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I would add, it's just hilarious to see so many claim "it's not a bailout because shareholders were wiped out!" Everyone knows bailouts are bad, and that peopl

I would add, it's just hilarious to see so many claim "it's not a bailout because shareholders were wiped out!" Everyone knows bailouts are bad, and that people shouldn't rely on them. But they want their money, so of course _their_ protection isn't a "bailout". It's just . . . depositors made whole! Yah. A "bailout" is any injection that makes whole any interested party facing losses. As in "The depositors were bailed out". The hypocrisy around this is really disappointing.

phailhaus 4y ago
I don't understand. You think the depositors should be punished for...trusting SVB? Do you expect every startup to run their own little hedge fund to manage their cash?
- xdennis 4y ago
  It's not punishment. You know that when you put your money in a bank there's a change you won't get it back. That's why you're supposed to pick a bank you're okay with. That's how it is with everything. If a farmer plants some crops but it drops in price to the point it's completely unprofitable, is he being punished for growing food? Does the government bail him out?
  - zamnos 4y ago
    Ah I mean if you really want to get into farming, farmers get paid by the US government and your taxes to not grow things.
  - phailhaus 4y ago
    That's not a great analogy. The farmer is the bank in our case, and yes, it is going under. It should. The question is, should all these local grocers go under too because they had exclusive relationships with that farmer? Some would say yes, they should have diversified their base of farmers. I've learned that "insured sweep accounts" are something that should be used by startups to insure them for more than 250k.
- CyanBird 4y ago
  > expect every startup to run Yes It is the most basic of business tenets to do risk assessment on strategic company decisions to reduce exposure to risk I am sorry you are offended by the fact that I look down on you for your lack of business competence. I used to expect better of people managing hundreds of millions of usd in capital, but I guess not It is due time for Silicon Valley to face some financial discipline
  - deleted 4y ago
    [deleted]
  - phailhaus 4y ago
    > I am sorry you are offended by the fact that I look down on you for your lack of business competence. This is such a weird thing to say, you know that right? I wasn't even talking to you.
- argc 4y ago
  Agreed, in the abstract the system is better if people and businesses are more protected from events that are out of their control. The argument that the system should punish people for not risk averse enough to protect themselves against bank failures is like saying that languages with type checking are bad because they make soft programmers who can't protect themselves, even though the safer system is easier to use, and allows its users to focus on different, more important/business relevant problems.
- matheusmoreira 4y ago
  > You think the depositors should be punished for...trusting SVB? Yes. > Do you expect every startup to run their own little hedge fund to manage their cash? I expect them not to trust banks.
  - weixiyen 4y ago
    There's some countries that work like what you propose. Those are not the countries Americans are flocking to for good reason.
- klabb3 4y ago
  > Do you expect every startup to run their own little hedge fund to manage their cash? Don’t startups already follow the standard model of whatever the VCs say is the right way to do it? As in—there’s a tremendous amount of cargo culting, no? Or perhaps that the banks specifically require an exclusive deal. In either case, not an unsolvable problem.
  - americafun 4y ago
    ofc. VC just tells the startup exactly what to do. It's funny how all these techies cant apply their own best development principles (e.g use sensible defaults) to real life. IYI
Aperocky 4y ago
The depositors didn't make the decision to turn deposits into low interest long term bonds, and hold it after interest rates have risen. They are at best a innocent party with slightly less awareness. If a drunk driver is doing 120 mph on a freeway and crashed into a normal motorist and sent him to the hospital. The right argument or response isn't that he should've seen it coming in the rare view mirror and moved a lane over.
- matheusmoreira 4y ago
  > The depositors didn't make the decision to turn deposits into low interest long term bonds, and hold it after interest rates have risen. They lent their money to the bank. They are absolutely responsible.
  - Aperocky 4y ago
    To a degree yes, you're absolutely correct. That social model also brings great depression as a feature, and we decided to moved away from it because great depression bad.
    - matheusmoreira 4y ago
      Moved away from 1929 straight to 2008.
      - Aperocky 4y ago
        > Between 1929 and 1932, worldwide gross domestic product (GDP) fell by an estimated 15%. By comparison, worldwide GDP fell by less than 1% from 2008 to 2009 during the Great Recession. > The Great Depression/Peak global unemployment 24.9% 1933 > Great Recession/Peak global unemployment 10% Oct 2009 Not even closely comparable, thank you for nominating cases as to why the new model is superior.

phailhaus 4y ago

I don't understand. You think the depositors should be punished for...trusting SVB? Do you expect every startup to run their own little hedge fund to manage their cash?

xdennis 4y ago
It's not punishment. You know that when you put your money in a bank there's a change you won't get it back. That's why you're supposed to pick a bank you're okay with. That's how it is with everything. If a farmer plants some crops but it drops in price to the point it's completely unprofitable, is he being punished for growing food? Does the government bail him out?
- zamnos 4y ago
  Ah I mean if you really want to get into farming, farmers get paid by the US government and your taxes to not grow things.
- phailhaus 4y ago
  That's not a great analogy. The farmer is the bank in our case, and yes, it is going under. It should. The question is, should all these local grocers go under too because they had exclusive relationships with that farmer? Some would say yes, they should have diversified their base of farmers. I've learned that "insured sweep accounts" are something that should be used by startups to insure them for more than 250k.
CyanBird 4y ago
> expect every startup to run Yes It is the most basic of business tenets to do risk assessment on strategic company decisions to reduce exposure to risk I am sorry you are offended by the fact that I look down on you for your lack of business competence. I used to expect better of people managing hundreds of millions of usd in capital, but I guess not It is due time for Silicon Valley to face some financial discipline
- deleted 4y ago
  [deleted]
- phailhaus 4y ago
  > I am sorry you are offended by the fact that I look down on you for your lack of business competence. This is such a weird thing to say, you know that right? I wasn't even talking to you.
argc 4y ago
Agreed, in the abstract the system is better if people and businesses are more protected from events that are out of their control. The argument that the system should punish people for not risk averse enough to protect themselves against bank failures is like saying that languages with type checking are bad because they make soft programmers who can't protect themselves, even though the safer system is easier to use, and allows its users to focus on different, more important/business relevant problems.
matheusmoreira 4y ago
> You think the depositors should be punished for...trusting SVB? Yes. > Do you expect every startup to run their own little hedge fund to manage their cash? I expect them not to trust banks.
- weixiyen 4y ago
  There's some countries that work like what you propose. Those are not the countries Americans are flocking to for good reason.
klabb3 4y ago
> Do you expect every startup to run their own little hedge fund to manage their cash? Don’t startups already follow the standard model of whatever the VCs say is the right way to do it? As in—there’s a tremendous amount of cargo culting, no? Or perhaps that the banks specifically require an exclusive deal. In either case, not an unsolvable problem.
- americafun 4y ago
  ofc. VC just tells the startup exactly what to do. It's funny how all these techies cant apply their own best development principles (e.g use sensible defaults) to real life. IYI

Aperocky 4y ago

The depositors didn't make the decision to turn deposits into low interest long term bonds, and hold it after interest rates have risen. They are at best a innocent party with slightly less awareness. If a drunk driver is doing 120 mph on a freeway and crashed into a normal motorist and sent him to the hospital. The right argument or response isn't that he should've seen it coming in the rare view mirror and moved a lane over.

matheusmoreira 4y ago
> The depositors didn't make the decision to turn deposits into low interest long term bonds, and hold it after interest rates have risen. They lent their money to the bank. They are absolutely responsible.
- Aperocky 4y ago
  To a degree yes, you're absolutely correct. That social model also brings great depression as a feature, and we decided to moved away from it because great depression bad.
  - matheusmoreira 4y ago
    Moved away from 1929 straight to 2008.
    - Aperocky 4y ago
      > Between 1929 and 1932, worldwide gross domestic product (GDP) fell by an estimated 15%. By comparison, worldwide GDP fell by less than 1% from 2008 to 2009 during the Great Recession. > The Great Depression/Peak global unemployment 24.9% 1933 > Great Recession/Peak global unemployment 10% Oct 2009 Not even closely comparable, thank you for nominating cases as to why the new model is superior.