Earlier quoted context omitted.
A variant of Thatcher's "Being powerful is like being a lady, if you have to tell people you are, you aren't".
Or Tywin Lannister's "Any man who must say, 'I am the King', is no true king."
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Bank run on Silicon Valley Bank
691–700 of 889 posts
Re: Bank run on Silicon Valley Bank
#692Earlier quoted context omitted.
Citation needed. Also, I’m all ears for a viable replacement that doesn’t devolve into autocracy or government-endorsed corruption, and still allows for taking risk and forward progress.
https://en.wikipedia.org/wiki/Great_Depression https://en.wikipedia.org/wiki/Great_Recession Here's some citation for ya. As for viable replacements that allow for forward progress: https://en.wikipedia.org/wiki/Workers%27_self-management (Also, for that matter, it's not like capitalism doesn't tend to devolve into autocracy and corruption)
Every single man-made institution devolves into corruption. Capitalism isn't the outlier here.
Re: Bank run on Silicon Valley Bank
#693From https://techcrunch.com/2023/03/09/silicon-valley-banks-share... : Becker said the bank has “ample liquidity” to support its clients “with one exception: If everybody is telling each other that SVB is in trouble, that will be a challenge.” Pro tip: if you're CEO of a bank that's facing a bank run, don't tell the press that you'll be in trouble if everybody takes their money out.
i wonder if this is the accidental downside we have to pay for the incredible speed of information these days. not just information in the sense of journalistic report, but also information in the sense of acknowledging and processing transactions. the older i began the more i come to be wary of speed, just for the sake of it (i'm looking at all of you performance engineers). latency might as well be an extremely che…
Brb, I'm going to go start a bank run on TikTok
Re: Bank run on Silicon Valley Bank
#694Earlier quoted context omitted.
Honestly, I'm not an economist, even worse I was not a fully functioning and critical thinking adult before the Thatcher era, you could well be right but I find it really hard to believe. For example the UK has also had subsequent Conservative victories for the last 12 years or so but every single argument made in 2010 about their approach has been proven true. To the detriment of every person in the UK. So it doesn'…
I can't argue with you on the recent Conservative track record, they're a pale shadow of the party they once were. The only thing that's saved them is that Labour under Corbyn was plainly, obviously such an utter catastrophe in the making the Cons couldn't help looking good. There certainly was an aspect of that back in the 80s. In the early years Labour was lead by Michael Foot, basically a likeable version of Corby…
>"The conservative and republican parties are mocking parodies of their former selves. Back in the 80s there were serious, major economic and social problems that desperately needed fixing and economic liberalism had the answers. Nowadays that's just not even vaguely controversial, instead the focus of the right has shifted towards damaging reactionary dog whistle issues like culture wars and blind nationalism. "
The conservatives of the 80's had a problem to solve, stagflation, inefficient socialism, big state. Neo-liberalism solved those problems, but created new ones.
The conservatives today have another problem to solve, mass immigration, rampant crime, loss of sovereignty and ability to reform to foreign bureaucracy, dependency on foreign manufacturing, etc.
Part of these problems are residues of the same economic neo-liberalism that was enacted in the 80s. Reagans and Thatcher's neo-liberalism saved society from the socialist dystopia, but over time it has thrown society in a neo-liberalist dystopian path that few people like, beside the corporate elites.
The conservatives have moved on to new, real problems. You seem stuck in the past.
Re: Bank run on Silicon Valley Bank
#695Earlier quoted context omitted.
I understand that a C corp is its own legal entity, but from a risk management perspective, the bank’s approach makes perfect sense.
How? I'm no banker, but to me their financial picture reads: married couple, both currently have nice salary working at companies X and Y, together have proven ability to raise millions in capital. I would say yes please take our refi loan, and do come back if you need anything else.
Why would a proven ability to raise millions in business capital (and, apparently, to subsequently hemorrhage it) make someone a better credit risk for their home mortgage?
Their financial history includes borrowing lots of money, taking a big risk, and losing a lot of that money. Not necessarily bad, but it’s reality. Just because that activity happened under a different legal entity doesn’t make it irrelevant. The mortgage applicants own nearly all of the company that is losing tons of cash. It is an important part of their financial history.
Re: Bank run on Silicon Valley Bank
#696Just to be clear for everyone: banks don't keep 100% deposits in a big vault, where a full-customer-withdrawal can and should be expected and permitted. Banks even at their simplest "Main Street local level", need to keep, say, 15% or 20% of their deposited funds available, as determined centrally e.g. the Fed or the Bank of England. The rest by design is to be lent out, that's how banks offer loans, mortgages etc. S…
> The rest by design is to be lent out, that's how banks offer loans, mortgages etc.
When banks lend out money, they don't lend out existing deposits, they create new (debt-based) money from nothing and this new money is fractionally backed by deposits.
With 10% fractional reserves, if they have $100 in deposits, they can lend out $1000, thereby creating $900 of new money from nothing.
Re: Bank run on Silicon Valley Bank
#697Earlier quoted context omitted.
Matt Levine is fond of this highly relevant quote by Bagehot: “Every banker knows that if he has to prove that he is worthy of credit, however good may be his arguments, in fact his credit is gone.” It seems that CEOs of banks haven't learned anything since 1873 when this was observed.
> It seems that PARTICULAR CEOs of banks haven't learned anything since 1873 when this was observed. I Don't think you can make that call for all CEO's of Banks 1873.
#notallceos!Re: Bank run on Silicon Valley Bank
#698Earlier quoted context omitted.
UK before Tatcher was a depressed society with stagflation, rising crimes, crumbling infrastructure; that couldn't even clean its own streets. It was a society completely hamstrung by old unions that would happily collapse the economy in face of global competition, as long as their jobs gave the same pay - nominally. Thatcher won two landslide re-elections for a reason.
UK in 2023 is a depressed society with stagflation, rising crimes, crumbling infrastructure
It is, and neither more neo-liberalism nor socialism is the answer.
Re: Bank run on Silicon Valley Bank
#699Earlier quoted context omitted.
Perhaps I'm overly skeptical, but everyone should know that all banks have the risk of 'if everyone takes their money out, the bank won't be able to make it work', right?
Everyone doesn't need to know or care in many cases. The FDIC insures deposits up to $250k. That covers the vast majority of accounts at most banks. So a run won't occur at most banks. There were hardly any runs in 2008 for this reason - the relatively few "run type things" which happened were where big interbank exposures existed. SVB's customers are weighted significantly more towards businesses who will have more…
I'd be interested to learn how that insurance fund actually works. Is there a big stockpile of cash somewhere or is that invested in (gulp) "super-safe bonds"?
Re: Bank run on Silicon Valley Bank
#700Earlier quoted context omitted.
UK before Tatcher was a depressed society with stagflation, rising crimes, crumbling infrastructure; that couldn't even clean its own streets. It was a society completely hamstrung by old unions that would happily collapse the economy in face of global competition, as long as their jobs gave the same pay - nominally. Thatcher won two landslide re-elections for a reason.
> Thatcher won two landslide re-elections for a reason. Arguably the reason was the war, not domestic policy [0] [0] https://history.com/news/margaret-thatcher-falklands-war
Nothing in that article indicates that the war overshadowed her domestic policy, both contributed to her success.