271–280 of 311 posts
SVB used an exemption from Basel III, which allowed it to run a riskier business, and eventually led to its implosion. Basel III was introduced to force banks to be more conservative, and thus more safe. Downside: this also means bank is going to be less profitable. European banks were forced to implement Basel III, while the US bankers managed to lobby a loophole for certain types of banks. And sure enough, SVB leve…
https://archive.is/Fx1is
I disagree with the overall learning from SVB’s collapse. Bonds are safe. The learning, to me, is that keeping interest rates at zero for too long distorts expectations in an unsafe way. What did SVB do wrong, exactly? They took in a lot of money, i.e. they ran a successful business. And they bought safe assets with that money. Who at the time would have disagreed with their strategy? The issue is that the Fed create…
Earlier quoted context omitted.
No, FDIC insurance applies to account owners, not accounts. Fun fact, if you're married, you can actually turn that into 3 * FDIC insurance limit. - Account 1: You - Account 2: Your spouse - Account 3: Jointly you and your spouse
Or you could hold short-term t-bills for any extra money over the FDIC insurance limit. Then you are good unless the US Gov goes bankrupt, which is a non-zero risk but much lower and different.
Earlier quoted context omitted.
Those numbers at the bottom of a cheque? Yeah, they include your account number. There's no inherent information risk to giving out an account number that justifies an outdated paper-based system. Especially when one considers the accompanying fraud risk thereof. The instant I moved to Europe, I realized just how far behind consumer banking is in the US. It's pitiful.
> Those numbers at the bottom of a cheque? Yeah, they include your account number. Yes, as well as the routing number. > There's no inherent information risk to giving out an account number … Of _course_ there is. In the US, the account + routing number is sufficient to perform a ACH transfer, write checks against that account, etc. The risk is enormous . > Especially when one considers the accompanying fraud risk th…
Not in Europe it's not, which is monodeldiablo's point: there's no inherent risk to giving out your account number. It's only the primitive US system which makes it a risk.
Earlier quoted context omitted.
Three modest notes about premium bonds. Firstly, you can cash in bonds at any time, so it's effectively an instant access account. Secondly, the current rate is 3.30%. Thirdly, the payouts are tax-free. 3.30% on an instant access account is actually pretty great (best i see elsewhere is 2.51%; i see a six month fixed term deposit at 3.28%), and getting it tax-free without having to have it in an ISA makes it even bet…
I might be misunderstanding what you wrote, but in the US, Wealthfront Cash is offering 4% APY, which is a bit higher than 3.3.
Earlier quoted context omitted.
I don’t understand the disgust I’m reading for VCs and startups. Bailing out the bank doesn’t mean we let the bank CEO get richer off this transaction (like we did in 2008). It means the startup companies making payroll are going to survive and continue building the future of technology and healthcare. What am I missing?
Hacker News has not been pro-startup and VC for a long time, probably at least for 10 years. It's now mostly tech workers who are not the capital class or are startup founders.
Is this going to end with similar results as 2018 by affecting the whole financial system? If yes I hope there will be no bailouts using public money and the financial system will start to be properly regulated and supervised.
SVB used an exemption from Basel III, which allowed it to run a riskier business, and eventually led to its implosion. Basel III was introduced to force banks to be more conservative, and thus more safe. Downside: this also means bank is going to be less profitable. European banks were forced to implement Basel III, while the US bankers managed to lobby a loophole for certain types of banks. And sure enough, SVB leve…
Earlier quoted context omitted.
I don’t understand the disgust I’m reading for VCs and startups. Bailing out the bank doesn’t mean we let the bank CEO get richer off this transaction (like we did in 2008). It means the startup companies making payroll are going to survive and continue building the future of technology and healthcare. What am I missing?
Hacker News has not been pro-startup and VC for a long time, probably at least for 10 years. It's now mostly tech workers who are not the capital class or are startup founders.
Dilution and share classes also are worse nowadays I believe.