13 ms·

In cases where you can't predict the future appropriately, sometimes it's better to make prudent decisions that help everyone instead of attempting to punish th

In cases where you can't predict the future appropriately, sometimes it's better to make prudent decisions that help everyone instead of attempting to punish the sinful. Keep in mind that bank shareholders and senior management are going to get wiped out and fired.

deleted 4y ago
[deleted]
hypothesis 4y ago
>senior management are going to get wiped out and fired Wasn’t one of executives working at Lehman Brothers or some such before? This is just failing upwards and doing same thing.
mitthrowaway2 4y ago
"Punishing the sinful" isn't about morals, it's about incentives, and ensuring a level playing field where sinning doesn't improve your long-term competitiveness. Will senior management have to return their 2021 performance bonuses? If not, successful sinning is just a matter of ensuring you cash out early.
- mgraczyk 4y ago
  Who are you trying to disincentivize? How would it dissuade the bank's management if depositors took a haircut? What behavior do you think punishing depositors would prevent? Do you think depositors should hire an accountant and economist to review their bank's balance sheet every quarter?
  - Uvix 4y ago
    If they have more than $250K in the one institution: yes, they should. Better yet would be spreading their deposits around, but if they don't want to do that, they should take the necessary steps to evaluate the risk appropriately.
    - mgraczyk 4y ago
      Ok but that's a bad policy that makes no sense and I'm glad the fed, Treasury, and FDIC are stepping in to change it. Sad that congress hasn't done anything over the past few years, but better the problem be solved than letting faith in our financial system collapse.
      - rashkov 4y ago
        It does seem like a weird loophole and charade to have to split money among many banks. Just give businesses a way to store their money without earning interest and with no risk. As far as I know that’s not an option under our banking system
        amalcon 4y ago
        It's neither a loophole nor a charade: it's diversification to reduce exposure to risk. Bank failures are somewhat coordinated, sure. Still, it's much more likely that one bank fails than N>1 banks. Since you are exposed to less risk, your insurer (FDIC) is also exposed to less risk. It makes complete sense for the insurer to incentivize this sort of behavior.
        ProjectArcturis 4y ago
        But what it really incentivizes is putting all your money in a too-big-to-fail bank. That's much easier and just as safe as opening a dozen, or hundreds of accounts. And it results in there being 3 banks in the whole country.
        politician 4y ago
        There is, in truth, only one “bank” in this country. The Federal Reserve Banks that hold the master ledger for the official US Dollar market. Everything else downstream is basically redundant legacy infrastructure from a time before pervasive broadband network infrastructure.
  - hn_throwaway_99 4y ago
    > Do you think depositors should hire an accountant and economist to review their bank's balance sheet every quarter? Basically, yes, but without the hyperbole - an accountant yes, an economist no. This is not that hard. Treasury management is a specific function of any company. I definitely don't blame these startups for not being financial experts, but VCs absolutely should have been coaching their client companies how to manage their cash safely.
    - mgraczyk 4y ago
      Imagine what the world would look like if you got what you're asking for. Tens of thousands of extra dollars of overhead to open a bank account? To save literally nothing directly for taxpayers, and a few dollars per account for banks? I would strongly prefer to he socialized insurance and safety net in this case, and I'm a die hard capitalist.
      - hn_throwaway_99 4y ago
        You seem to think that the world doesn't already work like this. There are tons [1] of [2] products [3] that are offered specifically to make it easy to spread cash around at multiple institutions. And that in and of it self is beneficial, because it is essentially diversifying the risk of those deposits. Now, with what the fed has done, why would anyone bother spreading their risk around? 1. https://www.intrafinetworkdeposits.com/ https://www.intrafinetworkdeposits.com/ 2. https://www.wintrust.com/maxsafe.html https://www.wintrust.com/maxsafe.html 3. https://www.moneycrashers.com/cash-management-account/ https://www.moneycrashers.com/cash-management-account/
        creato 4y ago
        Seems like the FDIC is achieving the exact same outcome with a lot less hassle and overhead for everyone.
        naasking 4y ago
        I think this is exactly it. More and more this arrangement is starting to sound like the baseless justification used for US healthcare: a bunch of middle men milking value for little actual benefit. Addressing risk can be more efficient and we can make the system far more efficient by cutting out all of this overhead and red tape. As long as the banks are properly disincentivized in other ways from being over-leveraged and taking too much risk, this arrangement would just be much better overall.
  - mitthrowaway2 4y ago
    This is a simplification, but: the bank should have to offer depositors an interest rate (or other value-add, such as competitive services) that makes it worth their while to trust the bank with their deposits. A bank that makes very conservative investments/loans can only offer a low interest rate to depositors, because they earn less profit on the spread, but their depositors will accept it because of the safety of the institution. A bank that makes speculative investments/loans can offer a high interest rate to depositors, because they earn enough to offer it, and they'll need to, to attract depositors away from the safer conservative institutions. A bank that can offer a government-backed guarantee to depositors can offer a low interest rate while making big profits, and pay big dividends to their shareholders and executives, steal market share from their conservative competitors while making themselves more systemically essential in the process, and leave the public on the hook if they fail.
    - ProjectArcturis 4y ago
      If you allow banks to make extremely speculative investments with depositor money, you end up with Ponzi-like behavior that ultimately hurts unsophisticated retail folks. Just like all the crypto "banks" offering 20% staking that are collapsing now. All you've described is a way to build a pitfall for naive investors so they can lose the first $20k they've ever saved.
  - AlbertCory 4y ago
    As I read his post, he's talking about punishing the bank executives as much as the depositors. So, clawing back every penny they took for doing sound risk management while not actually doing it is totally fair.
- HWR_14 4y ago
  Their 2021 bonuses? What about their 2022 bonuses that were paid our hours before the feds took over the bank.
moffkalast 4y ago
You mean those executives that sold their shares of the bank weeks before, ending up with with fat stacks and completely unaffected? Yeah I kinda doubt they'll get what's coming to them unfortunately. Insider trading's only a crime when it's poor people doing it.
- DANmode 4y ago
  Not entire, but enough to raise eyebrows, IIRC
- mgraczyk 4y ago
  Do you think punishing depositors would disincentivize those executives? And do you have any examples of poor people being charged with insider trading? Every case I have seen is rich people trading.
  - moffkalast 4y ago
    Probably not, but it is rather exhausting to see this happen again and again and seeing them get bailed out without consequences every time. At least something would be different. Maybe it's just hearsay but it feels like every person on wallstreetbets who got lucky with options then got the IRS knocking on their door accusing them of everything in the book. They've said it themselves that with the cost cutting in last decades they don't have the resources to build cases against large players anymore. They go after people they can reliably force to pay up without having to fight them too much. Al Capone would've gotten off scot free in today's world, just like most of congress does despite singlehandedly outperforming the best index funds out there.
    - mgraczyk 4y ago
      That's tax evasion, not insider trading.
    - creato 4y ago
      I can’t believe anyone would put any stock in such “evidence”. No one is going to say “yeah, I pushed the limits of tax filing and got busted, nice catch IRS”. They’re going to say “I was just minding my own business when the IRS robbed me with their machine guns”.
hn_throwaway_99 4y ago
I mostly agree with this, but I feel like the past 25 years or so, ever since "the Greenspan put", has just gone more and more in the direction of telling people that they don't need to worry about doing adequate risk assessments, because if you have powerful people that yell loud enough, and you can cause enough damage, that Washington will come to the rescue. Eventually, I just don't see this ending well. As someone who is naturally risk averse, I feel like a sucker. I was having a conversation in a separate thread where someone remarked "How can you expect startup companies to spread their deposits across multiple banks?" Besides the fact that there are tons of account structures specifically set up to do that, as an individual, I know what these insurance limits are and have moved assets around accordingly (for me, FDIC limits weren't relevant but SIPC limits were). How much time I wasted. I should have just gone with a powerful enough institution that I knew would get bailed out if they ever failed. I certainly won't waste my time doing this again, which is probably not the follow-on effect that the feds want.
- 0xB31B1B 4y ago
  The decisions about "is this bank adequately capitalized to serve its depositors" should be made by the regulators, not by the market. We know what it takes to run a bank safely, and its really easy to both quantify and test. This is how the "too big to fail" banks are run today. No one talks about the moral hazard of elevators (make sure you inspect it before you get on) or airplanes (make sure you do your own pre flight check) we trust that the regulators have set up processes that make this infrastructure safe for the public to use. Even with a deposit guarantee, a poorly run bank can still be closed by regulators, a bank run doesn't need to happen for a bank to be shut down, just like an elevator accident doesn't need to happen to decertify an elevator in a building.
  - zupreme 4y ago
    Consider: “Reserve requirements are a tool used by the central bank to increase or decrease the money supply in the economy and influence interest rates. Reserve requirements are currently set at ZERO as a response to the COVID-19 pandemic.” ref: https://www.investopedia.com/terms/r/requiredreserves.asp https://www.investopedia.com/terms/r/requiredreserves.asp
nateburke 4y ago
They should claw back SVB CEO pay and televise the moment the funds move. Show the CEOs number going down and some other public number going up. Bonus points if his face is televised at that moment at well That's all that's really necessary in terms of handling moral hazard and public perception that this is yet another bailout. Let ppl see the CEO suffer and they will be fine with having taxes foot the bailout bill. It's sad but a spectacle is necessary here.
- mgraczyk 4y ago
  Do you think software engineers who write bugs should also be publicly humiliated? Should your bonus be clawed back if you tech lead a project that ends up failing because of bugs?
  - cowl 4y ago
    If your bug ends up risking the economy of the country definitly yes. But Public Humiliation is not the solution because if it worked we ould not have the same executives who failed LB fail yet another Bank. There should be Legal conseguences for this type of mismanagement.
  - tome 4y ago
    If I put at risk the financial stability of the United States, then yes.
  - pishpash 4y ago
    It's a plausible position to take.
  - ClumsyPilot 4y ago
    Do you think doctors should be responsible for patient deaths? What of they killed the patient out of negligence, and they were drunk on the job? These people can be high, drunk and negligent simultaneouslyHl, and they are still untouchable.
  - cjbprime 4y ago
    In the other professions which use the title "engineer", all of these are commonplace.
thefounder 4y ago
>> and senior management are going to get wiped out and fired. Yeah, let's punish the management like we did in 2008... "SVB executive was Lehman Brothers CFO prior to 2008 collapse" https://m.economictimes.com/news/international/business/svb-executive-was-lehman-brothers-cfo-prior-to-2008-collapse/amp_articleshow/98588385.cms https://m.economictimes.com/news/international/business/svb-...
- cronix 4y ago
  And to really punish him, we shall strip him of his "Class A" shareholder status at San Francisco FED. https://www.bloomberg.com/news/articles/2023-03-11/svb-ceo-becker-removed-from-sf-fed-s-board-after-bank-s-failure https://www.bloomberg.com/news/articles/2023-03-11/svb-ceo-b... But not before we let him cash in $3.6M in stock. https://www.forbes.com/sites/brianbushard/2023/03/10/svb-financial-ceo-sold-36-million-in-stock-before-banks-collapse/?sh=652b8a2e4b2a https://www.forbes.com/sites/brianbushard/2023/03/10/svb-fin... Let this be a lesson to all of you other banks.
- gizmondo 4y ago
  Look, it's a meme, you're not supposed to take them seriously. The guy is an executive at SVB Securities, a separate branch that is completely fine.
- ProjectArcturis 4y ago
  He didn't work at the part of Lehman that failed, and he didn't work at the part of SVB that failed.
lxm 4y ago
In finance there's a lot of employee transition right after bonuses are dished out, and incidentally SVB just delivered theirs https://www.cnbc.com/2023/03/11/silicon-valley-bank-employees-received-bonuses-hours-before-takeover.html https://www.cnbc.com/2023/03/11/silicon-valley-bank-employee...
hayst4ck 4y ago
By game theory, if you let sinners prosper, you will produce more sinners. In the most pure sense not punishing the sinful is wrong, always. That misses the point that it is possible to both help everyone and punish the sinners. Here is a game I recommend that you play: https://ncase.me/trust/ https://ncase.me/trust/ I think it gives a great explanation why what you are saying in good faith is not quite right. Not punishing the sinful both pushes the problem into the future and makes it bigger.
- moose_is_loose 4y ago
  https://twitter.com/petercontibrown/status/1635076092339052545 https://twitter.com/petercontibrown/status/16350760923390525...
  - hayst4ck 4y ago
    > Point is that a system of such asymmetries rewards so many at public cost - and that includes the other stakeholders who are today “wiped out” (but still get to keep their gains from the good years). /end Yep, and that is exactly the point. They must not get to keep their gains and they must lose an additional amount proportional to their chance of success. The expected value of corruption must be negative.
- mgraczyk 4y ago
  We tried it your way many times, and it failed in every case (civil war reconstruction, Treaty of Versailles, Iraq provisional authority, response to the great depression, etc). When we do the other thing and focus on protecting the innocent instead of punishing the guilty, things have worked out far better (Marshall Plan, Covid response, this).
  - hellojesus 4y ago
    Have you considered the covid response openly violated the Constitution's 5th Ammendment? The gov shut down businesses for the public good (took private property) without just compensation. And what marginal compensation was offered was done so through PPP and was corruptly incentivized. I would describe the covid response as anything but working out well.
JumpCrisscross 4y ago
> sometimes it's better to make prudent decisions that help everyone instead of attempting to punish the sinful I'm conflicted about this. In the last seventy-two hours, I made a ridiculous amount of money standing still because risks that shouldn't have paid are being done so by people who shouldn't have to pay them. I personally benefit. But we've given tech companies a visible privilege American farms, factories and municipalities don't enjoy. T
- celticninja 4y ago
  It's the old saying, if you owe the bank a million dollars you have a problem, if you owe the bank $100m then the bank has a problem.
akrymski 4y ago
Except the CEO and Chief Risk Officer already cashed out a year ago.
freejazz 4y ago
Didn't one of their execs work at lehman and arthur anderson?
harimau777 4y ago
I think that's fine as long as you are willing to then help anyone in that situation in the future. Not just people who are big enough to be "important".
HWR_14 4y ago
Senior management is going to have their recent sales of millions of dollars and significant percentages of their stock and the bonuses they received hours before the FDIC took over reversed? Because otherwise they weren't really "wiped out" or even close to it.
checkcircuits 4y ago
> Keep in mind that bank shareholders and senior management are going to get wiped out and fired. And do the same thing again. Wasn't the CEO ex-Lehman?

deleted 4y ago

[deleted]

hypothesis 4y ago

>senior management are going to get wiped out and fired Wasn’t one of executives working at Lehman Brothers or some such before? This is just failing upwards and doing same thing.

mitthrowaway2 4y ago

"Punishing the sinful" isn't about morals, it's about incentives, and ensuring a level playing field where sinning doesn't improve your long-term competitiveness. Will senior management have to return their 2021 performance bonuses? If not, successful sinning is just a matter of ensuring you cash out early.

mgraczyk 4y ago
Who are you trying to disincentivize? How would it dissuade the bank's management if depositors took a haircut? What behavior do you think punishing depositors would prevent? Do you think depositors should hire an accountant and economist to review their bank's balance sheet every quarter?
- Uvix 4y ago
  If they have more than $250K in the one institution: yes, they should. Better yet would be spreading their deposits around, but if they don't want to do that, they should take the necessary steps to evaluate the risk appropriately.
  - mgraczyk 4y ago
    Ok but that's a bad policy that makes no sense and I'm glad the fed, Treasury, and FDIC are stepping in to change it. Sad that congress hasn't done anything over the past few years, but better the problem be solved than letting faith in our financial system collapse.
    - rashkov 4y ago
      It does seem like a weird loophole and charade to have to split money among many banks. Just give businesses a way to store their money without earning interest and with no risk. As far as I know that’s not an option under our banking system
      - amalcon 4y ago
        It's neither a loophole nor a charade: it's diversification to reduce exposure to risk. Bank failures are somewhat coordinated, sure. Still, it's much more likely that one bank fails than N>1 banks. Since you are exposed to less risk, your insurer (FDIC) is also exposed to less risk. It makes complete sense for the insurer to incentivize this sort of behavior.
        ProjectArcturis 4y ago
        But what it really incentivizes is putting all your money in a too-big-to-fail bank. That's much easier and just as safe as opening a dozen, or hundreds of accounts. And it results in there being 3 banks in the whole country.
        politician 4y ago
        There is, in truth, only one “bank” in this country. The Federal Reserve Banks that hold the master ledger for the official US Dollar market. Everything else downstream is basically redundant legacy infrastructure from a time before pervasive broadband network infrastructure.
- hn_throwaway_99 4y ago
  > Do you think depositors should hire an accountant and economist to review their bank's balance sheet every quarter? Basically, yes, but without the hyperbole - an accountant yes, an economist no. This is not that hard. Treasury management is a specific function of any company. I definitely don't blame these startups for not being financial experts, but VCs absolutely should have been coaching their client companies how to manage their cash safely.
  - mgraczyk 4y ago
    Imagine what the world would look like if you got what you're asking for. Tens of thousands of extra dollars of overhead to open a bank account? To save literally nothing directly for taxpayers, and a few dollars per account for banks? I would strongly prefer to he socialized insurance and safety net in this case, and I'm a die hard capitalist.
    - hn_throwaway_99 4y ago
      You seem to think that the world doesn't already work like this. There are tons [1] of [2] products [3] that are offered specifically to make it easy to spread cash around at multiple institutions. And that in and of it self is beneficial, because it is essentially diversifying the risk of those deposits. Now, with what the fed has done, why would anyone bother spreading their risk around? 1. https://www.intrafinetworkdeposits.com/ https://www.intrafinetworkdeposits.com/ 2. https://www.wintrust.com/maxsafe.html https://www.wintrust.com/maxsafe.html 3. https://www.moneycrashers.com/cash-management-account/ https://www.moneycrashers.com/cash-management-account/
      - creato 4y ago
        Seems like the FDIC is achieving the exact same outcome with a lot less hassle and overhead for everyone.
        naasking 4y ago
        I think this is exactly it. More and more this arrangement is starting to sound like the baseless justification used for US healthcare: a bunch of middle men milking value for little actual benefit. Addressing risk can be more efficient and we can make the system far more efficient by cutting out all of this overhead and red tape. As long as the banks are properly disincentivized in other ways from being over-leveraged and taking too much risk, this arrangement would just be much better overall.
- mitthrowaway2 4y ago
  This is a simplification, but: the bank should have to offer depositors an interest rate (or other value-add, such as competitive services) that makes it worth their while to trust the bank with their deposits. A bank that makes very conservative investments/loans can only offer a low interest rate to depositors, because they earn less profit on the spread, but their depositors will accept it because of the safety of the institution. A bank that makes speculative investments/loans can offer a high interest rate to depositors, because they earn enough to offer it, and they'll need to, to attract depositors away from the safer conservative institutions. A bank that can offer a government-backed guarantee to depositors can offer a low interest rate while making big profits, and pay big dividends to their shareholders and executives, steal market share from their conservative competitors while making themselves more systemically essential in the process, and leave the public on the hook if they fail.
  - ProjectArcturis 4y ago
    If you allow banks to make extremely speculative investments with depositor money, you end up with Ponzi-like behavior that ultimately hurts unsophisticated retail folks. Just like all the crypto "banks" offering 20% staking that are collapsing now. All you've described is a way to build a pitfall for naive investors so they can lose the first $20k they've ever saved.
- AlbertCory 4y ago
  As I read his post, he's talking about punishing the bank executives as much as the depositors. So, clawing back every penny they took for doing sound risk management while not actually doing it is totally fair.
HWR_14 4y ago
Their 2021 bonuses? What about their 2022 bonuses that were paid our hours before the feds took over the bank.

moffkalast 4y ago

You mean those executives that sold their shares of the bank weeks before, ending up with with fat stacks and completely unaffected? Yeah I kinda doubt they'll get what's coming to them unfortunately. Insider trading's only a crime when it's poor people doing it.

DANmode 4y ago
Not entire, but enough to raise eyebrows, IIRC
mgraczyk 4y ago
Do you think punishing depositors would disincentivize those executives? And do you have any examples of poor people being charged with insider trading? Every case I have seen is rich people trading.
- moffkalast 4y ago
  Probably not, but it is rather exhausting to see this happen again and again and seeing them get bailed out without consequences every time. At least something would be different. Maybe it's just hearsay but it feels like every person on wallstreetbets who got lucky with options then got the IRS knocking on their door accusing them of everything in the book. They've said it themselves that with the cost cutting in last decades they don't have the resources to build cases against large players anymore. They go after people they can reliably force to pay up without having to fight them too much. Al Capone would've gotten off scot free in today's world, just like most of congress does despite singlehandedly outperforming the best index funds out there.
  - mgraczyk 4y ago
    That's tax evasion, not insider trading.
  - creato 4y ago
    I can’t believe anyone would put any stock in such “evidence”. No one is going to say “yeah, I pushed the limits of tax filing and got busted, nice catch IRS”. They’re going to say “I was just minding my own business when the IRS robbed me with their machine guns”.

hn_throwaway_99 4y ago

I mostly agree with this, but I feel like the past 25 years or so, ever since "the Greenspan put", has just gone more and more in the direction of telling people that they don't need to worry about doing adequate risk assessments, because if you have powerful people that yell loud enough, and you can cause enough damage, that Washington will come to the rescue. Eventually, I just don't see this ending well. As someone who is naturally risk averse, I feel like a sucker. I was having a conversation in a separate thread where someone remarked "How can you expect startup companies to spread their deposits across multiple banks?" Besides the fact that there are tons of account structures specifically set up to do that, as an individual, I know what these insurance limits are and have moved assets around accordingly (for me, FDIC limits weren't relevant but SIPC limits were). How much time I wasted. I should have just gone with a powerful enough institution that I knew would get bailed out if they ever failed. I certainly won't waste my time doing this again, which is probably not the follow-on effect that the feds want.

0xB31B1B 4y ago
The decisions about "is this bank adequately capitalized to serve its depositors" should be made by the regulators, not by the market. We know what it takes to run a bank safely, and its really easy to both quantify and test. This is how the "too big to fail" banks are run today. No one talks about the moral hazard of elevators (make sure you inspect it before you get on) or airplanes (make sure you do your own pre flight check) we trust that the regulators have set up processes that make this infrastructure safe for the public to use. Even with a deposit guarantee, a poorly run bank can still be closed by regulators, a bank run doesn't need to happen for a bank to be shut down, just like an elevator accident doesn't need to happen to decertify an elevator in a building.
- zupreme 4y ago
  Consider: “Reserve requirements are a tool used by the central bank to increase or decrease the money supply in the economy and influence interest rates. Reserve requirements are currently set at ZERO as a response to the COVID-19 pandemic.” ref: https://www.investopedia.com/terms/r/requiredreserves.asp https://www.investopedia.com/terms/r/requiredreserves.asp

nateburke 4y ago

They should claw back SVB CEO pay and televise the moment the funds move. Show the CEOs number going down and some other public number going up. Bonus points if his face is televised at that moment at well That's all that's really necessary in terms of handling moral hazard and public perception that this is yet another bailout. Let ppl see the CEO suffer and they will be fine with having taxes foot the bailout bill. It's sad but a spectacle is necessary here.

mgraczyk 4y ago
Do you think software engineers who write bugs should also be publicly humiliated? Should your bonus be clawed back if you tech lead a project that ends up failing because of bugs?
- cowl 4y ago
  If your bug ends up risking the economy of the country definitly yes. But Public Humiliation is not the solution because if it worked we ould not have the same executives who failed LB fail yet another Bank. There should be Legal conseguences for this type of mismanagement.
- tome 4y ago
  If I put at risk the financial stability of the United States, then yes.
- pishpash 4y ago
  It's a plausible position to take.
- ClumsyPilot 4y ago
  Do you think doctors should be responsible for patient deaths? What of they killed the patient out of negligence, and they were drunk on the job? These people can be high, drunk and negligent simultaneouslyHl, and they are still untouchable.
- cjbprime 4y ago
  In the other professions which use the title "engineer", all of these are commonplace.

thefounder 4y ago

>> and senior management are going to get wiped out and fired. Yeah, let's punish the management like we did in 2008... "SVB executive was Lehman Brothers CFO prior to 2008 collapse" https://m.economictimes.com/news/international/business/svb-executive-was-lehman-brothers-cfo-prior-to-2008-collapse/amp_articleshow/98588385.cms https://m.economictimes.com/news/international/business/svb-...

cronix 4y ago
And to really punish him, we shall strip him of his "Class A" shareholder status at San Francisco FED. https://www.bloomberg.com/news/articles/2023-03-11/svb-ceo-becker-removed-from-sf-fed-s-board-after-bank-s-failure https://www.bloomberg.com/news/articles/2023-03-11/svb-ceo-b... But not before we let him cash in $3.6M in stock. https://www.forbes.com/sites/brianbushard/2023/03/10/svb-financial-ceo-sold-36-million-in-stock-before-banks-collapse/?sh=652b8a2e4b2a https://www.forbes.com/sites/brianbushard/2023/03/10/svb-fin... Let this be a lesson to all of you other banks.
gizmondo 4y ago
Look, it's a meme, you're not supposed to take them seriously. The guy is an executive at SVB Securities, a separate branch that is completely fine.
ProjectArcturis 4y ago
He didn't work at the part of Lehman that failed, and he didn't work at the part of SVB that failed.

lxm 4y ago

In finance there's a lot of employee transition right after bonuses are dished out, and incidentally SVB just delivered theirs https://www.cnbc.com/2023/03/11/silicon-valley-bank-employees-received-bonuses-hours-before-takeover.html https://www.cnbc.com/2023/03/11/silicon-valley-bank-employee...

hayst4ck 4y ago

By game theory, if you let sinners prosper, you will produce more sinners. In the most pure sense not punishing the sinful is wrong, always. That misses the point that it is possible to both help everyone and punish the sinners. Here is a game I recommend that you play: https://ncase.me/trust/ https://ncase.me/trust/ I think it gives a great explanation why what you are saying in good faith is not quite right. Not punishing the sinful both pushes the problem into the future and makes it bigger.

moose_is_loose 4y ago
https://twitter.com/petercontibrown/status/1635076092339052545 https://twitter.com/petercontibrown/status/16350760923390525...
- hayst4ck 4y ago
  > Point is that a system of such asymmetries rewards so many at public cost - and that includes the other stakeholders who are today “wiped out” (but still get to keep their gains from the good years). /end Yep, and that is exactly the point. They must not get to keep their gains and they must lose an additional amount proportional to their chance of success. The expected value of corruption must be negative.
mgraczyk 4y ago
We tried it your way many times, and it failed in every case (civil war reconstruction, Treaty of Versailles, Iraq provisional authority, response to the great depression, etc). When we do the other thing and focus on protecting the innocent instead of punishing the guilty, things have worked out far better (Marshall Plan, Covid response, this).
- hellojesus 4y ago
  Have you considered the covid response openly violated the Constitution's 5th Ammendment? The gov shut down businesses for the public good (took private property) without just compensation. And what marginal compensation was offered was done so through PPP and was corruptly incentivized. I would describe the covid response as anything but working out well.

JumpCrisscross 4y ago

> sometimes it's better to make prudent decisions that help everyone instead of attempting to punish the sinful I'm conflicted about this. In the last seventy-two hours, I made a ridiculous amount of money standing still because risks that shouldn't have paid are being done so by people who shouldn't have to pay them. I personally benefit. But we've given tech companies a visible privilege American farms, factories and municipalities don't enjoy. T

celticninja 4y ago
It's the old saying, if you owe the bank a million dollars you have a problem, if you owe the bank $100m then the bank has a problem.

akrymski 4y ago

Except the CEO and Chief Risk Officer already cashed out a year ago.

freejazz 4y ago

Didn't one of their execs work at lehman and arthur anderson?

harimau777 4y ago

I think that's fine as long as you are willing to then help anyone in that situation in the future. Not just people who are big enough to be "important".

HWR_14 4y ago

Senior management is going to have their recent sales of millions of dollars and significant percentages of their stock and the bonuses they received hours before the FDIC took over reversed? Because otherwise they weren't really "wiped out" or even close to it.

checkcircuits 4y ago

> Keep in mind that bank shareholders and senior management are going to get wiped out and fired. And do the same thing again. Wasn't the CEO ex-Lehman?