SIPC Says It Has Serious Concerns About Robinhood's New Product • Hacker News Board

Re: SIPC Says It Has Serious Concerns About Robinhood's New Product

#141

Post by pembrook » Fri, Dec 14, 2018, 5:45 PM UTC

binarymax wrote: post #65

hn_throwaway_99 wrote: post #13

Through all of this I can't help but be reminded of the 2008 financial crisis and think "this is not going to end well." One part of that crisis was Icelandic Banks making a huge push for savings all over the UK and other parts of Europe ("IceSave") with the promise of better interest rates. When it all went belly up those savers realized these Icelandic banks were not quite the same thing as UK banks and Iceland ref…

I remember (but cannot find a citation) in ~2005/6 AIG was offering 4% saving accounts. I'm having deja vu all over again.

That’s because interest rates were around that level at the time and the bank was also getting paid that much to hold your money. It wasn’t a conspiracy.

Consumer savings accounts had absolutely nothing to do with the crisis.

Like, on the list of “things that caused the crisis,” they would literally be dead last.

Did you know your parents had savings accounts that delivered 10% interest at one time? Look up historical interest rates in the US. 4% is like average.

Re: SIPC Says It Has Serious Concerns About Robinhood's New Product

#142

Post by rdlecler1 » Fri, Dec 14, 2018, 5:46 PM UTC

HN's value has really declined with the appearance of all the paywalls the last couple of years where there's no simple workaround. I've stopped clicking on WSJ, NYT, Bloomberg articles. Would be nice to just be able to filter them out of the view.

Re: SIPC Says It Has Serious Concerns About Robinhood's New Product

#143

Post by rootusrootus » Fri, Dec 14, 2018, 5:50 PM UTC

jahewson wrote: post #60

kinkrtyavimoodh wrote: post #38

Earlier quoted context omitted.

> bad idea about personal finance Such as?

Good advice: Normal folks should put their money in index funds - not individual stocks and certainly not options.

For anybody who isn't comfortable learning a small amount about diversification, index funds are probably the easiest way to guarantee an average return. Probably a good choice.

Still not a panacea, course. What was the ROI on the S&P 500 between, say, 1997 and 2009? Ouch. We've been on a beautiful bull run for the last decade, at least up until a month or so ago. I wonder what the next decade or two will look like.

Re: SIPC Says It Has Serious Concerns About Robinhood's New Product

#144

Post by Spooky23 » Fri, Dec 14, 2018, 5:51 PM UTC

binarymax wrote: post #65

hn_throwaway_99 wrote: post #13

Through all of this I can't help but be reminded of the 2008 financial crisis and think "this is not going to end well." One part of that crisis was Icelandic Banks making a huge push for savings all over the UK and other parts of Europe ("IceSave") with the promise of better interest rates. When it all went belly up those savers realized these Icelandic banks were not quite the same thing as UK banks and Iceland ref…

I remember (but cannot find a citation) in ~2005/6 AIG was offering 4% saving accounts. I'm having deja vu all over again.

That was a real bank. Historically savings accounts are in the 2.5-5 range.

Re: SIPC Says It Has Serious Concerns About Robinhood's New Product

#145

Post by brootstrap » Fri, Dec 14, 2018, 5:52 PM UTC

Apocryphon wrote: post #97

Let's talk about conventional alternatives to this. I've heard good things about Ally bank's 2% saving account. Does anyone here use anything comparable? How about credit unions?

opened up savings with ally a few months ago (september i think??) and dumped in a sum of ~10k saving for downpayment. Been easy so far, rate has bumped up to 2% and we've made like 50 bucks or so. Not too shabby compared to the negative thousands in my portfolio!

Re: SIPC Says It Has Serious Concerns About Robinhood's New Product

#146

Post by gammateam » Fri, Dec 14, 2018, 5:52 PM UTC

tpm wrote: post #127

xxpor wrote: post #110

Earlier quoted context omitted.

Edited: Iceland isn't a member of the EU, so my comment didn't make any sense.

Iceland is not a member of the EU

So confusing:

Iceland is in the Schengen Area, and the EEA, but not the EU or Eurozone

Re: SIPC Says It Has Serious Concerns About Robinhood's New Product

#147

Post by Rafuino » Fri, Dec 14, 2018, 5:53 PM UTC

"Move fast and break things" does not work in the heavily regulated worlds of healthcare (e.g. Theranos) and finance (now Robinhood). FB and GOOG have massive lobbying operations for this very reason, as they don't want advertising to become like finance and healthcare.

Re: SIPC Says It Has Serious Concerns About Robinhood's New Product

#148

Post by [deleted] » Fri, Dec 14, 2018, 5:54 PM UTC

stilky wrote: post #135

mrfredward wrote: post #35

Earlier quoted context omitted.

I did some quick research. Discover has a money market account for 1.9% APR that is FDIC insured and has a debit card. Money market accounts have been around a while. Is Robinhood's account different because they are subsidizing it to hit 3% APR?

Difference is the FDIC insurance, mainly. Being member FDIC means that you have to go through a ton of regulatory requirements to be sure that you're financially stable. A bank can offer whatever interest it wants on its account if it manages to stay in compliance. If Robinhood were to become member FDIC and offer 3% I imagine there'd be no qualms about it. SIPC on the other hand is more relaxed because it covers les…

[deleted]

Re: SIPC Says It Has Serious Concerns About Robinhood's New Product

#149

Post by disishhsha » Fri, Dec 14, 2018, 5:54 PM UTC

ocdtrekkie wrote: post #51

wallawe wrote: post #31

Earlier quoted context omitted.

AirBnB and Uber are both examples of companies that were huge wins for customers/consumers. Just because they flout regulations which are often times outdated and unnecessary (re: protecting inefficient incumbents) doesn't mean they aren't doing what's good for the consumer. I agree though that Robinhood is a different story with potentially harmful consequences for unsophisticated investors looking for a safe/easy i…

The people sexually assaulted, discriminated against because of their skin color or sexuality, and those recorded in their beds without their consent would all presumably disagree that Uber and AirBnB flouting regulations made for huge wins for customers/consumers. EDIT: The fact that these crimes "have happened at hotels/in taxis as well" ignores the fact that they are far more likely in an environment where regulat…

Have you ever talked to a member of a racial minority about discrimination by taxis vs. Uber? Everything I’ve heard is that it’s difficult for a black man to get a cab, and easy to get an Uber.

With a centralized platform, people selling rides or lodging actually get recorded when they reject people, which makes it possible to pursue them for discrimination.

Re: SIPC Says It Has Serious Concerns About Robinhood's New Product

#150

Post by Androider » Fri, Dec 14, 2018, 5:55 PM UTC

tomnipotent wrote: post #106

eclipticplane wrote: post #85

Earlier quoted context omitted.

Push notifications around a pre-defined 'watch list'? Notifications of major stock movements? Showing 'popularity' of a stock? 'Most Popular Under $25'? Gifting people free stock for referrals?

I had a good laugh at this. I expect a certain level of professionalism from financial businesses, and this sort of fluff marketing / gamification makes my skin crawl... mostly because it tells you about the rest of the maturity of the organization if the product and marketing team is sending out this kind of amateur crap.

You've got it backwards. The output of the product and marketing team is expertly tailored to target the amateur. Don't for a second think they don't know exactly what they're doing.