181–190 of 322 posts
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The rules around breaking the buck were significantly changed after 08. Funds can suspend transactions instead now.
As if not letting people out is better than letting them out at a haircut. Need to maintain the illusion of safety I suppose.
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Very important distinction between money market funds and checking accounts is that they aren't FDIC insured.
True, true. But with a megacorp like Vanguard backing it, I'm personally not too concerned...
> “I disagree with the statement that these funds are protected by SIPC,” Stephen Harbeck, president and chief executive officer of SIPC How the hell did this product get launched?
In applying Hanlon's Razor[0], I think the conversation went: A: Are our customers accounts insured? B: Yes, through SIPC, which is like FDIC for brokerages. A: Great! Let's create this product. No more questions were asked. [0] http://catb.org/jargon/html/H/Hanlons-Razor.html
You just don't launch a financial product of this nature, out of your ass like that. If that was the case then Robinhood customers have legitimate reasons to be concerned about the safety of their funds and securities. (For the record, I'm on of those Robinhood customers).
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.
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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 historica…
IIRC, high interest rates are caused by an economic boom, as raising interest rates is caused by both an increase in demand for cash flows to finance investments and also as a monetary policy to put economic pressure to control inflation. Currently the world in general is very far from an economic boom, and central banks are actually implementing desperate monetary policies to jump start inflation. Thus, we are very…
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?
Also, Citizens Access at 2.25% is also pretty good.
both of those are FDIC insured.
Earlier quoted context omitted.
True, true. But with a megacorp like Vanguard backing it, I'm personally not too concerned...
Vanguard is not a corporation. It is structured as a mutual company; it is owned by funds managed by the company, and is therefore owned by its customers. See: https://en.wikipedia.org/wiki/The_Vanguard_Group
Regardless of its legal structure, I meant "megacorp" in the generic sense of "large company."
It is a large company.
Earlier quoted context omitted.
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 historica…
IIRC, high interest rates are caused by an economic boom, as raising interest rates is caused by both an increase in demand for cash flows to finance investments and also as a monetary policy to put economic pressure to control inflation. Currently the world in general is very far from an economic boom, and central banks are actually implementing desperate monetary policies to jump start inflation. Thus, we are very…
When you account for the investor cash that will subsidize this service as a loss leader offering, it’s not unreasonable.
The only risk is we enter a severe recession and the fed has to drop interest rates to 0 again. In that scenario, robinhood simply has to lower the rate of their offering as well. This isn’t some big existential risk.
> “I disagree with the statement that these funds are protected by SIPC,” Stephen Harbeck, president and chief executive officer of SIPC How the hell did this product get launched?
Earlier quoted context omitted.
AFAIK they haven't yet launched, it's not going to be until "early 2019". Not a defense of Robinhood, but their lack of (apparent) SIPC protections today do not necessarily imply they will be missing when they formally launch with actual customer deposits.
Yet it's being marketed as SIPC insured _today_.
No bueno.