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

#561

Post by tomato_123 » Mon, Mar 13, 2023, 1:20 AM UTC

bcantrill wrote: post #490

I have never seen such cognitive dissonance here at HN -- which I feel is really saying something! As an SVB customer who had to wire payroll on Tuesday, our perspective is naturally sharpened, but I found the lack of empathy here over the weekend galling. On the one hand, this is understandable, and Silicon Valley has done much to earn collective distrust. On the other hand, this is emphatically not all of us: many…

Empathy is completely irrelevant. You agreed to a particular financial contract, one that ended up being a mistake ex-post. Now you want to wind back the clock and pretend you agreed to a different contract, and leave other people on the hook for it.

"Well, if you want to see startups solving hard technical problems we need to have some real talk about how that has to be structured financially"

There are deep, functioning, financial markets. Private buyers were already making offers to buy uninsured deposits at a discount. The world wasn't going to implode. Equity holders and founders were going to take a haircut. That's fine, that's equity's job here. Don't try to get out of it when shit hits the fan.

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

#562

Post by [deleted] » Mon, Mar 13, 2023, 1:20 AM UTC

[deleted]

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

#563

Post by IAmGraydon » Mon, Mar 13, 2023, 1:20 AM UTC

The market is buying this up, failing to realize that things will continue to break as interest rates are increased further. The Fed isn't interested in saving banks. They're there to quell inflation.

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

#564

Post by tomato_123 » Mon, Mar 13, 2023, 1:21 AM UTC

LewisVerstappen wrote: post #235

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…

> prominent VCs behaved during the brief period of uncertainty A ton of the prominent VCs were writing out checks from their personal bank accounts so that founders could meet payroll. > For some silly reason I had some respect for the startup industry before this, now I see it as a joke Wait seriously? You somehow lost more faith from this than you did from - crypto - Adam Neumann - $100m seed rounds and like 30 oth…

"Equity is when you take risks, except for the risks you didn't anticipate"

Absurd take.

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

#565

Post by rvz » Mon, Mar 13, 2023, 1:21 AM UTC

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.

The regulators panicking and putting a tiny backstop of $25BN vs $150BN+ of uninsured deposits to attempt to stop a run on the bank is a resolution?

This is only to calm the markets before market open. We'll see if that enough to stop a bank run when this time everyone knows about the SVB situation and withdraws all their money at the same time.

Seems like this is an attempt to save the VC pyramid scheme that got caught up in the collapse and needed government intervention to 'save' them.

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

#566

Post by GreedClarifies » Mon, Mar 13, 2023, 1:22 AM UTC

This is unbelievable. SVB had services that others did not provide (in particular taking risky assets to secure loads or lines of credit). Those who partook in those services had to know that they made the bank more risky.

Who comes up with these kinds of policies? My god. The moral hazard is unreal.

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

#567

Post by FpUser » Mon, Mar 13, 2023, 1:22 AM UTC

tomato_123 wrote: post #553

FpUser wrote: post #538

Earlier quoted context omitted.

>"At the same time, this is yet another example of changing the rules in the middle of the game. Yellen has just broadcast that FDIC insurance is essentially unlimited, as long as you can threaten wider disruption to the economy." Rules exist to serve a purpose. If one risks fucking up the economy with the only goal that the rules are preserved - it could end up with pitchforks.

Not bailing out some VCs who hold equity in these depositor-companies would not fuck up the economy. Completely absurd and outrageous.

I was not talking about bailing out shareholder. Just the depositors.

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

#568

Post by hardstartuper » Mon, Mar 13, 2023, 1:23 AM UTC

$42B was withdrawn from SVB on Thursday. That's a lot of $$$ in one day. No wonder this collapsed. CRO/CEO should be held accountable, including their poor messaging that started this. So should anyone who was spreading the panic including some VCs and startups.

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

#569

Post by fullshark » Mon, Mar 13, 2023, 1:24 AM 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…

I will never forget, they revealed their true faces. All these CEOs also. It's a big game, words are just tools to manipulate others into doing what you want them to do, nothing more.

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

#570

Post by adharmad » Mon, Mar 13, 2023, 1:24 AM UTC

insane_dreamer wrote: post #560

It's the right move. If they didn't do it, every regional bank, especially those that primarily deal with businesses (which are likely to have more than $250K in deposits), would be at risk, since the expectation is that your "money is safe in the bank" is what allows the banking system as it is to exist.

None of the other regional banks had the investment risk profile or the depositor distribution (number of individual investors, SMBs, startups) of SVB.