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

881–890 of 1001 posts

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

#881

Post by lazyeye »

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…

Think of in terms of the same sneering contempt we've seen from Silicon Valley towards middle America. Except the idea that Silicon Valley taxpayers should contribute to bailing out anyone else would have been seen as laughable, middle America hasn't been earning multiples of Silicon Valley, and middle America hasn't been censoring everybody else, or monetising privacy abuse/destruction of youth mental health on a scale never before seen in human history.

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

#882

Post by sanderjd »

reb wrote: post #580
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…

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…

Just keep in mind that miserable jerks are naturally more inclined to be noisy. This is showing up on both sides of this debate. There's these miserable jerk VCs noisily demanding tax funded bailouts to preserve some of their wealth that is at risk. And there are the miserable jerks you're talking about on the other side who claim to want to see a bunch of peoples' livelihoods put at risk.

But those people are just a noisy minority. Most people are quietly somewhere else on the continuum between those extremes.

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

#883

Post by rkhacker »

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…

>“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?

To me such statements feel like - either you are with me or against the humanity. Of course, the government should not gobble the money that belongs to the depositors and the fund should be distributed fairly to the depositors post liquidation. But making whole the deposits through the tax payers money will not be right. This is a business failure and what is insured is only what is guaranteed to be paid back. That is the risk business take when they engage in such transactions.

Individuals who had more than $250k sitting in bank account must be well-off and prudent enough to decipher the FDIC insurance limit.

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

#884

Post by wanderingmind »

300bps wrote: post #139
walnutclosefarm wrote: post #98

I think Yellen is signalling the right approach, frankly. First, the balance between the bank's assets (its loans and the investments it made with depositors money, plus the bank's capital) and its liabilities, is such that SVB has enough holdings to cover nearly all of its deposits. The banks capital (that is its equity, and subordinated debt) should all go toward making depositors whole. That's what bank capital is…

First, the balance between the bank's assets (its loans…) Keep in mind those loans are largely being paid by SVB customers that are very likely scrambling to make sure they can pay their employees right now. It’s pretty assured that more SVB loans will be defaulting in the coming weeks than if their depositors didn’t lose access to about half of their money.

This, people here are not talking about feedback loops and second order effects, most lending customers and depositing customers are highly correlated

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

#885

Post by deltree7 »

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…

HN has been brainwashed by Progressive Universities and reddit. Period.

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

#886

Post by ak_111 »

nemo44x wrote: post #876
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…

The government and its institutions (The Fed) had a big part in this though. They flooded the market with cash, sold a bunch of bonds with low interest rates (lowest ever) to tons of banks that had to figure out how to manage that cash and did so by buying “the safest investment”, and then that same institution jacked up interest rates to the highest in 20 years over the course of 10 months. So no, if the government…

I am not a fan of the Fed, but it was created precisely to stabilise the banking system due to a huge number of bank runs (that happened before it was created).

I think the only consistent libertarian position on this would be to concede that bank runs are totally normal (and welcome even) aspect of a capitalist system and they should never be bailed out or depositors compensated as it would be rewarding irresponsible behaviour (both by shareholders AND depositors).

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

#887

Post by roflyear »

tsunamifury wrote: post #650
roflyear wrote: post #570

Earlier quoted context omitted.

I think I lean towards you, but what people are actually suggesting is that these startups shouldn't be bailed out when they went with a bank with super-high promised rates, while they of course knew their deposits over $250k were uninsured.

They haven’t lost the money yet. Read and understand before you comment. The banks assets lost 10-20% value not 100%

That's very rude. I haven't implied they lost money, to start, and 80% today or this week is much different than 80% in months.

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

#888

Post by mullingitover »

shadowgovt wrote: post #692
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…

No, but the median salary for a software engineer is still 120k, a little under double the median salary across all industries. It's hard to dredge up deep, deep wells of sympathy for folks who were already playing the salary game at double the value of half the players. One can't escape the sense that if they've done the kind of budgeting that a regular American does, they will be fine.

> One can't escape the sense that if they've done the kind of budgeting that a regular American does, they will be fine.

I can't escape the sense that if they've done the kind of budgeting that a "regular American" does, they're in deep trouble[1].

[1] https://www.fool.com/the-ascent/research/average-savings-acc...

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

#889

Post by lbrandy »

mixdup wrote: post #878
omginternets wrote: post #825

Earlier quoted context omitted.

Respectfully, I think you are the one playing with definitions. “Bailout” refers to shareholders. It refers to bailing out the institution, not it’s depositors. We can talk about a depositor bailout if you want, but let’s not pretend it’s the same thing, not pretend it’s what the term “bailout” commonly refers to.

We’re changing the (very well) known rules in the middle of a crisis and acting like we didn’t know what happened could happen, when we did. This is a bailout

The only reason you and others seem so desperate to redefine bailout so you can call it a bailout is because you want to attach the negative connotations to that word to “hurt” the people you want to be hurt.

It’s embarrassing, shortsighted, and destructive.

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

#890

Post by rashkov »

grej wrote: post #632

Seeing all of the “screw them, they are VC’s & tech bros, they took a risk they own it” sentiment on Twitter makes me sad. It’s a hard realization of how little clue so many people have about so much of the way the financial system works, and who would actually be impacted by these losses. Also seeing finance bro hot takes like, oh those companies took the risk and should have done due diligence on the bank. SIVB was…

The great financial crash and the socialization of losses that followed it have a lot to do with this populist attitude
Post reply on HN