4 ms·

Don't we keep our entire life's savings in companies aka banks that we don’t run, don’t control, don’t buy, don’t administrate, and don’t really understand.

alphadevx 11y ago
They are much more tightly regulated (legally), and insured, often by governments.
- wanderingstan 11y ago
  That's an excellent analogy I hadn't thought of. SLA's between companies is perhaps a proxy in the data world, but nothing for individual users. When data will become so important/politicized that there will be regulations about data retention?
  - TeMPOraL 11y ago
    There are some regulations already - mostly on the side of keeping some of the data for tax/legal purposes. For decades. (Makes me wonder how all those fly-by-night cloud startups are handling that.)
- vezzy-fnord 11y ago
  The reason they are is because of their intrinsic propensity to destabilization, vis-a-vis Minsky and the Financial Instability Hypothesis. Of course, how you structure your regulatory framework can have adverse consequences, as well (i.e. implicit guarantees by GSEs on mortgage-backed securities). It is further arguable whether or not fractional reserve exacerbates these effects.
  - Spooky23 11y ago
    I was just talking to my pals at Digital Equipment Corporation and Sun Microsystems about how stable the technology industry is. Then, I read an article in Google Reader discussing how we don't even have to worry about arbitrary and capricious market behavior from our cloud partners, since we all have long term contracts and are protected against upward price swings from our cloud partners or material changes to the services they deliver. </s>
    - fixermark 11y ago
      I see the sarc tag, but if you had a long-term contract with Reader it'd probably have been a different story.
      - Spooky23 11y ago
        Maybe. When you subscribe to Google Apps, you get access to applications that aren't necessarily part of your SLA. The point isn't that these services are bad. Just that you need to be strategic about how you use them.
Retric 11y ago
I think most people have more of there savings in stuff than banks. (Clothes, PC, car, House etc.) At scale cash is a proxy for wealth not actual wealth. PS: A home loan might seem like the bank owns your house, but they can't say no when you sell it.
- goodcall 11y ago
  How about 401K and Social Security ?
  - Retric 11y ago
    Social Security is not wealth, as to 401K average savings is not that high. http://blog.personalcapital.com/wp-content/uploads/2014/03/401k-average.png http://blog.personalcapital.com/wp-content/uploads/2014/03/4... Note that's only for people with open 401(k) accounts. Also it's pretax, so subtract ~25-35+% from those numbers. For comparison the average house is worth ~180k.
- TheCoelacanth 11y ago
  The bank would have the power to stop you from selling your house in some circumstances (such as a short sale).
- dragonwriter 11y ago
  > PS: A home loan might seem like the bank owns your house, but they can't say no when you sell it. They can, unless you satisfy the loan by paying it off as part of the process, at which point they no longer have an ownership-like interest. In the unusual cases where you try to sell a house without doing that, the bank absolutely can -- and often will -- say no.
  - Retric 11y ago
    If you have the cash to pay them off, then they don't get to say no even if it's a short sale. Alternatively, you can generally walk away and sell it to them for the value of the loan.
tremon 11y ago
Our life's savings are not unique, and can be replenished from a different source. Our childhood pictures and personal correspondence are, and generally can not. Besides, banks are subject to rather a lot of external control, through regulation (oh noes!). Here in NL the government actually guarantees your savings (but not investments) should a bank go belly-up. I believe the US did something similar, although I didn't bother to follow the specifics about who bailed out who for whom.
- theandrewbailey 11y ago
  > Our life's savings are not unique, and can be replenished from a different source. In absolute terms, they can, but no one I know of has a solid backup plan for life savings. Life savings come from saving over a lifetime. You can't really replenish them without replenishing someone's life and ability to save.
  - nekopa 11y ago
    You gave me an interesting startup idea: How to back up your savings!(.io) Now to make it work...
    - imtringued 11y ago
      I believe the word you're looking for is "insurance" :P
- ciupicri 11y ago
  By the way, as far as I know all the banks from the European Union guarantees savings up to 50,000 euros, some even more. And if you have more money, you can split them between multiple banks.
  - jacquesm 11y ago
    NL 100K euros. http://www.dnb.nl/over-dnb/de-consument-en-dnb/de-consument-en-toezicht/depositogarantiestelsel/ http://www.dnb.nl/over-dnb/de-consument-en-dnb/de-consument-... Subject to some fine print so it can take some work to get your accounts set up in such a way that you would qualify. Bank mergers are a risk to be aware of here.
theandrewbailey 11y ago
I don't. Credit unions exist.

alphadevx 11y ago

They are much more tightly regulated (legally), and insured, often by governments.

wanderingstan 11y ago
That's an excellent analogy I hadn't thought of. SLA's between companies is perhaps a proxy in the data world, but nothing for individual users. When data will become so important/politicized that there will be regulations about data retention?
- TeMPOraL 11y ago
  There are some regulations already - mostly on the side of keeping some of the data for tax/legal purposes. For decades. (Makes me wonder how all those fly-by-night cloud startups are handling that.)
vezzy-fnord 11y ago
The reason they are is because of their intrinsic propensity to destabilization, vis-a-vis Minsky and the Financial Instability Hypothesis. Of course, how you structure your regulatory framework can have adverse consequences, as well (i.e. implicit guarantees by GSEs on mortgage-backed securities). It is further arguable whether or not fractional reserve exacerbates these effects.
- Spooky23 11y ago
  I was just talking to my pals at Digital Equipment Corporation and Sun Microsystems about how stable the technology industry is. Then, I read an article in Google Reader discussing how we don't even have to worry about arbitrary and capricious market behavior from our cloud partners, since we all have long term contracts and are protected against upward price swings from our cloud partners or material changes to the services they deliver. </s>
  - fixermark 11y ago
    I see the sarc tag, but if you had a long-term contract with Reader it'd probably have been a different story.
    - Spooky23 11y ago
      Maybe. When you subscribe to Google Apps, you get access to applications that aren't necessarily part of your SLA. The point isn't that these services are bad. Just that you need to be strategic about how you use them.

Retric 11y ago

I think most people have more of there savings in stuff than banks. (Clothes, PC, car, House etc.) At scale cash is a proxy for wealth not actual wealth. PS: A home loan might seem like the bank owns your house, but they can't say no when you sell it.

goodcall 11y ago
How about 401K and Social Security ?
- Retric 11y ago
  Social Security is not wealth, as to 401K average savings is not that high. http://blog.personalcapital.com/wp-content/uploads/2014/03/401k-average.png http://blog.personalcapital.com/wp-content/uploads/2014/03/4... Note that's only for people with open 401(k) accounts. Also it's pretax, so subtract ~25-35+% from those numbers. For comparison the average house is worth ~180k.
TheCoelacanth 11y ago
The bank would have the power to stop you from selling your house in some circumstances (such as a short sale).
dragonwriter 11y ago
> PS: A home loan might seem like the bank owns your house, but they can't say no when you sell it. They can, unless you satisfy the loan by paying it off as part of the process, at which point they no longer have an ownership-like interest. In the unusual cases where you try to sell a house without doing that, the bank absolutely can -- and often will -- say no.
- Retric 11y ago
  If you have the cash to pay them off, then they don't get to say no even if it's a short sale. Alternatively, you can generally walk away and sell it to them for the value of the loan.

tremon 11y ago

Our life's savings are not unique, and can be replenished from a different source. Our childhood pictures and personal correspondence are, and generally can not. Besides, banks are subject to rather a lot of external control, through regulation (oh noes!). Here in NL the government actually guarantees your savings (but not investments) should a bank go belly-up. I believe the US did something similar, although I didn't bother to follow the specifics about who bailed out who for whom.

theandrewbailey 11y ago
> Our life's savings are not unique, and can be replenished from a different source. In absolute terms, they can, but no one I know of has a solid backup plan for life savings. Life savings come from saving over a lifetime. You can't really replenish them without replenishing someone's life and ability to save.
- nekopa 11y ago
  You gave me an interesting startup idea: How to back up your savings!(.io) Now to make it work...
  - imtringued 11y ago
    I believe the word you're looking for is "insurance" :P
ciupicri 11y ago
By the way, as far as I know all the banks from the European Union guarantees savings up to 50,000 euros, some even more. And if you have more money, you can split them between multiple banks.
- jacquesm 11y ago
  NL 100K euros. http://www.dnb.nl/over-dnb/de-consument-en-dnb/de-consument-en-toezicht/depositogarantiestelsel/ http://www.dnb.nl/over-dnb/de-consument-en-dnb/de-consument-... Subject to some fine print so it can take some work to get your accounts set up in such a way that you would qualify. Bank mergers are a risk to be aware of here.

theandrewbailey 11y ago

I don't. Credit unions exist.