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America's pensions can't beat Vanguard but they can close a hospital

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Re: America's pensions can't beat Vanguard but they can close a hospital

#91

Post by bondarchuk »

AnimalMuppet wrote: post #66
bondarchuk wrote: post #49

Earlier quoted context omitted.

The student loan system is fucked up, so what should happen is an acknowledgement that it's fucked up, forgiving the fucked up loans, and also changing the system to be less fucked up so it won't have to happen again.

A reasonable option. But was that on the table? Or was "just student loan forgiveness with no change to the system" what was being proposed? And if that was the proposal, would that be better or worse than the current status quo?

Everything is on the table if people vote for it.

Re: America's pensions can't beat Vanguard but they can close a hospital

#92

Post by sejje »

epistasis wrote: post #74
steveBK123 wrote: post #50

Earlier quoted context omitted.

> bank depositors are not engaging in risky behavior Supposedly intelligent investors leaving money in accounts above FDIC limits ($250k per holder per bank, so $500k for joint account) were engaging in risky laziness.

So what do you do when your payroll is more than $200k? The depositors were not treating SVB as investment, they were bank accounts for doing transactions.

Multiple accounts?

Re: America's pensions can't beat Vanguard but they can close a hospital

#93

Post by codingdave »

nradov wrote: post #14
OGEnthusiast wrote: post #2

I don't understand why we don't just ban private equity. Seems like zero value-add to the actual real economy.

Ban companies from owning other companies? How would that work exactly? Private equity is a convenient whipping boy for ignorant, low-information HN users who don't understand the basics of how finance works. You can certainly find examples of destructive or unethical behavior if you dig deep enough. What you don't see in the news are all the cases where PE saved companies that would have otherwise gone bankrupt.

> ignorant, low-information HN users who don't understand the basics of how finance works

I though HN was a site that welcomed people of all levels of knowledge and shared thoughts, ideas, and resources to help people learn so we can elevate each other. Why are you coming at someone who freely admitted they lack understanding and tossing out a dismissive reply to them instead of saying: "Let me help fill in the knowledge gap here."

Re: America's pensions can't beat Vanguard but they can close a hospital

#94

Post by jandrewrogers »

tehjoker wrote: post #64
lokar wrote: post #39

Earlier quoted context omitted.

One round of loan forgiveness is fine, but it builds an expectation of it in the future. All of the loans, growing larger and larger, just encourage universities to grow fatter and raise costs to students. If students could not borrow enough to attend, they would be forced to lower costs (not necessarily the very top universities, but all the rest).

other poorer countries just pay all or most tuition for students and own the universities

The State governments do own many universities. To a large extent, the government is responsible for the current situation.

Also some of the universities are older than the government by hundreds of years and private, the government can’t just “own” them.

Re: America's pensions can't beat Vanguard but they can close a hospital

#95

Post by 58028641 »

epistasis wrote: post #74
steveBK123 wrote: post #50

Earlier quoted context omitted.

> bank depositors are not engaging in risky behavior Supposedly intelligent investors leaving money in accounts above FDIC limits ($250k per holder per bank, so $500k for joint account) were engaging in risky laziness.

So what do you do when your payroll is more than $200k? The depositors were not treating SVB as investment, they were bank accounts for doing transactions.

There are banks that sweep the money across various other banks automatically.

Re: America's pensions can't beat Vanguard but they can close a hospital

#96

Post by Spivak »

lokar wrote: post #39
epistasis wrote: post #24

> Larry Summers warned against “moral hazard lectures” and demanded SVB depositors be made whole immediately in 2023, months after calling student loan relief inflationary and unfair. Moral hazard for borrowers, bailouts for banks. Not lost on the public. I can't believe I'm about to say something that could be construed as a defense of Larry Summers, but here goes: bank depositors are not engaging in risky behavior,…

One round of loan forgiveness is fine, but it builds an expectation of it in the future. All of the loans, growing larger and larger, just encourage universities to grow fatter and raise costs to students. If students could not borrow enough to attend, they would be forced to lower costs (not necessarily the very top universities, but all the rest).

I think the point wound be to eliminate all borrowing for tuition. It would be drastic and universities would complain the whole time but band-aid has to be ripped off at some point. I don't think a solution other than welding shut the money font will have a meaningful effect.

* Eliminate the entire federal student loan program. Just gone. No more loans.

* Make it so that private loans for tuition and related expenses can be trivially discharged. Like just fill out a form and it's auto-approved. You can just decide to not pay your student loans with no repercussions whatsoever. There's probably a better way to accomplish this legally but make it so that they're toxic to private lenders.

Once the money officially dries up and less than 1% of families could pay out of pocket for current tuition rates then we watch as jobs stop requiring degrees, apprenticeships become popular, and schools belt-tighten to focus on student ROI. Watch magically as GE requirements evaporate and we find out they weren't ever necessary in the first place. Watch as high schools get pressured to teach actually useful things instead of being grade school the sequel.

Re: America's pensions can't beat Vanguard but they can close a hospital

#97

Post by buellerbueller »

epistasis wrote: post #74
steveBK123 wrote: post #50

Earlier quoted context omitted.

> bank depositors are not engaging in risky behavior Supposedly intelligent investors leaving money in accounts above FDIC limits ($250k per holder per bank, so $500k for joint account) were engaging in risky laziness.

So what do you do when your payroll is more than $200k? The depositors were not treating SVB as investment, they were bank accounts for doing transactions.

Buy insurance for this type of situation. It's not like Silicon Valley lacks the funds to buy insurance. The rest of us are MANDATED to buy insurance for our cars and our healthcare, and many of us live paycheck to paycheck.

Silicon Valley, however, home to the world's greatest concentrations of private wealth? Oh no, thats a too much to ask that they play by the same rules.

Re: America's pensions can't beat Vanguard but they can close a hospital

#98

Post by munk-a »

terminalshort wrote: post #65
budududuroiu wrote: post #20

Earlier quoted context omitted.

Im gonna speculate they were referring to the part of private equity where you buy businesses to load them up with debt to buy more businesses ad nauseum

You can't load someone else with debt. That's obviously illegal. When you buy a company it isn't "them" anymore. And the new owners have exactly the same rights to borrow money as the old ones.

That's true when the debt is taken it is taken by the company (at the direction of the acquiring firm)... and maybe the bigger issue is that banks should be a whole lot more judicious in extending that debt. But some firms have found a heck of a loophole in buying a company, running an extremely high debt line, paying the acquiring firm (themselves) handsomely and then innocently whistling when the business collapses and a bunch of real economic value is erased.

Doing that to a company isn't an activity that should be rewarded since you're destroying, rather than creating, economic value. It is absolutely an exploit or flaw in our system and no more than one person should have been able to get away with it.

Re: America's pensions can't beat Vanguard but they can close a hospital

#99

Post by nradov »

codingdave wrote: post #93
nradov wrote: post #14

Earlier quoted context omitted.

Ban companies from owning other companies? How would that work exactly? Private equity is a convenient whipping boy for ignorant, low-information HN users who don't understand the basics of how finance works. You can certainly find examples of destructive or unethical behavior if you dig deep enough. What you don't see in the news are all the cases where PE saved companies that would have otherwise gone bankrupt.

> ignorant, low-information HN users who don't understand the basics of how finance works I though HN was a site that welcomed people of all levels of knowledge and shared thoughts, ideas, and resources to help people learn so we can elevate each other. Why are you coming at someone who freely admitted they lack understanding and tossing out a dismissive reply to them instead of saying: "Let me help fill in the knowl…

I thought HN was a site where users would take 30 seconds to do a modicum of research before wasting everyone's time trying to score points with a lazy, low-effort comment.

Re: America's pensions can't beat Vanguard but they can close a hospital

#100

Post by shimman »

epistasis wrote: post #74
steveBK123 wrote: post #50

Earlier quoted context omitted.

> bank depositors are not engaging in risky behavior Supposedly intelligent investors leaving money in accounts above FDIC limits ($250k per holder per bank, so $500k for joint account) were engaging in risky laziness.

So what do you do when your payroll is more than $200k? The depositors were not treating SVB as investment, they were bank accounts for doing transactions.

That's not our problem to solve, but seeing how millions of other businesses were able to pay people maybe it's SVB that needs to figure out how to do this and not lowly commentators.
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