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Urgent: Sign the petition now

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Re: Urgent: Sign the petition now

#851

Post by youngtaff »

dlubarov wrote: post #727
lolinder wrote: post #411

Earlier quoted context omitted.

My parent wasn't talking about shuffling money around, they were talking about reading the bank's balance sheet. $1k gets you several hours of an accountant's time to go through the bank's balance sheet and tell you if their interest rates and other perks are, in fact, too good to be true. If you want to go the extra mile and try to move money around to keep under the limits, more power to you, but paying someone to…

How could my accountant have known the risks? I don't think there was any public information about SVB's poorly-timed MBS purchases, the main cause of this incident.

AFAIK it was in SVBk’s Nov 7th public filings

Re: Urgent: Sign the petition now

#852

Post by JohnFen »

dehrmann wrote: post #734
JohnFen wrote: post #677

Earlier quoted context omitted.

> I have no idea why this idea is suddenly so unpopular. It's not suddenly unpopular. It's never been popular to ask people to rescue businesses just because the lost a bet. > it's clearly way too low for businesses. Right, but businesses have a number of ways to limit their risk that individuals don't have. FDIC is not the only protection available, it's just the one that doesn't cost you anything.

> It's never been popular to ask people to rescue businesses just because the lost a bet. No one's asking for SVB or shareholders to be bailed out, they're asking for depositors to be bailed out. When you put money in the bank, you don't think of it as "making a bet."

> When you put money in the bank, you don't think of it as "making a bet."

Up to the limits of your insurance, you're not. (Well, even then you technically are, but it's as close to a sure thing as you'll get). Beyond that, though, you are, always have been, and always will be. There is no risk-free place to park a bunch of money. Not even under your mattress. That's why you always need to be thinking about risk mitigation. Not just with money, by the way, but with everything your business does.

If you're beyond the $250k, you should be fully aware that you're making a bet. There's literally signs inside of every bank telling you that.

Re: Urgent: Sign the petition now

#853

Post by JohnFen »

simonw wrote: post #713
JohnFen wrote: post #674

Earlier quoted context omitted.

> When you're a startup founder, you have to focus your efforts on the unique problem you are trying to solve. When you're a founder, the unique problem that needs to be foremost in your mind is the business. You don't make business decisions based on "this is what everyone around me is doing". If you don't have the time, talent, or energy to get into the minutia of running the business, you do at least hire good peo…

> Is that really a common approach in SV startup culture? Yes, absolutely. As a founder, especially at the start of your company, you're responsible for _everything_. You need to figure out how to do product roadmap planning, and sales, and marketing, and hiring, and HR, and run payroll, and work with investors, and manage an office... anything that can help shortcut a decision that isn't fundamental to the unique op…

> As a founder, especially at the start of your company, you're responsible for _everything_.

I know, I've been a founder more than once. You are responsible for everything. When it comes to the things you don't have expertise in, or don't have the time for, you need to bring in people who do. I wouldn't even begin to entertain the thought of starting a business without having an accountant and attorney at least on retainer.

> you need to get one setup RIGHT NOW because you just landed your first investment check and you need somewhere to put it!

Those checks don't come without you knowing they're coming, though. Surely you'd have already have made a plan for what you're going to do with them.

> We went to the Mountain View branch of Silicon Valley Bank because someone told us that they would know what to do with us.

You had no actual experts to consult about this?

Re: Urgent: Sign the petition now

#854

Post by JohnFen »

AlchemistCamp wrote: post #739
JohnFen wrote: post #646

Earlier quoted context omitted.

> then kickstarter imploded after taking on extreme financial risks, then I should bail out all the new customers of kickstarter who paid and didn’t get their games But what you're saying is the same thing: that taxpayers (random third parties who weren't even working in their ecosystem) should take the hit instead.

Addressing systemic risks that individual actors aren’t well incentivized to handle is part of what governments and taxes are for. The $250k of FDIC insurance per bank customer exists because otherwise incentives drive bank runs even for banks with broad consumer bases. Spending taxes on preventing financial meltdowns from cascading actually makes the government and its citizens wealthier than not doing so.

But we're talking about businesses here. They are certainly well-incentivized to properly handle the money in these amounts. The risk of losing it (and potentially the business) sounds like excellent incentive.

Re: Urgent: Sign the petition now

#855

Post by dlubarov »

youngtaff wrote: post #851
dlubarov wrote: post #727

Earlier quoted context omitted.

How could my accountant have known the risks? I don't think there was any public information about SVB's poorly-timed MBS purchases, the main cause of this incident.

AFAIK it was in SVBk’s Nov 7th public filings

I don't think their MBS positions were public until last week. But say we knew earlier, perhaps soon after they purchased the MBSs - wouldn't the result have been similar, just the bank run would have been shifted up a bit?

I.e. having a CFO who's on top of things might mean I'm first in line to get out once there are public red flags, but not everyone can exit an insolvent bank, so the macro result seems similar.

Re: Urgent: Sign the petition now

#856

Post by youngtaff »

dlubarov wrote: post #855
youngtaff wrote: post #851

Earlier quoted context omitted.

AFAIK it was in SVBk’s Nov 7th public filings

I don't think their MBS positions were public until last week. But say we knew earlier, perhaps soon after they purchased the MBSs - wouldn't the result have been similar, just the bank run would have been shifted up a bit? I.e. having a CFO who's on top of things might mean I'm first in line to get out once there are public red flags, but not everyone can exit an insolvent bank, so the macro result seems similar.

> It’s true that investors had been aware at the latest since its 10-Q filing on Nov. 7 that it had sustained unrealized losses among its held-to-maturity (HTM) portfolio large enough to wipe out its entire $15.8 billion in shareholder equity. While this would theoretically render it insolvent were they to materialize in full, SVB Financial was dismissive of the risks.

"SVB collapse highlights $620 billion hole lurking in banks’ balance sheets" -https://archive.is/qnwYh

Also short sellers worked it out a while back

"A Silicon Valley Bank short seller explains how he knew the bank was in trouble months ago" - https://archive.is/XaKkt

Re: Urgent: Sign the petition now

#857

Post by dlubarov »

youngtaff wrote: post #856
dlubarov wrote: post #855

Earlier quoted context omitted.

I don't think their MBS positions were public until last week. But say we knew earlier, perhaps soon after they purchased the MBSs - wouldn't the result have been similar, just the bank run would have been shifted up a bit? I.e. having a CFO who's on top of things might mean I'm first in line to get out once there are public red flags, but not everyone can exit an insolvent bank, so the macro result seems similar.

> It’s true that investors had been aware at the latest since its 10-Q filing on Nov. 7 that it had sustained unrealized losses among its held-to-maturity (HTM) portfolio large enough to wipe out its entire $15.8 billion in shareholder equity. While this would theoretically render it insolvent were they to materialize in full, SVB Financial was dismissive of the risks. "SVB collapse highlights $620 billion hole lurki…

I stand corrected, though the point remains that if everyone tried to exit once that news came out on Nov 7, we still would have had a bank failure with roughly the same shortfall.

Re: Urgent: Sign the petition now

#858

Post by youngtaff »

dlubarov wrote: post #857
youngtaff wrote: post #856

Earlier quoted context omitted.

> It’s true that investors had been aware at the latest since its 10-Q filing on Nov. 7 that it had sustained unrealized losses among its held-to-maturity (HTM) portfolio large enough to wipe out its entire $15.8 billion in shareholder equity. While this would theoretically render it insolvent were they to materialize in full, SVB Financial was dismissive of the risks. "SVB collapse highlights $620 billion hole lurki…

I stand corrected, though the point remains that if everyone tried to exit once that news came out on Nov 7, we still would have had a bank failure with roughly the same shortfall.

> though the point remains that if everyone tried to exit once that news came out on Nov 7, we still would have had a bank failure with roughly the same shortfall.

True, we’d need to look at previous filings to understand when it could have first been worked out

VCs should have kept a closer eye on where their cash was, but perhaps they were too enamoured with the benefits they were getting from SVB

Re: Urgent: Sign the petition now

#859

Post by mtlmtlmtlmtl »

corbulo wrote: post #699
skwirl wrote: post #679

Earlier quoted context omitted.

The bank is already shut down, dead, gone, past tense. It's shareholders are wiped out, as they should be. Nobody is calling to save a bank that doesn't exist anymore. We're talking about the depositors. I think this has been confusing to a lot of people.

you're calling for the state to insure 100% of all deposits?

Only when the depositors have lobbyists on their payroll ;)

Re: Urgent: Sign the petition now

#860

Post by DennisP »

IncRnd wrote: post #845
DennisP wrote: post #835

Earlier quoted context omitted.

Unless you have a link for these depositor bonds, I'll remain skeptical since they weren't mentioned in your previous link, google produces nothing obvious and DIF isn't at all what you'd claimed.

You want me to google for you? You don't seem serious. Here you go anyway with 5 out of the top 6 links on the first page from Google.com. Hopefully, these links will help someone who is looking for information on how to secure their bank account. The normal method for this insurance is to call an insurance company and ask for excess deposit insurance. This should be your first step. But, it seems very strange to me…

No, I can't call up my insurance company to get depositor bonds. From [2]: "Depositor bonds allow banks to offer deposit protection in excess of Federal Deposit Insurance Corporation (FDIC) insurance coverage to its most valued customers."

The other links say similar things. This is something banks can buy, to provide extra coverage for their customers.

People here have been arguing that SVB's customers were negligent by not purchasing their own third-party insurance. I think it's reasonable to ask them to support that argument, even if I'm not personally in the market. Supplemental insurance like that still does not appear to be available.

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