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You get your last paycheck, sure, but you still lose your job which is definitely a threat to workers lively hoods. It's even more of a threat if the whole sec

You get your last paycheck, sure, but you still lose your job which is definitely a threat to workers lively hoods. It's even more of a threat if the whole sector you're employed in suffers simultaneously, as it becomes difficult to continue to be employed in that sector.

JackFr 4y ago
I say as a person who’s been laid off twice and worked for a company that went bankrupt — why is that my problem? Why should you get my money? (In the case of the company I worked for which went bankrupt — we were a fintech startup with a truly innovative and fantastic product. Our management made three bad decisions which led to our demise. Two were technical and would have been recoverable, the last was a strategic move which ultimately proved disastrous.)
- ordinaryradical 4y ago
  Because you don’t make depositors responsible for banks’ mismanagement unless you intend to create a depression. Are you truly proposing that every time a bank fails we make everyone who kept money there take the hit? A return to the 1920s, eh?
  - ryanwaggoner 4y ago
    Why do you think the FDIC insurance limit is $250k instead of $250mm, or infinite?
    - ordinaryradical 4y ago
      I will answer and you can answer this question: Why is the government involved beyond that limit in this case? Could it be they want to give the average person peace of mind while retaining the flexibility to handle a restructuring however they deem best?
      - freeone3000 4y ago
        Because the bank continues to have assets, and those assets will be dispersed to cover depositors.
    - paulclinger 4y ago
      It's because there is a cost associated with this insurance. It's not a bottomless pit of money, as FDIC pays out using the funds it collects from the participant banks and receives no funding from the government (https://en.wikipedia.org/wiki/Federal_Deposit_Insurance_Corporation#Funds https://en.wikipedia.org/wiki/Federal_Deposit_Insurance_Corp...). I think it should be possible for the bank to get better coverage, but they should be paying much larger premium if they want insurance up to 250mm instead of 250k. I also think that similar to "FDIC insured" labels in bank branches, FDIC should require posting "13% of deposits are FDIC insured" to help assess risk for those clients that have uninsured funds.
- rmilk 4y ago
  Exactly. I got a letter from my last startup Thu at 11pm telling us they had no cash for payroll tomorrow and we were all laid off. Poor planning along with super-lean cash flow broke my employer. This is no different. For example, how many business checking accounts are backed by money market funds to get a little interest on them? Clearly states in offerings that rates aren’t guaranteed and you could even lose capital. Same with the $250k FDIC limit - clear risk with zero forethought from these employers of hedging it with lines of credit, payroll/business continuity insurance, etc. Those are things “slow” companies do, not move fast and break things companies do (sarcasm intended - I have worked in R&D in both types multiple times).
tsimionescu 4y ago
If things get dire enough, the government can intervene to protect workers in various ways (unemployment benefits, emergency housing, government employment - there are many options). No need to prop up the middlemen with free insurance.
- CharlieDigital 4y ago
  > with free insurance Taxpayer funded insurance. What I wonder here is how many SV CEOs and VC partners are down with Biden's proposed hike on the capital gains tax rate.
  - grugagag 4y ago
    None. They want it all at no cost. Should greed be fullfilled this one time around, then it’s guaranteed to happen again in a different shape or form
  - ipython 4y ago
    Not exactly taxpayer funded: https://www.fdic.gov/resources/deposit-insurance/deposit-insurance-fund/ https://www.fdic.gov/resources/deposit-insurance/deposit-ins... > The DIF is funded mainly through quarterly assessments on insured banks. A bank's assessment is calculated by multiplying its assessment rate by its assessment base. A bank's assessment base and assessment rate are determined and paid each quarter.
    - CharlieDigital 4y ago
      Not sure if that's going to cover the haircut that depositors are going to take with respect to the difference in SBC's asset values at liquidation. There is surely going to be some gap and the question is should the taxpayers be on the hook for that gap to make the depositors whole.
- anon291 4y ago
  Unemployment insurance is already available. California and all the west coast states at least will also give free insurance in many cases. There is little risk to being unemployed especially for a short term while employees slowly get their money back after the asset sales. I don't really see the big problem here. Svb still has substantial assets. In the coming weeks, they will be sold and solid portions of the money returned. If companies have to temporarily furlough people, they will still get a reasonable wage that most Americans live on.
TrispusAttucks 4y ago
That definitely sucks but why should Americans who had nothing to do with the bank or sector fork over public tax dollars to provide a soft landing?
- mulmen 4y ago
  Because it minimizes harm and stabilizes the economy. There are benefits to providing safety nets to people who didn’t have a hand in their own misfortune. Specifically those people get to continue providing value. The modern economy is not zero sum. Work creates value, it is in everyone’s interest to stabilize productive workers.
  - TrispusAttucks 4y ago
    Your statement is out of touch with most American workers. Especially blue collar. Subsidize my class on the backs of the underclass. Let's solve the wealth inequality gap with more wealth inequality.
    - mulmen 4y ago
      The owners of the bank aren’t being bailed out. The FDIC is only paying back depositors. That is the working class. This bank doesn’t just cater to big bad VCs. When depositors lose their savings through no fault of their own the whole system comes crashing down. That won’t help blue collar workers.
- deleted 4y ago
  [deleted]

JackFr 4y ago

I say as a person who’s been laid off twice and worked for a company that went bankrupt — why is that my problem? Why should you get my money? (In the case of the company I worked for which went bankrupt — we were a fintech startup with a truly innovative and fantastic product. Our management made three bad decisions which led to our demise. Two were technical and would have been recoverable, the last was a strategic move which ultimately proved disastrous.)

ordinaryradical 4y ago
Because you don’t make depositors responsible for banks’ mismanagement unless you intend to create a depression. Are you truly proposing that every time a bank fails we make everyone who kept money there take the hit? A return to the 1920s, eh?
- ryanwaggoner 4y ago
  Why do you think the FDIC insurance limit is $250k instead of $250mm, or infinite?
  - ordinaryradical 4y ago
    I will answer and you can answer this question: Why is the government involved beyond that limit in this case? Could it be they want to give the average person peace of mind while retaining the flexibility to handle a restructuring however they deem best?
    - freeone3000 4y ago
      Because the bank continues to have assets, and those assets will be dispersed to cover depositors.
  - paulclinger 4y ago
    It's because there is a cost associated with this insurance. It's not a bottomless pit of money, as FDIC pays out using the funds it collects from the participant banks and receives no funding from the government (https://en.wikipedia.org/wiki/Federal_Deposit_Insurance_Corporation#Funds https://en.wikipedia.org/wiki/Federal_Deposit_Insurance_Corp...). I think it should be possible for the bank to get better coverage, but they should be paying much larger premium if they want insurance up to 250mm instead of 250k. I also think that similar to "FDIC insured" labels in bank branches, FDIC should require posting "13% of deposits are FDIC insured" to help assess risk for those clients that have uninsured funds.
rmilk 4y ago
Exactly. I got a letter from my last startup Thu at 11pm telling us they had no cash for payroll tomorrow and we were all laid off. Poor planning along with super-lean cash flow broke my employer. This is no different. For example, how many business checking accounts are backed by money market funds to get a little interest on them? Clearly states in offerings that rates aren’t guaranteed and you could even lose capital. Same with the $250k FDIC limit - clear risk with zero forethought from these employers of hedging it with lines of credit, payroll/business continuity insurance, etc. Those are things “slow” companies do, not move fast and break things companies do (sarcasm intended - I have worked in R&D in both types multiple times).

tsimionescu 4y ago

If things get dire enough, the government can intervene to protect workers in various ways (unemployment benefits, emergency housing, government employment - there are many options). No need to prop up the middlemen with free insurance.

CharlieDigital 4y ago
> with free insurance Taxpayer funded insurance. What I wonder here is how many SV CEOs and VC partners are down with Biden's proposed hike on the capital gains tax rate.
- grugagag 4y ago
  None. They want it all at no cost. Should greed be fullfilled this one time around, then it’s guaranteed to happen again in a different shape or form
- ipython 4y ago
  Not exactly taxpayer funded: https://www.fdic.gov/resources/deposit-insurance/deposit-insurance-fund/ https://www.fdic.gov/resources/deposit-insurance/deposit-ins... > The DIF is funded mainly through quarterly assessments on insured banks. A bank's assessment is calculated by multiplying its assessment rate by its assessment base. A bank's assessment base and assessment rate are determined and paid each quarter.
  - CharlieDigital 4y ago
    Not sure if that's going to cover the haircut that depositors are going to take with respect to the difference in SBC's asset values at liquidation. There is surely going to be some gap and the question is should the taxpayers be on the hook for that gap to make the depositors whole.
anon291 4y ago
Unemployment insurance is already available. California and all the west coast states at least will also give free insurance in many cases. There is little risk to being unemployed especially for a short term while employees slowly get their money back after the asset sales. I don't really see the big problem here. Svb still has substantial assets. In the coming weeks, they will be sold and solid portions of the money returned. If companies have to temporarily furlough people, they will still get a reasonable wage that most Americans live on.

TrispusAttucks 4y ago

That definitely sucks but why should Americans who had nothing to do with the bank or sector fork over public tax dollars to provide a soft landing?

mulmen 4y ago
Because it minimizes harm and stabilizes the economy. There are benefits to providing safety nets to people who didn’t have a hand in their own misfortune. Specifically those people get to continue providing value. The modern economy is not zero sum. Work creates value, it is in everyone’s interest to stabilize productive workers.
- TrispusAttucks 4y ago
  Your statement is out of touch with most American workers. Especially blue collar. Subsidize my class on the backs of the underclass. Let's solve the wealth inequality gap with more wealth inequality.
  - mulmen 4y ago
    The owners of the bank aren’t being bailed out. The FDIC is only paying back depositors. That is the working class. This bank doesn’t just cater to big bad VCs. When depositors lose their savings through no fault of their own the whole system comes crashing down. That won’t help blue collar workers.
deleted 4y ago
[deleted]