I think that a lot of societal ills can be chalked up to "low interest rate phenomena." Silicon Valley has had a decade to play with free money. What do they have to show for it? Smartphone CRUD apps, subsidized gig workers, influencers and child consumers. Let's keep raising interest rates.
Ask HN: Has your view of Silicon Valley changed in the last 72 hours?
51–60 of 102 posts
Re: Ask HN: Has your view of Silicon Valley changed in the last 72 hours?
#52Pre-SVB: SV was full of some really smart people, many of whom didn't realize their skills and experience don't translate to other areas (eg pretty much anything to do with crypto) combined with some salesmen, some of whom are snake oil salesmen. Together they are more and more resembling the rest of Corporate America with performative cultures, privatizing their own luck, often having unearned bravado and increasing…
"Cost the taxpayers nothing" - well not in "taxes", but I'm not sure we can really say nothing. Clearly the banks paying for it won't just eat that cost.
Re: Ask HN: Has your view of Silicon Valley changed in the last 72 hours?
#53No lmao
Re: Ask HN: Has your view of Silicon Valley changed in the last 72 hours?
#54Earlier quoted context omitted.
I didn’t say that Washington setting the rules was a good thing — but who else will step in where there has been a complete vacuum of any leadership in Silicon Valley in the last few days?
What kind of leadership were you expecting? The rules didn't change recently, the rules just got executed as planned, which prescribed the FDIC takeover.
The rules also stated that FDIC insures amounts up to 250k$. This rule changed in a big way over the week-end.
Re: Ask HN: Has your view of Silicon Valley changed in the last 72 hours?
#55Earlier quoted context omitted.
I feel like the 10 year MBS investment might actually have been a case of excess risk. In a world of zero interest rates (which I presume is when they invested in the MBS), 1.5%-2% yield makes SVB quite a bit of extra profit. Their investment may have been a case of greed and poorly controlled risk.
Go back to 2021 before rates go up and tell me what you’d do. Kinda damned either way. The bank had to make profit to survive btw. They dont pay for their services on good will.
Most other banks found ways to survive the environment in 2021. So clearly there are ways to do it without locking money up for 10 years in MBS.
Re: Ask HN: Has your view of Silicon Valley changed in the last 72 hours?
#56Earlier quoted context omitted.
What shareholder bailout? If you’re referring to SVB, shareholders will be wiped out. Only depositors are being bailed out (/made whole).
Everyone knew FDIC limited to $250k an account. They put more in anyway and got bailed TF out. It's a bailout of depositors who didn't hedge risk among multiple accounts. Make no mistake, it's a bailout. I'd be more OK with it if regular citizens didn't get shafted at every opportunity but the wealthy always get a pass. Steal a $2 bag of chips, get a year in jail. Take a stupid risk on overfunding your account over F…
If depositors split $1 million across multiple accounts, then they would be made whole with FDIC insurance for each account. If they have the same $1 million in one account, they’re still being made whole for the same amount. There’s literally no difference in the amount of money being paid back to them in either scenario.
Re: Ask HN: Has your view of Silicon Valley changed in the last 72 hours?
#57[deleted]
Re: Ask HN: Has your view of Silicon Valley changed in the last 72 hours?
#58Earlier quoted context omitted.
Everyone knew FDIC limited to $250k an account. They put more in anyway and got bailed TF out. It's a bailout of depositors who didn't hedge risk among multiple accounts. Make no mistake, it's a bailout. I'd be more OK with it if regular citizens didn't get shafted at every opportunity but the wealthy always get a pass. Steal a $2 bag of chips, get a year in jail. Take a stupid risk on overfunding your account over F…
If depositors split $1 million across multiple accounts, then they would be made whole with FDIC insurance for each account. If they have the same $1 million in one account, they’re still being made whole for the same amount. There’s literally no difference in the amount of money being paid back to them in either scenario.
If they had split the $1m over 4 accounts and only 1 failed, there would be no need for a bailout. It's redundancy, something every tech person learns about pretty early on. It's hedging risk, something every finance person learns about pretty early on. It's basic, fundamental stuff in two disciplines.
Fine it's an error, take your medicine. My problem is when the average Joe makes an error, they get the full force of the justice system coming down on them. Walk around the area, you'll see a bunch of them living in tents.
Re: Ask HN: Has your view of Silicon Valley changed in the last 72 hours?
#59There's a Silicon Valley I see on the news and Twitter that I've still never once seen in real life.
I moved to SF in 2008, and it was the most magical place on the planet. I met amazing people everywhere I went... smart, interesting people who just wanted to make cool things. I loved every second of it.
And it's still that way to me. And I say this as a person who's been to my share of fancy VC parties. Sure, things have changed a bit, but the greedy, out of touch caricature of SF I see online doesn't match what I see in person.
Even during the past 72 hours, I got dozens of texts and emails from people checking to see if my company was okay and asking if they could help. Everyone I know is genuine, hard-working, passionate, curious and kindhearted.
It's become clear the pervasive impression is that people in SV are rich, out of touch and barely work. Maybe that's true and I just don't know that version of SV. But I think the Musks of the world have won the perception game, and we're all going down with them.
Re: Ask HN: Has your view of Silicon Valley changed in the last 72 hours?
#60Earlier quoted context omitted.
Go back to 2021 before rates go up and tell me what you’d do. Kinda damned either way. The bank had to make profit to survive btw. They dont pay for their services on good will.
Most other banks found ways to survive the environment in 2021. So clearly there are ways to do it without locking money up for 10 years in MBS.
Most other banks didn't see the incredible growth SVB did, either.