Joint statement by the Department of the Treasury, Federal Reserve, and FDIC • Hacker News Board

Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

#321

Post by yibg » Sun, Mar 12, 2023, 11:18 PM UTC

fbdab103 wrote: post #246

323 wrote: post #135

All bank deposits should be guaranteed by the state. Just like tap water is guaranteed to be drinkable, ... Bank accounts are the basis of many things.

SVB was offering higher returns by taking on more risk than was required. Those customers now lost nothing. The rest of us who went with safer banks offering market rate returns not only received less over that duration, but we have to pickup their tab. Why should I or a bank ever do diligence again? I can just claim I misjudged the risk.

What risks were taken by SVB? From what I understood, all the investments were in very safe ones.

Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

#322

Post by lopkeny12ko » Sun, Mar 12, 2023, 11:20 PM UTC

version_five wrote: post #112

So they made their decision, everyone can move on. I just hope nobody forgets how prominent VCs behaved during the brief period of uncertainty. The idea of some noble class of investors championing disruption is dead. They're just a bunch of rent seekers like everybody else. For some silly reason I had some respect for the startup industry before this, now I see it as a joke. It's great at a personal level that "foun…

What did VCs do wrong here? They warned of impending solvency problems at SVB and told founders to withdraw their money ASAP. And indeed, the bank failed the next day. The companies in trouble are those who didn't listen to the VCs.

Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

#323

Post by hello_moto » Sun, Mar 12, 2023, 11:20 PM UTC

version_five wrote: post #112

So they made their decision, everyone can move on. I just hope nobody forgets how prominent VCs behaved during the brief period of uncertainty. The idea of some noble class of investors championing disruption is dead. They're just a bunch of rent seekers like everybody else. For some silly reason I had some respect for the startup industry before this, now I see it as a joke. It's great at a personal level that "foun…

> For some sily reason I had some respect for the startup industry before this, now I see it as a joke.

1. silly reason

2. It's a joke

It looks like you just found your silly reason.

The greed of startups have evolved to become bigger and bigger as years pass by.

The romanticizing of startups came from propaganda. It's just that some of us were too young and naive to understand the puppetmaster while others had seen the puppeteer before...

Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

#324

Post by KRAKRISMOTT » Sun, Mar 12, 2023, 11:20 PM UTC

ComplexSystems wrote: post #309

version_five wrote: post #112

So they made their decision, everyone can move on. I just hope nobody forgets how prominent VCs behaved during the brief period of uncertainty. The idea of some noble class of investors championing disruption is dead. They're just a bunch of rent seekers like everybody else. For some silly reason I had some respect for the startup industry before this, now I see it as a joke. It's great at a personal level that "foun…

> It's great at a personal level that "founders" and startup employees didn't have to do without. But it's important to remember that they no longer automatically deserve any credit for taking risks and doing something new. Mm hmm. Yes, after all is said and done, the main take away from this is that startup employees and founders no longer deserve credit for taking risks and doing something new. Glad our priorities…

The founders and employees deserve credit, the VCs not so much. They were the ones primarily driving the fearmongering.

Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

#325

Post by bradleyjg » Sun, Mar 12, 2023, 11:20 PM UTC

nafey wrote: post #302

bradleyjg wrote: post #160

So depositors at banks taking on big risks get elevated interest rates or other perks for years, and when the shit hits the fan depositors that put their money in prudent banks get to bail them out through higher fees. And people wonder why turnout is low. There’s no way to vote for non captured politicians.

But, crucially, the shareholders are wiped out. No CEO would be incentivized to repeat the SVB strategy if they stand to make no gains from it.

That’s not true at all. The strategy is this:

1) form a bank

2) make imprudent investments, and offer better terms than other banks

3) watch the deposits roll in

4) collect fat bonuses every year

5) fifteen years later, get taken over by the FDIC

6) no need to return bonuses

7) other banks want to hire executives from failed banks, go do it again somewhere else

Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

#326

Post by [deleted] » Sun, Mar 12, 2023, 11:21 PM UTC

tssva wrote: post #224

version_five wrote: post #112

So they made their decision, everyone can move on. I just hope nobody forgets how prominent VCs behaved during the brief period of uncertainty. The idea of some noble class of investors championing disruption is dead. They're just a bunch of rent seekers like everybody else. For some silly reason I had some respect for the startup industry before this, now I see it as a joke. It's great at a personal level that "foun…

The thing I'm most confused about in this comment is that you ever believed that VC's and startups were some kind of noble class.

[deleted]

Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

#327

Post by threeseed » Sun, Mar 12, 2023, 11:21 PM UTC

tssva wrote: post #224

version_five wrote: post #112

So they made their decision, everyone can move on. I just hope nobody forgets how prominent VCs behaved during the brief period of uncertainty. The idea of some noble class of investors championing disruption is dead. They're just a bunch of rent seekers like everybody else. For some silly reason I had some respect for the startup industry before this, now I see it as a joke. It's great at a personal level that "foun…

The thing I'm most confused about in this comment is that you ever believed that VC's and startups were some kind of noble class.

I believed that VCs and startups were mostly good people trying to do the right thing.

But what we've seen in the last few days is utterly despicable behaviour by many of the leading figures driven solely by greed and self-interest.

I think increasingly startups will look to bootstrap in the coming years.

Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

#328

Post by astrange » Sun, Mar 12, 2023, 11:21 PM UTC

Uvix wrote: post #255

consumer451 wrote: post #84

Earlier quoted context omitted.

As mentioned in other threads here, Germany and the UK have operated like this in the past as well. If it's not a loss to the tax payers, then it seems like good governance to me.

But it is a loss to taxpayers. Anybody with money in an unaffected bank will end up footing the bill.

Since SVB's deposits were solvent, there isn't an actual loss here as long as it encourages people to not withdraw money early. They collapsed because everyone asked for it too fast.

What would be expensive would be paying for everyone getting laid off after SVB depositors can't make payroll.

Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

#329

Post by [deleted] » Sun, Mar 12, 2023, 11:21 PM UTC

huhneverthot wrote: post #271

version_five wrote: post #112

So they made their decision, everyone can move on. I just hope nobody forgets how prominent VCs behaved during the brief period of uncertainty. The idea of some noble class of investors championing disruption is dead. They're just a bunch of rent seekers like everybody else. For some silly reason I had some respect for the startup industry before this, now I see it as a joke. It's great at a personal level that "foun…

Who would've thought post-hand-wringing-over-poor-300k-salary-tech-workers realizing their disposability that we would have another event reminding HN just how different the rules are for capital owners than the rest of us. Why is that tech workers, many of whom easily have earned over a million dollars in salary over the past few years can't be told to "live within their means"? Why is it that the same VCs that rall…

[deleted]

Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

#330

Post by PaulHoule » Sun, Mar 12, 2023, 11:21 PM UTC

cm2187 wrote: post #290

PaulHoule wrote: post #222

See... I told you this would be resolved quickly. Trouble is that Silicon Valley should have learned the lesson that dogpiling into the same bank is systemic risk.

Instead they learned that donating to the democratic party is a good insurance policy.

Yeah, Peter Thiel donates to the Republicans but he so quick on the draw he got his money out in time to not need a baiout.