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> Are you (and the YC boss) suggesting that the government is more nimble than VC machinery at deploying capital when shit hits the fan? I can't speak for YC.
by ahzhou 4y ago
> Are you (and the YC boss) suggesting that the government is more nimble than VC machinery at deploying capital when shit hits the fan?
I can't speak for YC. VC is almost certainly faster, but it's not built to wire money over the weekend. The issue happens when the FDIC insurance isn't enough make payroll on Monday. I don't think the government can bail anyone out in that time period either, but a lack of solutions doesn't make it any less of a problem.
> How is it unclear?
On paper, they have enough in assets (as of Dec), but there's no way to know if the market takes that price as the FDIC sells it off to cover the deposits in the coming months. Typically liquidating a position impacts the price of an asset.
- landemva 4y ago> On paper, they have enough in assets Maybe with 'mark to maturity' accounting which banks can use in some circumstances. But T-bonds aren't cash in hand. There is a loss to be realized when selling before maturity. This leads to using 'mark to market' accounting which helps to ensure more prudent reserves.