Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

SVB shows that there are few libertarians in a financial foxhole

ft.com

Post reply on HN
Print view View original

441–450 of 493 posts

Re: SVB shows that there are few libertarians in a financial foxhole

#441

Post by vxNsr »

braingenious wrote: post #359
vxNsr wrote: post #319

Earlier quoted context omitted.

Cool, now do socialism. Anything in the extreme is bad. Can any system work if everyone acts perfectly rationally and and the same time with full empathy? Sure, but such people in reality are few and far between so instead we need to account for the edge cases of which there are many. And as any good software engineer knows you end up spending 80% of your time chasing down the last 1% of your edge cases.

>Cool, now do socialism. I didn’t “do” libertarianism? I recommended a book that I found interesting that’s related to the topic of the article that this discussion thread is in response to. Socialism has been brought up a couple times in response to my book recommendation and I’m a little confused by that. Is the assumption that the reporter that spent years meticulously researching, interviewing, and documenting th…

I didn’t reply to you so I’m not sure why you’re victimizing yourself here.

I will say every time I’ve engaged someone here who got defensive about not being a socialist, even when I never implied they were, usually turned out to have heavy sympathy for socialist and communist ideals. To the point where it would be inappropriate to call them anything but a socialist.

Again, I never engaged with you at all in this conversation you inserted yourself into a conversation and got upset about something that had little to do with you.

Re: SVB shows that there are few libertarians in a financial foxhole

#442

Post by vxNsr »

mtlmtlmtlmtl wrote: post #355
vxNsr wrote: post #319

Earlier quoted context omitted.

Cool, now do socialism. Anything in the extreme is bad. Can any system work if everyone acts perfectly rationally and and the same time with full empathy? Sure, but such people in reality are few and far between so instead we need to account for the edge cases of which there are many. And as any good software engineer knows you end up spending 80% of your time chasing down the last 1% of your edge cases.

Socialism is not a great ideology if it's applied indiscriminately, but at least it has useful real world applications in some areas. Libertarianism on the other hand is hardly even an ideology, but based on the ill-conceived notion that if we purposely make no collective effort to have a better society, it will somehow magically fall into place for us. If libertarianism was a software project methodology, it would b…

> Socialism is not a great ideology if it's applied indiscriminately, but at least it has useful real world applications in some areas.

This is literally what I said and is also true for libertarianism, your false analogy notwithstanding.

Re: SVB shows that there are few libertarians in a financial foxhole

#443

Post by gdy »

actually_a_dog wrote: post #391
gdy wrote: post #374

Earlier quoted context omitted.

When I cared about stability I picked a big employer from which one would expect prudency. When I worked at a small company, I expected it to get ruined at any moment and planned accordingly. Since I became self-employed, I care a great deal about which bank I use and never put all eggs in one basket. As I said: maybe they should.

But, you didn't actually ask. And that is literally my point. I care about stability in my employment situation as much as the next canine. I've worked at 4 startups, each with under 150 employees apiece. I've asked questions about funding, client base, growth plans, etc. All the normal "hard" questions you have to ask as a prospective startup employee. Not once have I ever asked where they banked. Not once has anyon…

I understand, but my point is that most people don't need it -- they either use proxy for that or already accept startup-level risks. So bankruptcy of a startup due to poor bank choice is just one of many failure modes for startups.

"we have bigger problems as a whole" I don't think so, at least based on Russia's experience. In the previous decade plenty of banks got closed with businesses losing money, but economy was ok and the banking ecosystem got healthier.

Re: SVB shows that there are few libertarians in a financial foxhole

#444

Post by nova22033 »

elzbardico wrote: post #11

The author ignores that behind the downfall of SVB was a climate of excess liquidity on the markets, a bonanza created by the authorities that made SVB see itself with a glut of funds. Now, SVB, loaded with money, could have tried loaning it like crazy, but instead, decided to go the conservative way and buy bonds. Someone could argue that they could have foreseen that this abundance of liquidity in the markets, alon…

>a bonanza created by the authorities

Are most people here too young to remember the Global Financial Crisis of 2008?

Re: SVB shows that there are few libertarians in a financial foxhole

#445

Post by mtlmtlmtlmtl »

dalmo3 wrote: post #433
mtlmtlmtlmtl wrote: post #376

Earlier quoted context omitted.

There is an increasing tendency to interpret these things in false dichotomies, I've found. If you criticise libertarians you must be a socialist and vice versa. I had a similarly frustrating encounter the other day, where my critique of the interaction between capitalism and democracy in the US was constantly construed as some sort of glorification of socialism, even when I never mentioned it. My patience for this t…

> But democracy sits above all these Does it? Isn't Earth's political system libertarian? The emerging conflict/cooperation between nation states is a market phenomenon. The UN is akin to a chamber of commerce. Democracy has, at most, continental reach (EU).

This is a far too reductive view of diplomatic relations to be taken seriously.

Re: SVB shows that there are few libertarians in a financial foxhole

#446

Post by mtlmtlmtlmtl »

vxNsr wrote: post #442
mtlmtlmtlmtl wrote: post #355

Earlier quoted context omitted.

Socialism is not a great ideology if it's applied indiscriminately, but at least it has useful real world applications in some areas. Libertarianism on the other hand is hardly even an ideology, but based on the ill-conceived notion that if we purposely make no collective effort to have a better society, it will somehow magically fall into place for us. If libertarianism was a software project methodology, it would b…

> Socialism is not a great ideology if it's applied indiscriminately, but at least it has useful real world applications in some areas. This is literally what I said and is also true for libertarianism, your false analogy notwithstanding.

It is not true for libertarianism simply because it is far too enamoured with the Smithian ideal of the self-interested rational actor. While this has been a useful model in economics, it is not an actual description of the world, which economics has had to come to terms with as a field. That's why libertarian ideals only makes sense in fantasy land and don't map onto the world. Most people are not acting only in self interest.

Re: SVB shows that there are few libertarians in a financial foxhole

#447

Post by shapefrog »

fnordpiglet wrote: post #36
sdfghswe wrote: post #24

Earlier quoted context omitted.

> But in the end, even if we could argue that SVB should have been more prescient, it is clear that the root cause of the problems is the actions of the government and the FED. No. SVB hid market to market losses by saying "these securities are held to maturity so I don't have to realize losses". THAT is the source of the problem. Not all banks did this. Sure excess liquidity was necessary for this behavior to be pos…

I don’t understand. If you hold a bond to maturity you get it’s NPV. Valuing it at NPV vs mark to market has more to do with your plan than any sort of fundamental truth - they’re both legitimate ways of valuing it. The mark to market only comes relevant if you’re experiencing a run, which they were holding sufficient regulatory liquidity for. They should have hedged their rates risk a bit better, especially as infla…

Valuing it at NPV == Valuing it at mark to market

Re: SVB shows that there are few libertarians in a financial foxhole

#448

Post by pas »

epistasis wrote: post #327
david927 wrote: post #297

Earlier quoted context omitted.

> for no reason For reason. This is far from over.

The only thing we have to fear is fear itself! Bank runs are quite often a crisis of unreason, and I think this one is mostly caused by poor communication. The contagion effect is as much a mental virus as it is an assessment of liquidity.

It's kind of obvious from this that either deposits should be guaranteed by law (because in practice FDIC does that now anyway) or the law has to prohibit banks from investing deposits (unless the account holder instructs the banks to do so, of course).

Re: SVB shows that there are few libertarians in a financial foxhole

#450

Post by pas »

ETH_start wrote: post #410
refurb wrote: post #381

Earlier quoted context omitted.

Libertarianism isn't "no government". Sounds like a strawman?

The anti-libertarian arguments generally consist of these strawman caricatures, to avoid dealing with pretty much unassailable mainstream libertarian criticisms of major contemporary government policies, like socializing deposit losses with taxpayer-funded FDIC insurance, guaranteeing $1.5 trillion worth of mortgage backed securities every year through the GSEs, and bailing out banks that engage in high-risk lending…

The boring non-libertarian (political realist, non-radical) arguments about those are that doing the bailout is still better than the other possibilities. Also note that the bailouts tend to have positive financial returns to the government (because they get a lot of financial instruments at a very low cost, and then either sell them when they turn a profit or hold them to maturity, which again tend to be profitable because of low inflation in general).

Would it be better to change the current system so that the bailouts were unnecessary? Yes. And depending on the ideology of who you ask you get different wishlists.

Post reply on HN