If this represented a systemic risk, I will eat my hat. This reeks of influence peddling, particularly given the significant growth in lobbying over the past two decades by the very kinds of people invested here.
Joint statement by the Department of the Treasury, Federal Reserve, and FDIC
341–350 of 1001 posts
Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC
#342So 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…
They might as well be FAANG employees if they're so risk averse that they can't deal with such casual occurrences as their dang banks failing.
Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC
#343[deleted]
Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC
#344So 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…
Why should they not get credit for taking risks or doing something new? How is that related at all? The risks they take are based on the viability of their product. It was never (supposed to be) based on the risk of if their banking institution could provide them with their cash as needed. None of that has changed.
Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC
#345So 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.
Most people that I have come across who are not experienced in tech startups seem to have some kind of holy image of VCs. They seem to think they're all "rich and successful". They think it is some kind of highly esteemed job to possess. Contrastingly, people who have been in the startup game for years know that VCs are just salespeople, and a great majority of them lose other peoples' money while just raking in a normal salary.
Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC
#346Earlier quoted context omitted.
Does this statement reflect any shift in policy? Haven’t depositors always been first on the list to get paid, even their uninsured deposits? I don’t know if charging a special assessment to member banks is standard operating procedure, but that doesn’t sound like government intervention. It just sounds like reasonable operation of the FDIC.
Not sure how "taxing depositors at other banks to pay for uninsured deposits" is "reasonable operation of the FDIC". (And yes, it's taxing the depositors. Because even if it's "officially" a fee to the other banks, it will be trickled down to their customers through lower interest rates and higher fees rather than absorbed.) If this was necessary to recover insured deposits, that would be reasonable. But instead, the…
They invoked this exception repeatedly during the financial crisis and fees did not go up in response. In fact, they all but disappeared.
Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC
#347So 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…
An equally silly error would be concluding that all VCs are like this. Although we heard absolutely unhinged and insane panic from a few (like Jason Calacanis), and some milquetoast statements from others (Redpoint), we heard no panic from the largest players.
I won't reshare anecdotes here, but I heard stories over the weekend about intense and direct conversations between the largest VCs and the Fed.
Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC
#348so all other bank customers (who are taxpayers also) will pay indirectly through higher FDIC insurance rates/commissions, right ?
Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC
#349So 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…
I don't understand this comment. 1) SVB was not managed by VC's. 2) SVB went under because they bought US Treasuries, not because they took risky bets on startups.
My understanding is that it was in fact both:
1. If they had more short dated treasuries, they could have used them to fund drawdowns, and would not have had to sell their long dated treasuries, that went underwater as interest rates rise.
2. If they had not been overly exposed to one sector, a sector that largely existed due to 'free money' of zero interest rates, then large scale draw downs would not have happened as interest rates rise.
Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC
#350So 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.
Think of it a different way. Wells Fargo/BoA are "too big to fail" institutions in the United States. They got significant back hand, handshake deals, from Washington institutions to not only stay afloat, but for hundreds of little issues. In essence, the FDIC is a well crafted "redistribution," of all the under the table benefits Wells/BoA get from lobbying the Feds, to the smaller banks. The US has a deep interest…
BoA was never at risk of failing. They stepped in to buy Merrill Lynch because basically the treasury ordered them to, but they didn't need TARP to absorb the continued losses in that unit, and paid it back with interest as soon as they were allowed to.