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Urgent: Sign the petition now

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Re: Urgent: Sign the petition now

#831

Post by jmull »

somsak2 wrote: post #616
jmull wrote: post #433

Most startups fail. Propping these companies up now with government money (that is, our money) will just make the failures cost more, ultimately. What we're really talking about here is bailing out investors who, of course, knowingly took these high risk flyers. (BTW, the rising interest rates affects everything about this kind of investment. All kinds of things that made sense in the era of free money are going to s…

I really doubt that when these startups put money into a bank account they were "knowingly taking a high risk."

We're talking here about bailing out startups. The VC investors, founders, and even employees (to a somewhat lesser extent) made a high-risk decision to invest their time and/or money into something that would probably fail.

(Also, it's not like a tax-payer funded bailout is the only way these startups can stay afloat... take a bridge load... find an opportunistic investor. Of course the startup investors would much prefer a taxpayer funded bailout because other options will cost them more money and/or a share of the startup. As many are pointing out: they are seeking to socialize the risks and keep the rewards.)

Re: Urgent: Sign the petition now

#832

Post by Fatnino »

nuclearnice3 wrote: post #445
rahimnathwani wrote: post #185

Earlier quoted context omitted.

The possibility of changing the rules of the game once it's started can create moral hazard. For example, if people believe that the govt will use taxpayers' money to reimburse funds that were not FDIC protected, then they won't be careful about picking their bank. And it's a lot of money (e.g. 30% loss on $200bn is about $600 per US resident household). But I'm conflicted, because: - the federal administration doesn…

> And it's a lot of money (e.g. 30% loss on $200bn is about $600 per US resident household). This calculation really put it in perspective. CEO of HN asks that every family in America send his friends $500.

Except low income families shoulder less of this than mega gazillionairs. In theory.

Re: Urgent: Sign the petition now

#833

Post by hnfong »

dehrmann wrote: post #736
muzz wrote: post #597

Earlier quoted context omitted.

Because 2008 was so long ago? What were the CFOs of these companies doing.

I don't think depositors lost money in 2008. The lessons from 2008 were to look out for risks of an asset class failing and that packaging risky, correlated assets doesn't make them much safer. The lesson here is sudden interest rate increases can cause bank failures. This was a mostly unknown unknown.

> The lesson here is sudden interest rate increases can cause bank failures. This was a mostly unknown unknown.

What? It's only unknown if all you know about financial crises are from 2008.

A google search on "borrowing short and lending long" gives this in the first page:

http://www.bondeconomics.com/2015/09/banks-borrowing-short-a...

Re: Urgent: Sign the petition now

#834

Post by hnfong »

andrepd wrote: post #770
dehrmann wrote: post #736

Earlier quoted context omitted.

I don't think depositors lost money in 2008. The lessons from 2008 were to look out for risks of an asset class failing and that packaging risky, correlated assets doesn't make them much safer. The lesson here is sudden interest rate increases can cause bank failures. This was a mostly unknown unknown.

LOL! Neither "packaging correlated assets doesn't make them magically AAA, so we'll also commit ratings fraud", neither "uninsured money at a bank can be lost in sudden market shifts (or simply mismanagement or fraud)" are/were unknowns. These people took risks KNOWINGLY, because they were rewarded handsomely by it. Now and then it rears its ugly face and we're supposed to pay the check? Give me a break.

I'm struggling to understand how taking the risk of "uninsured money at a bank can be lost in sudden market shifts" can reward one handsomely. Is there some way I can make spectacular gains by depositing money in a mismanaged bank?

Re: Urgent: Sign the petition now

#835

Post by DennisP »

IncRnd wrote: post #823
DennisP wrote: post #768

Earlier quoted context omitted.

I mentioned DIF above, and as I said there, it's not third-party insurance that you can go purchase. What you can do is get certain accounts that automatically include it for free: https://www.difxs.com/DIF/Home.aspx Here is the complete list of DIF-covered banks: https://www.difxs.com/DIF/DIFmemberbanks.aspx It's a short list, they're small banks, and they all have addresses in Massachusetts. Wells Fargo and Bank of…

If you have an account in need of insurance in excess of the FDIC limits, you can speak with your CFO about depositor bonds or contact the appropriate party about any of the other methods in the links that were posted in this thread.

Unless you have a link for these depositor bonds, I'll remain skeptical since they weren't mentioned in your previous link, google produces nothing obvious and DIF isn't at all what you'd claimed.

Re: Urgent: Sign the petition now

#836

Post by scarface74 »

molsongolden wrote: post #804
scarface74 wrote: post #488

Earlier quoted context omitted.

Equity that will statistically be worthless? You might as well say Hasbro distributes more money than most companies because of all of the Monopoly games they sell.

If startup equity is worthless then that will usually mean the VCs make no return on their investment. If VCs make no return on their investment then they have just dumped millions of dollars into the pockets of startup employees and vendors.

And those employees would be statistically better off working for one of the public BigTech companies that give salaries + RSUs.

I can trade my RSUs for real cash every six months after they are deposited in my account. I know the potential value of my next RSU grant every 15 minutes as it is updated on my Google Sheets.

The VCs make a return by diversifying their bets. But as an employee for a startup, you are not well diversified.

On a related note, Warren Buffett made a bet with hedge funds that he could have better returns just by investing money in an index fund over 10 years - he won

Re: Urgent: Sign the petition now

#837

Post by offshoreguy101 »

How about the over 5,000 CEOs and founders who signed this petition pool THEIR money and bailout Silicon Valley Bank.

How about the shareholders of Silicon Valley Bank pool Their resources and bailout Silicon Valley Bank.

Taxpayers have zero responsibility to lift a finger to put one penny into this failing bank. You all should have understood that a bank can do foolish and stupid things with your money when it's too big to fail.

Re: Urgent: Sign the petition now

#838

Post by molsongolden »

scarface74 wrote: post #836
molsongolden wrote: post #804

Earlier quoted context omitted.

If startup equity is worthless then that will usually mean the VCs make no return on their investment. If VCs make no return on their investment then they have just dumped millions of dollars into the pockets of startup employees and vendors.

And those employees would be statistically better off working for one of the public BigTech companies that give salaries + RSUs. I can trade my RSUs for real cash every six months after they are deposited in my account. I know the potential value of my next RSU grant every 15 minutes as it is updated on my Google Sheets. The VCs make a return by diversifying their bets. But as an employee for a startup, you are not w…

No disagreement here. Ignoring the other pros/cons of BigTech vs. startup work culture that some might mention, many startup employees would take BigTech jobs if they could. Not everybody can land a BigTech job though.

Re: Urgent: Sign the petition now

#839

Post by chernevik »

What people are missing is that the only way a Silicon Valley Bank can exist is if one such is allowed to fail.

If the government is to back deposits 100%, then it should and will have authority to regulate assets purchased. Anything looking different or new or without a track record will be "risky" and unsuitable. Hello, that's what startups look like. Do you want some bureaucrat holding veto power over your bridge loan? Well, if the regulator is on the hook for the loss, then that's what you've got.

Re: Urgent: Sign the petition now

#840

Post by jlmorton »

medvezhenok wrote: post #779
beezle wrote: post #692

Earlier quoted context omitted.

You can find similar rates from some other banks today. It is not so hard to do when 1mo treasury bills are yielding 4.80 and 3m over 5.0%

It's about 1% higher than most solid/large high-yield online banks right now (Capital One 360 at 3.4%, Discover Savings is at 3.5%, Ally Bank is at 3.6%). So I wouldn't say that you could get 4.5% from a reputable bank at the moment.

The 4.5% rate linked above is in a money market account. It's the exact same rate available from Vanguard today.
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