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What about "regular" people's 401k, it took almost 10 years for it to recover. No protection there. Also if you can have a bank account above 250000, you are
by jmclnx 4y ago
What about "regular" people's 401k, it took almost 10 years for it to recover. No protection there. Also if you can have a bank account above 250000, you are not a "regular person".
- nova22033 4y agoIf you make 50K, the company that pays you probably has more than 250k in a bank account.. So this will still affect the regular person. They should definitely NOT do a 100 cents to the $ bailout...Someone needs to take a haircut
- tppiotrowski 4y agoCurious about the logic you used to determine a company's balance based on employee pay. Is this just your own number fidgeting or an actual best practice in finance? It seems weird that a company paying someone less than $5K a month would need $250K in the bank. we had $100K seed check at my startup and I got paid $6K per month as a counter example.
- icedchai 4y agoIt's a bit different. Banks are supposed to be a safe place for cash. "Safe" means essentially zero risk: interest checking, CDs, etc. Low interest, low risk. This is very different from an investment account (401k or not) where risk is expected. If I had >250K at a smaller bank, I'd be concerned.
- bradleyjg 4y agoHouse prices are supposed to only go up. Tech companies are not supposed to do layoffs. Countries are supposed to liberalize over time. It’s time for a lot of people to grow up.
- Ekaros 4y agoTruth is that there is no safe place for money. Maybe it is time of everyone to understand that. Everything has some level of risk involved. And here it is time based one.
- DennisP 4y agoA properly-stored crypto cold wallet is a safe place for pretty much any amount of money. Most people here tell me I don't need that because banks are safe and secure and backed by the might of the US government.
- swatcoder 4y ago> A properly-stored crypto cold wallet is a safe place for pretty much any amount of money. ??? It's a safe place for the units of cryptocurrency identified by it, but those aren't money until it can be exchanged for something. Between you burying that USB key under the old oak tree and you digging it back up post-apocalypse, those units of cryptocurrency will have a very different exchange value. It's no different than tucking currency under a mattress, except that the odds of your 2023 cryptocoin being worthless by the time you pull it out is much higher than that the 20th century's global reserve currency becomes worthless. Although it might go the other way, your wallet contents don't sound like a very safe store of money at all.
- belltaco 4y agoGood luck trying to pay 500 employees every two weeks with a crypto cold wallet.
- DennisP 4y ago
- DennisP 4y agoYou said "What about all the people who lost what to them was a lot of money in 2008, did the Gov protect them? I do not think so." My claim is that the bank accounts of regular people in 2008 were in fact protected, since anything under $250K is automatically protected, in exactly the same way proposed here. Investors certainly lost a lot of money in 2008. And investors in this bank will lose all their money too, since bailing out the bank's investors, or the bank as a business, is not being proposed by anyone.
- fauigerzigerk 4y agoAlmost all customers of this bank are Silicon Valley tech companies and startups. Some of them will struggle to make payroll in the coming days. Do you really think it's sensible to let healthy companies fail and people lose their jobs or keep working without getting paid because other people had to wait far too long to recover their 401k? This logic of equal misery makes no sense to me.
- prpl 4y agoThey can get bridge loans or sell their deposit claims at a discount (in exchange for the liquidity), if they didn’t otherwise have supplemental insurance. That’s what’s at stake here, the companies would prefer to have all their money, right now. They could have almost all of their money if they are happy to wait, or they could pay, out of their money, to have their money right now. Don’t fall into the trap of corporate sympathy here, they would not do the same for you.
- fauigerzigerk 4y ago>They can get bridge loans Yes, I just worry that some of them might not be able to sort this out quickly enough on their own. Also, the total amount of similarly illiquid government bonds is gigantic after interest rates have shot up so quickly. Let's not make the Lehman mistake again. It's not worth sacrificing the entire economy to ideological sensitivities (on both sides of the political spectrum).
- ashwagary 4y ago>Do you really think it's sensible to let healthy companies fail No but I also dont think its sensible or healthy for tax payers to cover losses incurred through mismanagement of funds for a select class of people. An opportunity was just created for companies willing to take a risk to gain new clients, I think that should be allowed to play out.
- fauigerzigerk 4y agoIn this particular case tax payers would not have to cover any losses at all. The actual losses are relatively small and depositors can and should be asked to take a haircut if necessary. The critical issue here is timing. You don't want viable companies to run out of money just because a temporary liquidity issue cannot be resolved quickly enough. In general, I disagree that it is never sensible for tax payers to act as insurance of last resort provided that the insurance premium in the form of business taxes is adequate. It can be the least worst solution for society as a whole in case of a domino effect. But this is not (yet) what's happening here.
- stickfigure 4y agoThe social contract defines wildly different levels of risk for "money I invest in the stock market" vs "money I put in a bank".