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SVB shows that there are few libertarians in a financial foxhole

ft.com

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

#81

Post by doodlesdev »

cypherpunks01 wrote: post #26
colpabar wrote: post #5

Earlier quoted context omitted.

So I'm assuming that's a link posted on twitter that includes some flag that prevents the site from paywalling the article? Neat. I'll still post a humble archive link as well. https://archive.is/6MBEL

Yes, FT's article links posted on twitter have a cool behavior where it bypasses paywall if you enter through the right Referer (I assume) Garnered from https://twitter.com/FT/status/1635265357048082435 I like them for this, but I don't see a lot of other news outlets doing this. Most other places simply post links to their paywalled articles.

It's just Google Tag Manager, that's also why if you have JavaScript disabled or ClearURLs (or similar) it won't work as they won't be able to see the UTM tag.

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

#82

Post by ummonk »

Libertarians invested in FTX and other crypto banks. They haven't demanded government bail them out.

Businesses putting their deposits in reputable regulated banks is a different matter. Nothing libertarian about that. They're following standard practice as expected by the government and the government rightly decided to make them whole and maintain confidence in the system to ensure businesses would continue to engage in normal banking behavior as desired by the government instead of trying to adhere to 250k limits on deposit sizes.

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

#83

Post by psychlops »

tppiotrowski wrote: post #33
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…

I don't know much about finance and have never worked in banking but anyone more than 40 years old should know that fed rates can go into double digits. It's not like a black swan. It's happened before so I'm a bit surprised people are so shocked by the feds moves.

Not taking the side, but there is a strong belief that the fed can't raise rates much more as it needs to inflate away a large portion of debt to get the economy back on track. It's unlikely we will see a volcker economy halting maneuver anytime soon.

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

#84

Post by fnordpiglet »

fach wrote: post #69
fnordpiglet wrote: post #36

Earlier quoted context omitted.

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…

Aren’t the order of operations here incorrect? They were experiencing a lack of deposits due to VC pullback due to the interest rate rise, while depositors did not cut spending. This led to a liquidity crunch where they needed to sell discounted bonds to fill the gap. When the gap was conveyed to shareholders, the run began. If this is true, isn’t marking to market providing feedback about a potential liquidity crunc…

The “when the gap” bit is the piece that’s suspect to me. This isn’t an irregular occurrence in the world. The events are a little fishy to me because this isn’t crisis material. Banks go public precisely for the purpose of having access to additional liquidity in situations like this. The balance sheet hole was tiny compared to their assets.

Liquidity calculations for banks definitely include mark to market for HTM portfolios. But even then they were legally deemed sufficiently liquid. The run on the bank wasn’t expected or normal behavior.

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

#85

Post by Grimburger »

cypherpunks01 wrote: post #55
nemothekid wrote: post #19

Earlier quoted context omitted.

> commonly accepted phrase I can't find any source for the "no libertarians in a bank run" part before this weekend.

Probably transformed from this article: https://www.belfercenter.org/publication/no-atheists-foxhole... 2008 pub date

Which is incredibly strange because I remember libertarians screaming to the hills against bailouts back then. Plenty of people who weren't in that camp were against it too. The 2008 bailouts directly led to Occupy Wallstreet which was a big tent of political affiliations.

Satoshi Nakamoto released bitcoin with "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks" recorded in the first block which is clearly a political statement against them.

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

#86

Post by rufus_foreman »

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…

>> 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

From SVB's bio of President and CEO Greg Becker at https://www.svb.com/profile/greg-becker:

"He is a Class A Director for the Federal Reserve Bank of San Francisco"

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

#87

Post by _ktx2 »

yunwal wrote: post #78
kodah wrote: post #70

Earlier quoted context omitted.

To conflate political alignment with investor opportunism is astonishing.

Oh ok so they’re only libertarian when it benefits them financially. I actually don’t think anyone disagrees with that.

You should probably look at the link my guy. 13/20 of those definitely aren't Libertarians.

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

#88

Post by sdfghswe »

fnordpiglet wrote: post #72
sdfghswe wrote: post #50

Earlier quoted context omitted.

> 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. Correct. So, if you have customers and you put THEIR money into a bond and say you're holding it to maturity, but then your customers want their money, what exactly was the plan?

That’s literally the purpose of a bank my friend. Welcome, yes, the emperor has no clothes and never has.

No you didn't answer my question.

You made the case that how you value it depends on the plan. So what was the plan?

The answer, of course, was that these people didn't have a plan because they're incompetent, and that has nothing to do with the "purpose of a bank". It's just incompetence, nothing more.

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

#89

Post by ummonk »

yunwal wrote: post #64
_ktx2 wrote: post #31

Earlier quoted context omitted.

Other than Peter Thiel there's not a lot of Libertarians on this list: https://www.opensecrets.org/industries/contrib.php?cycle=202... This conjecture about Libertarians in tech is dated. Might've been true in the 90s, but the industry has been captured since then.

[flagged]

Nobody asked for bailouts to crypto banks / exchanges though.

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

#90

Post by convolvatron »

miguelazo wrote: post #62
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…

Putting aside the glut of misallocated cheap money, isn't the deregulation that allowed this (which SVB pushed for, along with many other banks/Wall Street parasites) precisely the type of policy that Libertarians advocate?

like always, the market is still insufficiently free to work its true magic. woulda been fine if the fed hadn't been screwing around and ruining things
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