretty close to enough assets to cover the liabilities (deposits), but its tied up in such long term investments that it could take a long time to get it out. If anybody gets an extra penny more than $250K from the Feds than that is by definition a bailout. > But moreso, when…

> If anybody gets an extra penny more than $250K from the Feds than that is by definition a bailout. I think this is naive. The FDIC or some government entity is in a pretty reasonable position to take on the longer duration assets that appear to have brought down SVB. If they hold those assets to maturity then everything is fine, and they can return deposits today if necessary because they don't need to sell assets…

> If they hold those assets to maturity then everything is fine, and they can return deposits today if necessary because they don't need to sell assets to generate cash.

The federal government will be out of pocket by the interest rate spread if it does that. That is a bailout.

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

#689

Post by iancmceachern » Sun, Mar 12, 2023, 5:22 PM UTC

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…

The issue is it wasn't pension money. It was VC money, that's money intentionally being gambled in high risk endeavors. It's not right for thr tax payers to bail out rich VCs who gambles their money.

On the flip side, I also have worked in startups much of my career, and think I and people like me should be paid for our work. I think we should help the startups out, bail them out, but without helping the VCs. I think what that means is the startups effected should get their money back, but the VC owned shares of the company then become government assets that can be sold in the future to offset the cost of the buyout.

It's simply not right for government money to bail them out, but fornthe VCs to profit from it years from now.

Edited to add: In the end the point I'm trying to make is that it's not right for us to take money from average non-rich Americans to pay back VCs (rich americans) who gambled their money. If the bailout comes from people that earn more than 500k a year exclusively then I'm all for it. But taking public money that was taken from a single mom who is barely getting by to do so is wrong.

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

#690

Post by [deleted] » Sun, Mar 12, 2023, 5:22 PM UTC

deepGem wrote: post #643

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…

People in general who are not good at something or didn't find success in that field, in order to feel their salt's worth have 2 options - either build something that's far greater than what they are not good at, or disparage what they you are not good at. The latter is a lot easier.

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