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

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

#231

Post by therealdrag0 »

TeMPOraL wrote: post #138
ummonk wrote: post #94

Earlier quoted context omitted.

>If I buy a house in a neighbourhood that is zoned single family residential, Am I an "inefficient incumbent" because I expect that over the mid-to-long term it will stay that way? Yes, you are. You're trying to freeze your neighborhood in amber, which is most definitely a sign of an inefficient incumbent.

No, they just bought it with reasonable expectations - expectations, which were priced in the home valuation. If they didn't care about single family aspect, they probably could've found a cheaper house elsewhere. Also, let's not pretend that AirBnB is progress . It's just a third party that encourages people to start illegal hotels, to earn money for themselves at the expense of their neighbours. This is not a case…

Who's parasitizing? Airbnb has 38 million users. That's a ton of value being provided! Clearly people want options besides classical hotels. Just because some guests aren't respectful or something doesn't mean the service as a whole is bunk.

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

#232

Post by Animats »

Here's their very brief unaudited financial statement.[1] This makes no sense for a financial institution. How can their liabilities be so low? Anything on deposit with them is a liability for them. This seems to say "all your assets are belong to us."

[1] https://d2ue93q3u507c2.cloudfront.net/assets/robinhood/legal...

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

#234

Post by whatok »

all_blue_chucks wrote: post #228
whatok wrote: post #92

Earlier quoted context omitted.

This is extremely misleading and no one should be using bond funds as a checking/savings account replacement. You have mark to market and liquidity risk here which in normal circumstances you do not have with a savings/checking account. Additionally, Robinhood is reportedly investing proceeds in US Treasuries. US Treasuries have a completely different risk profile than corporate investment grade bonds.

> no one should be using bond funds as a checking/savings account replacement Literally all money market accounts are bond funds under the hood, actually.

Under the hood vs how they function in everyday situations are completely different things.

If I sock away $100 a month for the next 12 months to pay for something, which one is more likely to have >=$1200?

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

#235

Post by vamos_davai »

TeMPOraL wrote: post #105
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…

> AirBnB and Uber are both examples of companies that were huge wins for customers/consumers. And for its shareholders, so is a factory dumping heavy metals to the nearby river. And for its customers, so is a slave plantation. You judge businesses by the treatment of all participants of an economic activity, not just the ones giving and receiving money. Uber and AirBnB are examples of companies that shit on society a…

I don't think AirBnB nor Uber has caused any physical harm to the surrounding communities.

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

#236

Post by avar »

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…

> When it all went belly up those savers realized these Icelandic banks were not quite the same thing as UK banks and Iceland refused to make depositors whole.

That's a very inaccurate recalling of history which you can see from reading the intro to the relevant Wikipedia article[1] and a summary of the EFTA Court's decision on the matter[2].

The case centered around a dispute between mainly Britain, The Netherlands and Iceland about how to interpret certain EFTA regulations. Iceland's position ultimately prevailed in court.

1. https://en.wikipedia.org/wiki/Icesave_dispute

2. https://en.wikipedia.org/wiki/EFTA_Surveillance_Authority_v_...

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

#237

Post by avar »

gammateam wrote: post #146
tpm wrote: post #127

Earlier quoted context omitted.

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

This helps: https://upload.wikimedia.org/wikipedia/commons/3/3c/Supranat...

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

#238

Post by pascalxus »

fpgaminer wrote: post #178
pascalxus wrote: post #173

For those of you looking for a great place to park your money, try this one: www.mysavingsdirect.com it's now up to 2.4% for a online savings account, that is FDIC insured. i've been using them for 2 years now, and it's been awesome. As far as i know, 2.4% is the highest there is for online accounts. i'm surprised they don't top the list on nerdwallet.com

As general word of caution: is that extra fraction of interest worth the hassle/risk of dealing with a less known bank? What I mean is, banks like Ally offer both near-highest interest rates, are well established, and provide a nice experience. Your savings account is bread and butter in your financial life. Using some "janky" bank just to squeeze few dollars probably isn't a good use of your time. I'm not saying mys…

Well, if you're saving very aggressively to buy a house in the near future, it makes a lot of sense, especially in places where housing is extremely expensive.

Slow deposits and transfers are not a problem at all. You only need to transfer in or out maybe a few times per year at the very most.

i'm not sure what you mean with "janky"

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

#239

Post by bronson »

whatok wrote: post #234
all_blue_chucks wrote: post #228

Earlier quoted context omitted.

> no one should be using bond funds as a checking/savings account replacement Literally all money market accounts are bond funds under the hood, actually.

Under the hood vs how they function in everyday situations are completely different things. If I sock away $100 a month for the next 12 months to pay for something, which one is more likely to have >=$1200?

That depends on what you mean by "sock away".

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

#240

Post by pascalxus »

whitepoplar wrote: post #211
pascalxus wrote: post #173

For those of you looking for a great place to park your money, try this one: www.mysavingsdirect.com it's now up to 2.4% for a online savings account, that is FDIC insured. i've been using them for 2 years now, and it's been awesome. As far as i know, 2.4% is the highest there is for online accounts. i'm surprised they don't top the list on nerdwallet.com

Or you can open a Fidelity/Schwab account and buy U.S. Government T-Bills with no transaction costs or markup. 6-month T-Bills are currently yielding 2.54% and they're exempt from state taxes.

but how do those work. do you have to keep buying them every 6 months, or can you just leave it there while it keeps providing interest at that rate? and will those rates continue to go up?

mysavingsdirect has for the last 2 or 3 years shown they're commited to staying at the highest rates.

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