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Except this is the opposite of what happened in 2008 with bailing out the banks. Then, the banks got public money to remain solvent. Here, the bank is taking th

by ianai 4y ago

Except this is the opposite of what happened in 2008 with bailing out the banks. Then, the banks got public money to remain solvent. Here, the bank is taking the hit and the government is ensuring the depositors get their funds back. In 08 people were kicked out of their homes and banks were propped up with public funds. Here, the depositors are being made whole and the bank is going out of business. The salt is your typical 0 knowledge hot take. It’s absolutely in the interest of the greater economy to have a functioning banking system backing high risk/high reward activities like Silicon Valley. And charge the risk appropriately high fees, of course. SV has been a very bright spot in the economy for several decades now - through thick and thin. If anything, it’s a lesson about how assets should be accounted for in corporate statements. It’s also a statement that the perception of SV is a little sour and could use some reflection. Maybe look for ways to better engage the rest of the community and figure out where resentment stems. (I’d guess calling large swaths of the US “fly over country”, charging high prices, and other consumer feedback involved.)

auntienomen 4y ago
Tangent: In decades of socializing in NYC and the Bay Area, I've only ever seen the term 'flyover country' used by people complaining that the coastal elites look down on them. Never once heard the term from an actual coastal elite.
- ianai 4y ago
  And I live in “flyover country” and hear it plenty and it is a fact of life and business here. Look, when corporations like Amazon look for a new HQ they head to places like NYC. They say it’s because of the larger labor pools there. And it’s even valid to an extent - Arizona keeps getting semi fabs because they already have semi fabs and labor. The opposite would be looking for some location with the characteristics to grow over time into the location a company wants and making the expanse a long term project. Population characteristics absolutely can change on the scale of decades. Edit-Just to put a point on this. “Flyover country” is undeveloped country. It’s cheaper to develop. If you want to build a huge fab in the middle of nowhere it’s going to cost little more than the costs of supplies and labor. And there’s always a way to get labor if the price is right. Do it in NYC or SF and you’re competing with all the other current/future uses of that land and it’s going to be expensive. Probably going to face zoning restrictions.
  - auntienomen 4y ago
    Sounds like you're agreeing with me. "Flyover country" is what the people who live there call it. No need to put the words in anyone else's mouth.
    - ianai 4y ago
      What I’m saying is if SV had a history of developing economy outside of the coasts there might be less salt. Denver’s kind of a good case in point. It’s seen a huge tech influx. There’s probably less salt towards tech/SV there than elsewhere. And if not, the reasons may be informative for anyone looking to better the image of SV. But living there is also sky high-and maybe it’s time to look for ways to move on to cheaper pastures.
      - Rapzid 4y ago
        I guess Texas is a coastal elite State now? Well, we do have a coast..
- mym1990 4y ago
  There's a country song called 'Flyover States' by Jason Aldean thats pretty good!
- TexanFeller 4y ago
  I think of NYC and CA as flyover country since I never go there, but fly right over it to get to Europe or Asia ;P
unity1001 4y ago
> Here, the depositors are being bailed out There. Now its correct. Rephrasing something does not change its nature. The 2008 bailouts were done with that excuse too. They were 'too big to fail', and it would 'affect everyone' so that they were bailed out to 'help' the main street. > It’s absolutely in the interest of the greater economy to have a functioning banking system backing high risk/high reward activities like Silicon Valley. It is. And its totally against the interest of the greater economy to bail out those who screw it up by taking great risks. Its against the interest of the greater economy to bail out those who didnt take any risk either. Because it socializes the risk while privatizing the reward. That's why people hate bailouts. All those startups and wealthy entrepreneurs put their money in the wrong bank. The wrong bank was shown as the best bank through a lot of fallacies, ranging from groupthink to obligations pushed on startups by VCs. Nobody came up and tried to raise awareness about how bad this setup was. Those who tried to do it were unheard. Those most affected from this, the rich VCs, all the SV funds, tech ecosystem top dogs, 'thought leaders', investors, are the ones who created this environment and caused this to happen. Now, when the cows are coming home, asking for a bailout is socializing the risk while privatizing the profits. The only exception can be made in the case of the state taking a ginormous amount of ownership of everything that it bailed out and not sell its shares out until it milked its money's worth to cover its bailout amount plus an above-market profit rate from that investment...
- teawrecks 4y ago
  This statement doesn't make sense to me: > Its against the interest of the greater economy to bail out those who didnt take any risk either. Because it socializes the risk while privatizing the reward. In the first sentence you say there is no risk being taken by a group, and in the second sentence you imply there is a risk being taken that a group should not be bailed out of. Could you elaborate? What non-risk taking risky group are you taking about here? Are you arguing that the depositors were also risk takers here? What were their options to mitigate that risk besides not use a bank?
  - unity1001 4y ago
    The public has an interest in enabling high risk ventures, BUT, this must happen through a well designed mechanism that sustains itself. Like how I explained in my comment later: Through the taxes levied for that reason, through insurance fees charged to fund that mechanism and so on. But none of these apply in this case. High risk decisions were made by all of these actors, including most of the depositors, while privatizing all the profits. The very CEO of the bank is a libertarian and he publicly advocates that government should disappear. All the depositors are either part of the VC crowd, or startups that are practically controlled by those VC crowd. And most of the money (ironically) still belongs to that actual VC crowd indirectly because those VCs control the startups that they gave those funds to. So basically it was all privatized profits until the risky decisions came home and suddenly a need for socializing the losses came to being, causing even the die hard libertarian CEO of SVB to start publicly demanding that the govt. should bail them out, in a public display of total lack of principles. (then again Ayn Rand did the same). Yes, the depositors were also risk takers. They took the risk of trusting that high-risk bank that lobbied for watering down regulations for more profit. They took the risk of trusting the VCs who forced them to put their money in that bank. Non startup/VC related clients took the risk of putting their money in that bank for reasons ranging from higher gains to groupthink. Those were decisions taken by them. The public cannot be expected to save them from the consequences of that risk taking without getting back its money's worth. And no - the return cannot be 'a more lively startup ecosystem'. The expected return can only be money. That the public so desperately needs for repairing the society.
akira2501 4y ago
There's a marketing angle to calling yourself "Silicon Valley Bank." This is just the ugly side of that marketing playing out. Meanwhile, the FDIC is required to do whatever is less costly to the FDIC insurance fund. There really isn't a lot of choice in the matter from the government's perspective.

by ianai 4y ago

auntienomen 4y ago

Tangent: In decades of socializing in NYC and the Bay Area, I've only ever seen the term 'flyover country' used by people complaining that the coastal elites look down on them. Never once heard the term from an actual coastal elite.

ianai 4y ago
And I live in “flyover country” and hear it plenty and it is a fact of life and business here. Look, when corporations like Amazon look for a new HQ they head to places like NYC. They say it’s because of the larger labor pools there. And it’s even valid to an extent - Arizona keeps getting semi fabs because they already have semi fabs and labor. The opposite would be looking for some location with the characteristics to grow over time into the location a company wants and making the expanse a long term project. Population characteristics absolutely can change on the scale of decades. Edit-Just to put a point on this. “Flyover country” is undeveloped country. It’s cheaper to develop. If you want to build a huge fab in the middle of nowhere it’s going to cost little more than the costs of supplies and labor. And there’s always a way to get labor if the price is right. Do it in NYC or SF and you’re competing with all the other current/future uses of that land and it’s going to be expensive. Probably going to face zoning restrictions.
- auntienomen 4y ago
  Sounds like you're agreeing with me. "Flyover country" is what the people who live there call it. No need to put the words in anyone else's mouth.
  - ianai 4y ago
    What I’m saying is if SV had a history of developing economy outside of the coasts there might be less salt. Denver’s kind of a good case in point. It’s seen a huge tech influx. There’s probably less salt towards tech/SV there than elsewhere. And if not, the reasons may be informative for anyone looking to better the image of SV. But living there is also sky high-and maybe it’s time to look for ways to move on to cheaper pastures.
    - Rapzid 4y ago
      I guess Texas is a coastal elite State now? Well, we do have a coast..
mym1990 4y ago
There's a country song called 'Flyover States' by Jason Aldean thats pretty good!
TexanFeller 4y ago
I think of NYC and CA as flyover country since I never go there, but fly right over it to get to Europe or Asia ;P

unity1001 4y ago

> Here, the depositors are being bailed out There. Now its correct. Rephrasing something does not change its nature. The 2008 bailouts were done with that excuse too. They were 'too big to fail', and it would 'affect everyone' so that they were bailed out to 'help' the main street. > It’s absolutely in the interest of the greater economy to have a functioning banking system backing high risk/high reward activities like Silicon Valley. It is. And its totally against the interest of the greater economy to bail out those who screw it up by taking great risks. Its against the interest of the greater economy to bail out those who didnt take any risk either. Because it socializes the risk while privatizing the reward. That's why people hate bailouts. All those startups and wealthy entrepreneurs put their money in the wrong bank. The wrong bank was shown as the best bank through a lot of fallacies, ranging from groupthink to obligations pushed on startups by VCs. Nobody came up and tried to raise awareness about how bad this setup was. Those who tried to do it were unheard. Those most affected from this, the rich VCs, all the SV funds, tech ecosystem top dogs, 'thought leaders', investors, are the ones who created this environment and caused this to happen. Now, when the cows are coming home, asking for a bailout is socializing the risk while privatizing the profits. The only exception can be made in the case of the state taking a ginormous amount of ownership of everything that it bailed out and not sell its shares out until it milked its money's worth to cover its bailout amount plus an above-market profit rate from that investment...

teawrecks 4y ago
This statement doesn't make sense to me: > Its against the interest of the greater economy to bail out those who didnt take any risk either. Because it socializes the risk while privatizing the reward. In the first sentence you say there is no risk being taken by a group, and in the second sentence you imply there is a risk being taken that a group should not be bailed out of. Could you elaborate? What non-risk taking risky group are you taking about here? Are you arguing that the depositors were also risk takers here? What were their options to mitigate that risk besides not use a bank?
- unity1001 4y ago
  The public has an interest in enabling high risk ventures, BUT, this must happen through a well designed mechanism that sustains itself. Like how I explained in my comment later: Through the taxes levied for that reason, through insurance fees charged to fund that mechanism and so on. But none of these apply in this case. High risk decisions were made by all of these actors, including most of the depositors, while privatizing all the profits. The very CEO of the bank is a libertarian and he publicly advocates that government should disappear. All the depositors are either part of the VC crowd, or startups that are practically controlled by those VC crowd. And most of the money (ironically) still belongs to that actual VC crowd indirectly because those VCs control the startups that they gave those funds to. So basically it was all privatized profits until the risky decisions came home and suddenly a need for socializing the losses came to being, causing even the die hard libertarian CEO of SVB to start publicly demanding that the govt. should bail them out, in a public display of total lack of principles. (then again Ayn Rand did the same). Yes, the depositors were also risk takers. They took the risk of trusting that high-risk bank that lobbied for watering down regulations for more profit. They took the risk of trusting the VCs who forced them to put their money in that bank. Non startup/VC related clients took the risk of putting their money in that bank for reasons ranging from higher gains to groupthink. Those were decisions taken by them. The public cannot be expected to save them from the consequences of that risk taking without getting back its money's worth. And no - the return cannot be 'a more lively startup ecosystem'. The expected return can only be money. That the public so desperately needs for repairing the society.

akira2501 4y ago

There's a marketing angle to calling yourself "Silicon Valley Bank." This is just the ugly side of that marketing playing out. Meanwhile, the FDIC is required to do whatever is less costly to the FDIC insurance fund. There really isn't a lot of choice in the matter from the government's perspective.