8 ms·

> it's threatening the quality of life of a certain class of people. Like the jerks who chose to work for a company that picked a specific SaaS payroll provide

by mike_d 4y ago

> it's threatening the quality of life of a certain class of people. Like the jerks who chose to work for a company that picked a specific SaaS payroll provider. Or those entitled Etsy sellers that expected to get paid. The absolute nerve.

dmichulke 4y ago
What OP might mean: Technically, your "jerks" don't lose capital (wealth) while the people with deposits in those banks do. Yes, losing a job is a bad thing but a job is a mere right to a transaction (we exchange labor for money in the future) and not lost capital.
- codeddesign 4y ago
  It’s the fed protecting a bank with a large financial interest. This isn’t the last bank this year…but one of few that will be protected.
  - feraloink 4y ago
    How fair is that? You aren't suggesting that it is fair, I realize. And you are correct! Silicon Valley Bank was the first bank this year for whom the Fed is paying for uninsured deposits. The second bank is Signature Bank of New York, which regulators shut down one day later, on Friday March 10th. They are being protected as well. https://www.nytimes.com/2023/03/12/business/signature-bank-collapse.html https://www.nytimes.com/2023/03/12/business/signature-bank-c...
fumeux_fume 4y ago
The money isnt going directly to the workers. It goes to the companies who employ them to make sure the employers are ok. I think the point being made is that when workers ask for protections or concessions it's this massive struggle but when Etsy needs help the money somehow appears literally overnight.
- brazzy 4y ago
  What you're glossing over is that when the employers suddenly lose most or all of their liquid assets and don't have perfect positive cash flow, then they cannot pay their employees.
  - watwut 4y ago
    This is not about salaries to employees or risk of companies dying. Neither of those get help when they are unlucky on free market.
    - brazzy 4y ago
      You can spin "what this is about" whatever way you want, but it's simply a fact that for the kind of businesses that typically had deposits at SVB, the overwhelming part of those deposits existed to pay employee's salaries.
      - watwut 4y ago
        Yep. And when other business can not pay salaries because of events they could not control, neither them nor their employees get any extra help. They get mockery from very same people that call for help now. This is about who got it. The startups did not had all of their money in this particular bank randomly. It was by design.
        sokoloff 4y ago
        What was the PPP “loan” program if not a direct example of what you claim doesn’t exist?
        hellojesus 4y ago
        A corrupt program that incentivized banks to finance the largest sums first, which of course were only demanded by the largest companies, and ended up running out of funds by the time the small players got their turn in line. It was a sad attempt at preventing a 5th Ammendment violation, and it was done so poorly that it didn't solve the issue. The 5th was still violated.
codeddesign 4y ago
We don’t live in a socialist society. These companies chose not to diversify their risk. If they didn’t know their accounts had a max insurance rating of $250k, then they deserve to fold. FDIC insurance is intended for consumers not to be instantly without. If you are a corporation, you are responsible for you own financial risk. 9 banks have failed in the last 5 years. The fed is treating this special and that’s why it’s an issue. Essentially they are telling the public “as long as you are with a large bank that holds large assets, we will protect you”.
- initplus 4y ago
  They are treating it differently because the alternative is a run on every small/medium bank with high numbers of business customers. It’s not to protect the existing depositors of SVB - but to shore up the stability of the entire banking sector.
  - pdpi 4y ago
    The problem is that that shoring up comes at the cost of enabling bad behaviour. Banking right now seems to run on the assumption that you’re allowed to erode the stability of the system for your personal gain, because governments world-wide will shore it up from the other side. It’s important to remember that SVB lobbied hard to gain an exemption from banking stress test regulations. Their “inherently low risk” business clearly wasn’t, and they failed to defend against the inevitability that was the fed going up from the anomalously low rates of the 2010s.
    - initplus 4y ago
      What bad behaviour is being enabled here? The people who stand to gain from taking risks here (bank owners) have lost everything and are not being bailed out. What is the bad behaviour of the depositors? Trusting that their deposits were safe in a bank? This isn’t bad behaviour, the government wants people to think that bank deposits are safe. Safety of bank deposits is really important to the economy.
geocar 4y ago
I mean, yeah. Lots of people are starving and homeless for as trivial a "decision" as that. I'd much rather give everybody food and a home, including the Etsy seller, instead of: giving the bankers a ski jolly, people still starving and homeless, less this Etsy seller. Why can't we do that? Some of those entitled Etsy sellers voted against everybody having food and a home; My heart breaks, but not as much for those who have and hate. Maybe now that they are hungry and homeless too they will be a little more sympathetic. Surely that would be best.
- raspberry1337 4y ago
  What a weird post. >Lots of people are starving and homeless for as trivial a "decision" as that. Most homeless are either severely mentally ill, drug addicted, usually both. >I'd much rather give everybody food and a home, including the Etsy seller, instead of: giving the bankers a ski jolly, people still starving and homeless, less this Etsy seller. Why can't we do that? You could be running a soup kitchen homeless shelter right now instead of posting on HN. It's always someone elses fault! >Some of those entitled Etsy sellers voted against everybody having food and a home; Great analysis and input - if we would all vote x, everybody would have food and home, problem sovled!
- justsayinstuff 4y ago
  Rather than prop up a bank that support x number of businesses that support y number employees, you'd had the government prop up xy employees? For how long? And if another z number of banks fail? Support xyz employees?
  - geocar 4y ago
    Yes. Forever. Yes those too. All of them. I live in a socialist European country, but I'm originally from the USA, and I wish it was better there.
    - ameister14 4y ago
      I was unaware that there were any socialist countries in Europe. Where do you live?

by mike_d 4y ago

dmichulke 4y ago

What OP might mean: Technically, your "jerks" don't lose capital (wealth) while the people with deposits in those banks do. Yes, losing a job is a bad thing but a job is a mere right to a transaction (we exchange labor for money in the future) and not lost capital.

codeddesign 4y ago
It’s the fed protecting a bank with a large financial interest. This isn’t the last bank this year…but one of few that will be protected.
- feraloink 4y ago
  How fair is that? You aren't suggesting that it is fair, I realize. And you are correct! Silicon Valley Bank was the first bank this year for whom the Fed is paying for uninsured deposits. The second bank is Signature Bank of New York, which regulators shut down one day later, on Friday March 10th. They are being protected as well. https://www.nytimes.com/2023/03/12/business/signature-bank-collapse.html https://www.nytimes.com/2023/03/12/business/signature-bank-c...

fumeux_fume 4y ago

The money isnt going directly to the workers. It goes to the companies who employ them to make sure the employers are ok. I think the point being made is that when workers ask for protections or concessions it's this massive struggle but when Etsy needs help the money somehow appears literally overnight.

brazzy 4y ago
What you're glossing over is that when the employers suddenly lose most or all of their liquid assets and don't have perfect positive cash flow, then they cannot pay their employees.
- watwut 4y ago
  This is not about salaries to employees or risk of companies dying. Neither of those get help when they are unlucky on free market.
  - brazzy 4y ago
    You can spin "what this is about" whatever way you want, but it's simply a fact that for the kind of businesses that typically had deposits at SVB, the overwhelming part of those deposits existed to pay employee's salaries.
    - watwut 4y ago
      Yep. And when other business can not pay salaries because of events they could not control, neither them nor their employees get any extra help. They get mockery from very same people that call for help now. This is about who got it. The startups did not had all of their money in this particular bank randomly. It was by design.
      - sokoloff 4y ago
        What was the PPP “loan” program if not a direct example of what you claim doesn’t exist?
        hellojesus 4y ago
        A corrupt program that incentivized banks to finance the largest sums first, which of course were only demanded by the largest companies, and ended up running out of funds by the time the small players got their turn in line. It was a sad attempt at preventing a 5th Ammendment violation, and it was done so poorly that it didn't solve the issue. The 5th was still violated.

codeddesign 4y ago

We don’t live in a socialist society. These companies chose not to diversify their risk. If they didn’t know their accounts had a max insurance rating of $250k, then they deserve to fold. FDIC insurance is intended for consumers not to be instantly without. If you are a corporation, you are responsible for you own financial risk. 9 banks have failed in the last 5 years. The fed is treating this special and that’s why it’s an issue. Essentially they are telling the public “as long as you are with a large bank that holds large assets, we will protect you”.

initplus 4y ago
They are treating it differently because the alternative is a run on every small/medium bank with high numbers of business customers. It’s not to protect the existing depositors of SVB - but to shore up the stability of the entire banking sector.
- pdpi 4y ago
  The problem is that that shoring up comes at the cost of enabling bad behaviour. Banking right now seems to run on the assumption that you’re allowed to erode the stability of the system for your personal gain, because governments world-wide will shore it up from the other side. It’s important to remember that SVB lobbied hard to gain an exemption from banking stress test regulations. Their “inherently low risk” business clearly wasn’t, and they failed to defend against the inevitability that was the fed going up from the anomalously low rates of the 2010s.
  - initplus 4y ago
    What bad behaviour is being enabled here? The people who stand to gain from taking risks here (bank owners) have lost everything and are not being bailed out. What is the bad behaviour of the depositors? Trusting that their deposits were safe in a bank? This isn’t bad behaviour, the government wants people to think that bank deposits are safe. Safety of bank deposits is really important to the economy.

geocar 4y ago

I mean, yeah. Lots of people are starving and homeless for as trivial a "decision" as that. I'd much rather give everybody food and a home, including the Etsy seller, instead of: giving the bankers a ski jolly, people still starving and homeless, less this Etsy seller. Why can't we do that? Some of those entitled Etsy sellers voted against everybody having food and a home; My heart breaks, but not as much for those who have and hate. Maybe now that they are hungry and homeless too they will be a little more sympathetic. Surely that would be best.

raspberry1337 4y ago
What a weird post. >Lots of people are starving and homeless for as trivial a "decision" as that. Most homeless are either severely mentally ill, drug addicted, usually both. >I'd much rather give everybody food and a home, including the Etsy seller, instead of: giving the bankers a ski jolly, people still starving and homeless, less this Etsy seller. Why can't we do that? You could be running a soup kitchen homeless shelter right now instead of posting on HN. It's always someone elses fault! >Some of those entitled Etsy sellers voted against everybody having food and a home; Great analysis and input - if we would all vote x, everybody would have food and home, problem sovled!
justsayinstuff 4y ago
Rather than prop up a bank that support x number of businesses that support y number employees, you'd had the government prop up xy employees? For how long? And if another z number of banks fail? Support xyz employees?
- geocar 4y ago
  Yes. Forever. Yes those too. All of them. I live in a socialist European country, but I'm originally from the USA, and I wish it was better there.
  - ameister14 4y ago
    I was unaware that there were any socialist countries in Europe. Where do you live?