21 ms·

SVB shows that there are few libertarians in a financial foxhole

322 points by CaliforniaKarl 4y ago

cypherpunks01 4y ago
https://t.co/kw7ykC3763 https://t.co/kw7ykC3763 Without paywall courtesy of FT twitter post
- colpabar 4y ago
  So I'm assuming that's a link posted on twitter that includes some flag that prevents the site from paywalling the article? Neat. I'll still post a humble archive link as well. https://archive.is/6MBEL https://archive.is/6MBEL
  - cypherpunks01 4y ago
    Yes, FT's article links posted on twitter have a cool behavior where it bypasses paywall if you enter through the right Referer (I assume) Garnered from https://twitter.com/FT/status/1635265357048082435 https://twitter.com/FT/status/1635265357048082435 I like them for this, but I don't see a lot of other news outlets doing this. Most other places simply post links to their paywalled articles.
    - doodlesdev 4y ago
      It's just Google Tag Manager, that's also why if you have JavaScript disabled or ClearURLs (or similar) it won't work as they won't be able to see the UTM tag.
  - shagie 4y ago
    Chasing links... https://t.co/kw7ykC3763 returns a 301 to https://on.ft.com/3Jy8UBY https://on.ft.com/3Jy8UBY returns a 301 to https://ft.trib.al/b2FR72U https://ft.trib.al/b2FR72U returns a 301 to https://www.ft.com/content/ebba73d9-d319-4634-aa09-bbf09ee4a03b There's certainly some magic with going from the t.co link - going to the other two direct hit the paywall. :method: GET :scheme: https :authority: www.ft.com :path: /content/ebba73d9-d319-4634-aa09-bbf09ee4a03b {cookie with lots of stuff in it redacted} Accept: text/html,application/xhtml+xml,application/xml;q=0.9,*/*;q=0.8 Accept-Encoding: gzip, deflate, br Host: www.ft.com User-Agent: Mozilla/5.0 (Macintosh; Intel Mac OS X 10_15_7) AppleWebKit/605.1.15 (KHTML, like Gecko) Version/16.3 Safari/605.1.15 Accept-Language: en-US,en;q=0.9 Referer: https://t.co/ Connection: keep-alive Yep, there's a referer in there. Curling the page gets the trial text (ghads that's verbose html). curl --referer https://t.co/ https://www.ft.com/content/ebba73d9-d319-4634-aa09-bbf09ee4a03b | less And that returns the expected trial-less text.
spaceman_2020 4y ago
A while back, a small regional coop bank defaulted here in India and could not pay its depositors. The depositors had to protest and camp outside the bank for several days. Most of these were ordinary folks, many retirees, who were just trying to keep their savings in a neighborhood bank. Of course, since this was a political issue and the depositors were innocent, the government stepped in and promised to make them whole. While this move was welcomed, even in a country with deeply entrenched socialist values like India, there were quite a few voices asking: "why did you keep your money in a tiny bank like that and not a major national bank?" I understand that SVB was doing a lot for Silicon Valley, but when it was one of the few (perhaps only) that allowed anyone to open a bank account without visiting the country (it was also a part of Stripe Atlas), one should have asked if they were practicing proper risk management. If no other bank does this, but you do, it does indicate that there's a certain approach to risk in your entire business operations. And that approach can eventually manifest in making some very poor bets without adequate hedging.
- lotsofpulp 4y ago
  The question is, now that we have computers and money is just an entry in a database, why are banks even necessary for storing and moving money? The whole small bank and big bank issue is moot. Technology has long solved this problem so the government could roll out a solution where no one ever risks any deposits, no FDIC is needed, and no bailouts are ever needed.
  - frankreyes 4y ago
    This is the argument for CBDC. the Fed taking over deposits. The issue comes when you want to get a loan or mortgage. How does the Fed know if you're financially stable? How on earth can the Fed know how to centrally decide? In general the answer is: split the savings and investments in two different entities. One entity that saves but has forbidden to invest, and an independent entity that invests.
    - lotsofpulp 4y ago
      If you want to borrow money, you can go to a lender, just like you do now. Lenders do not have to be banks that take deposits.
somewhereoutth 4y ago
Somewhat mangling what I believe is the commonly accepted phrase: 'No atheists in a foxhole, no libertarians in a bank run'
- nemothekid 4y ago
  >commonly accepted phrase I can't find any source for the "no libertarians in a bank run" part before this weekend.
  - cypherpunks01 4y ago
    Probably transformed from this article: https://www.belfercenter.org/publication/no-atheists-foxholes-no-libertarians-financial-crises https://www.belfercenter.org/publication/no-atheists-foxhole... 2008 pub date
    - Grimburger 4y ago
      Which is incredibly strange because I remember libertarians screaming to the hills against bailouts back then. Plenty of people who weren't in that camp were against it too. The 2008 bailouts directly led to Occupy Wallstreet which was a big tent of political affiliations. Satoshi Nakamoto released bitcoin with "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks" recorded in the first block which is clearly a political statement against them.
      - cypherpunks01 4y ago
        I think the "phrase" in question has a more limited meaning than you are trying to ascribe to it. It means that people who are in a situation where they stand to directly benefit from a bailout (depositors, bondholders, shareholders) will lean away from libertarian views, based on their own needs at the time. It doesn't claim that libertarians are for/against bailouts in general. People who would not be directly helped, or who might even be harmed by a bailout (taxpayers), rail against them as being unfair, as in the examples you point out.
- deleted 4y ago
jmeister 4y ago
Prominent libertarians who opposed intervention: https://johnhcochrane.blogspot.com/2023/03/silicon-valley-bank-blinders.html https://johnhcochrane.blogspot.com/2023/03/silicon-valley-ba... https://twitter.com/CliffordAsness/status/1635120971425394689 https://twitter.com/CliffordAsness/status/163512097142539468... https://twitter.com/RepThomasMassie/status/1635069953375342593 https://twitter.com/RepThomasMassie/status/16350699533753425...
- viggity 4y ago
  I consider myself to be pretty libertarian but the idea that an intervention was going to cost the government any amount of money that didn't equate to a rounding error is ridiculous. Coupled the contagion it could have caused, this was an easy decision. They had enough in assets to cover 95% of deposits. They weren't just super liquid.
  - yunwal 4y ago
    Socialize the losses, privatize the gains, nice
    - ummonk 4y ago
      What gains? Depositors weren't getting gains, they were storing money in very low interest (far below inflation or money market yields) checking and savings accounts.
      - yunwal 4y ago
        Depositors were getting gains (4.5% interest rate which is very high compared to similar banks, and for something that’s supposed to be risk-free). The reason these rates were achievable is because SVB lobbied to remove regulations and allow them to engage in risky behavior.
        rashkov 4y ago
        What specific risky behavior are you referring to? Everything I’ve read points to the fact that they bought a ton of long term US treasury bonds at a low interest rate. Obviously this worked out very poorly for them, but I wouldn’t call this risk seeking behavior.
malchow 4y ago
Central gov't making statements to quell a bank run is one of the few things most libertarians will always say is properly in the federal toolkit.
jacktribe 4y ago
Is there a term for someone that is libertarian inclined, but does believe in a minimal level of government regulation and intervention? A "Lite-Libertarian" of sorts.
- NovemberWhiskey 4y ago
  In countries other than the U.S., this is called "liberalism".
- _ktx2 4y ago
  Plenty of Libertarians do. It's an umbrella term that encompasses everyone from anti-capitalists and Libertarian Socialists to classical liberals.
- SSLy 4y ago
  On a spectrum, minarchists, classical liberals, and so on.
- wnevets 4y ago
  a neoliberal?
  - over_bridge 4y ago
    Yes, this is the definition of neoliberals. In their view the government should only ever operate and enforce market rules (which includes protecting the market from external threats via military). The government should have no opinion on anything and just let the world unfold as the market dictates. Of course there are no pure neoliberal politicians as such a being would have no policies except cutting popular things and privatizing them. Hard to get elected. So we have neoliberalism with left or right characteristics as the mainstream ideologies.
    - Apocryphon 4y ago
      A good video that examines neoliberalism's tendency to be hypocritical on arguing against government action: https://www.youtube.com/watch?v=_1nqvDH-oag https://www.youtube.com/watch?v=_1nqvDH-oag
_ktx2 4y ago
[flagged]
doktrin 4y ago
[flagged]
- sdfghswe 4y ago
  Wow that's beautiful.
  - sdfghswe 4y ago
    Since the downvoters moved on to the next shiny thing, I'm paraphrasing it for posterity. The poster I was responding to said something like: libertarians are like cats - fierce in their independence but utterly reliant on a system that they don't appreciate or understand.
- CatWChainsaw 4y ago
  Judging by the downvotes you struck a few nerves. Just like cats will let you pet them but only exactly three times and then non-aggression principle suddenly violated
elzbardico 4y ago
The author ignores that behind the downfall of SVB was a climate of excess liquidity on the markets, a bonanza created by the authorities that made SVB see itself with a glut of funds. Now, SVB, loaded with money, could have tried loaning it like crazy, but instead, decided to go the conservative way and buy bonds. Someone could argue that they could have foreseen that this abundance of liquidity in the markets, along with the supply chain issues, would eventually lead to inflationary pressures and that once inflation has shown its ugly face, those bond's market value would be discounted, and that they could become vulnerable to a bank run. But in the end, even if we could argue that SVB should have been more prescient, it is clear that the root cause of the problems is the actions of the government and the FED. That said, please don't confuse me with a libertarian; I am just raising a somewhat contrarian point. Being called a libertarian would be an enormous source of shame and disgust for my mom.
- olivermarks 4y ago
  It was their unwise bet on ten year T bonds that got SVB into difficulties, a far larger societal economic issue than is being acknowledged. 'This decade’s learning: bonds aren’t a universally safe asset class.' ...the US federal reserve are playing a dangerous game battling the inflation they enabled with rate hikes http://www.brooock.com/a/svb-collapse-exposes-cracks-in-economy http://www.brooock.com/a/svb-collapse-exposes-cracks-in-econ...
  - mhb 4y ago
    What is the larger issue? That people buying bonds don't understand that their value drops when interest rates go up and that if you might need the money from the bonds before the bond matures you need to hedge for that?
    - olivermarks 4y ago
      From the link I posted: 'What this means going forward An unintended side effect of the Federal Reserve’s rate hikes is that many banks and institutions are holding an unfathomable amount of low-yield debt that is now worth far less than it was a year ago. We went from a world where 100-Year Austrian bonds would pay only 0.39% yields, to one where we’re now concerned about 8-9% annual inflation, in just two years. If institutions rightfully start deeming long-dated bonds to be a risky asset that isn't safe to hold on sensitive balance sheets, we could see bond premiums rise for these longer-dated bonds, raising the cost of capital for companies and governments alike...'
olivermarks 4y ago
A few libertarians are no match for the California supermajority and their pals, which of course includes the @FT... https://openthebooks.substack.com/p/the-silicon-valley-bank-coverup-and https://openthebooks.substack.com/p/the-silicon-valley-bank-...
braingenious 4y ago
This reminds me of one of my favorite books from the past couple years, A Libertarian Walks Into a Bear. It’s a fascinating deep dive into an attempt to create a sort of libertarian utopia in a small town called Grafton, New Hampshire. The speed at which they arrive at “we need government services” after they eviscerate government services is… unsurprising. 10/10 I highly recommend it for anyone that’s interested in real-life examples of libertarianism as applied to real populations in the real world. https://www.goodreads.com/book/show/50358538-a-libertarian-walks-into-a-bear https://www.goodreads.com/book/show/50358538-a-libertarian-w...
- wnevets 4y ago
  A more recent example is the water crisis taking place in Cochise county. https://grist.org/regulation/arizona-groundwater-cochise-county-riverview/ https://grist.org/regulation/arizona-groundwater-cochise-cou...
  - everybodyknows 4y ago
    > Kingman, where a Saudi-backed company grows alfalfa for export back to the Middle East
    - wnevets 4y ago
      The free market is amazing isn't it?
- mtlmtlmtlmtl 4y ago
  I'm probably wrong more often than I'm right when it comes to politics on average. But libertarianism has been obviously illogical to me since I was about 15, half my lifetime ago. Since then I've spoken to some very intelligent libertarians at length and... nope, it still doesn't make any sense. It makes less sense than ever, in fact. At least when I was 15 I just thought they must be stupid, but no, not necessarily. Now my operating theory is that it's similar to how some people become completely engrossed in a fictional universe and wish it was the real world.
balderdash 4y ago
While libertarian tendencies may be more prevalent in the VC community, they seem to still be a small minority (or at least that’s my perception). I for one undoubtedly think the treasuries actions create real moral hazard, but also am grateful that the depositors potentially affected by this won’t be harmed…
- _ktx2 4y ago
  Other than Peter Thiel there's not a lot of Libertarians on this list: https://www.opensecrets.org/industries/contrib.php?cycle=2022&ind=f2500 https://www.opensecrets.org/industries/contrib.php?cycle=202... This conjecture about Libertarians in tech is dated. Might've been true in the 90s, but the industry has been captured since then.
  - yunwal 4y ago
    [flagged]
    - ummonk 4y ago
      Nobody asked for bailouts to crypto banks / exchanges though.
      - yunwal 4y ago
        How is this relevant? The comment I was responding to stated that there’s no underlying libertarian streak in Silicon Valley. That’s clearly false.
    - kodah 4y ago
      To conflate political alignment with investor opportunism is astonishing.
      - yunwal 4y ago
        Oh ok so they’re only libertarian when it benefits them financially. I actually don’t think anyone disagrees with that.
anon291 4y ago
I mean... I'm fine with less regulation so long as we actually let large businesses and investors fail.
- sdfghswe 4y ago
  Which is exactly what is happening here. A large business is failing and its investors are losing their investment.
  - doodlesdev 4y ago
    Depositors aren't though, which is the issue. FDIC will cover losses that weren't actually insured (above $250K). The money doesn't come out of the "taxpayer" but instead from the banks, but guess from where the banks get money from?
    - breck 4y ago
      > but guess from where the banks get money from? Oh, I know this one! https://breckyunits.com/the-great-bank-robbery.html https://breckyunits.com/the-great-bank-robbery.html
    - sdfghswe 4y ago
      That's like saying that any time any one makes a loss, it's everyone _else's_ loss, because guess where their money comes from. What do you suggest should happen here?
      - doodlesdev 4y ago
        I suggest that the FDIC does what it should do and cover all losses that were insured, and let the uninsured losses be realized, as they should be normally. There's a gigantic moral risk in the FDIC covering uninsured losses, because that's a value judgement, and if next week my bank fails why shouldn't the FDIC cover all of my uninsured losses too? The value judgement that was done here is that if they didn't do it this bank collapse would generate contagion, which I believe is understandable, however if that is the case there should be other ways to prevent this kind of thing such as regulation that prevents banks from putting customer deposits into mortgage-backed securities (what the actual fuck, I still can't believe they've done this, it's like the world has learned nothing from 2008). Specifically I note that around 2018 there was regulation passed that reduced the amount of scrutiny banks such as Sillicon Valley Bank would receive [0], which we all know now how well that worked. Everyone needs to be taken accountable to the same degree, there should be no special cases or "exceptions". And if a need for those appears that should indicate a systemic problem instead of simply a isolated one-time event. [0]: https://www.forbes.com/sites/mayrarodriguezvalladares/2023/03/12/how-trumps-deregulation-sowed-the-seeds-for-silicon-valley-banks-demise/ https://www.forbes.com/sites/mayrarodriguezvalladares/2023/0...
Animats 4y ago
Right. Without a bailout, each customer would have $250K today (if they had that much n deposit) and probably another 10-20% this week, as assets were sold off. The FDIC could have worked a deal so that depositors were paid off in a few weeks, but in Treasury bonds with 5-10 years to maturity, to match the maturities of SVB assets. Depositors who really had to could sell their bonds immediately at a discount. That would have given time to liquidate SVB's loan portfolio. Depositors probably would have lost 5%-20%.
- Waterluvian 4y ago
  > Depositors who really had to could sell their bonds immediately at a discount. How does this kind of thing function? I assume the bank pools all the money and buys various investment products. Is there just another wild level of abstraction where"you own X% of this investment product. Feel free to sell your share to someone else" ?
  - Animats 4y ago
    The normal FDIC procedure would be that depositors get receivership certificates which represent a share of SVB's assets. Those are hard to trade, though. Somebody would offer to buy them, but at a deep discount. A better offer from the FDIC would be to offer Treasury bonds instead to those who want them, at a discount based on the FDIC's valuation of SVB's assets. The FDIC is well placed to sell off illiquid assets slowly. That's what they do after a bank failure. Depositors would have quick liquidity if they wanted, but it would cost them something. Is SVB's balance sheet, from the FDIC, out yet?
    - Waterluvian 4y ago
      Ahh okay. So the FDIC is doing that big government thing of acting collectively in everyone's interest, I suppose? Instead of everyone getting their piece of the frozen pie, starving as it thaws (possibly having to sell it at a steep loss of degrees to the radian), the FDIC just says, "I'll hold on to the whole pie and hand out slices from my backup pie stash. Then once it thaws, I'll add it to my backup pie stash."
gregw2 4y ago
From a Libertarian perspective why would we not: 1) have Congress+FDIC create a new form of deposit insurance that goes up to 10-25 million dollars[1] that is to be used for a new form of account legally dedicated to payroll; funded by a new set of fees since the private market clearly is not handling this issue well (Everybody knows about FDIC limits, and people who spend more than a fraction of time thinking about the risks can easily find out about third-party insurance and (newer) banking services that bundle your capital to multiple banks. ) 2) impose interest rate stress tests against banks with much smaller amounts of capital (not the current $250 billion threshold which must mean only the top 10 banks are subject to it?) (Something that SVB lobbied to keep itself exempt from having to do, and avoided the expense of keeping its interest rate hedges up to date the last ~18 months, leading to their collapse.) If you don't like one of those, then why not address a bit more of the root cause why businesses only do business with one bank: 3) require banks legally to not impose exclusive deposit conditions or benefits as a condition of granting loans (ie banks pressuring in any way their lendees to use their deposit services) The recently revealed sort of moral-hazard/grey-area "backstop-all-deposits-but-only-for-critical-situations" is really anti-competitive if we don't address it. It ensures that startup/SMB business owners, unclear of whether their >250/500k deposits are fully protected or not, will want to move cash to the very biggest "too-big-to-fail" banks just so they don't have to financially architect around the cash flow risks. (Cash flow risks are the #1 cause of failure of small businesses.) I would much rather have 1000+ banks in our ecosystem than 10; surely that is a more robust system. To me, guaranteeing all deposits (not just 250/500k or even 10 million) is another form of moral hazard where banks "privatize the gains, socialize the losses"; But I think the payroll risk is a systemic societal risk that makes sense for us to develop a societal framework to protect. [1] 250 employees at 250k each is a monthly payroll of $5 million. 6 months payroll is 30 million. If you're bigger than that, you have enough time/resources to put your eggs in more baskets and manage the complexity. I think I am being very generous here.
- JohnFen 4y ago
  > have Congress+FDIC create a new form of deposit insurance Such insurance exists on the private market already and is commonly used by businesses who have large sums of cash on deposits. Presumably, the depositors at SVB didn't do that because they didn't want to pay for it. Wouldn't a libertarian prefer that over having the government do it?
ummonk 4y ago
Libertarians invested in FTX and other crypto banks. They haven't demanded government bail them out. Businesses putting their deposits in reputable regulated banks is a different matter. Nothing libertarian about that. They're following standard practice as expected by the government and the government rightly decided to make them whole and maintain confidence in the system to ensure businesses would continue to engage in normal banking behavior as desired by the government instead of trying to adhere to 250k limits on deposit sizes.
- JohnFen 4y ago
  > They're following standard practice They weren't mitigating the risk of how they were using their deposit accounts. That's not following standard practice.
  - initplus 4y ago
    Splitting deposits to stay under the 250k limit is artificial behaviour that doesn’t change the overall risk profile for FDIC. The total amount of money covered by insurance is the same regardless of how it’s subdivided. Splitting up deposits isn’t the intended outcome by regulators here. It doesn’t actually achieve anything meaningful.
    - JohnFen 4y ago
      Splitting deposits isn't the only option and is often not the best one. There are a number of other solutions available, including buying your own insurance. FDIC insurance isn't the only insurance available (and isn't even intended primarily for businesses). It's just the free one.
      - initplus 4y ago
        There isn't enough money in the world to insure the bank deposits of every business. Think about how big insurers would have to be if they needed to insure all the deposits of every business. "Every business should have private deposit insurance" isn't the goal of regulators because it's not a workable solution. So instead the government acts as a sort of "insurer of last resort" by promising they will do everything they can to protect depositors in the case of banking instability.
thepasswordis 4y ago
Why on earth would libertarians give up tens of billions of dollars to a bank which the government could decide to nationalize?
- alchemist1e9 4y ago
  Exactly there isn’t lots of libertarian depositors at SVB, quite the opposite most likely. It seems because of Thiel involvement the FT author decided it was enough to write a propaganda article.
atleastoptimal 4y ago
There are always few (people who subscribe to an ideology that if applied universally would benefit their usual circumstances) in a (circumstance where applying that ideology would not benefit them)
- justnotworthit 4y ago
  AKA: There are few principled people.
npmaile 4y ago
Ahh, the pro-fractional reserve banking system libertarians. A group that is well known as much as it is not contradictory.
varispeed 4y ago
Libertarianism, socialism, capitalism etc. all fail to take into account human nature and that's where all the conflicts come from. Regulation is necessary to ensure that people who manage to get into position of power, who have certain kinds of personality disorders and other issues won't be able to game the system to their own personal advantage or satisfaction. In most cases whether it is socialism or capitalism, while they have good intentions, they are always ruined by corruption and other other undesirable behaviours that typically people climbing to the top have.
- UncleSlacky 4y ago
  "To look at people in capitalist society and conclude that human nature is egoism, is like looking at people in a factory where pollution is destroying their lungs and saying that it is human nature to cough." - Andrew Collier
  - DrThunder 4y ago
    Yes... because no one is coughing from pollution in North Korea or China. Name a society where no one is in power.
  - varispeed 4y ago
    That's catchy simplification of how complex human nature is, borders on ignorant. In every culture and political system you will have people climbing to power using universally unethical means and then use their position to inflict suffering on the people they see as beneath them or use that power for other types of personal gain or gain for the group they represent at the expense of others. It does not mean that every person is like this. It is a spectrum. Majority of people just want to live their lives in peace, but they have to navigate their lives through the whatever system has been created for them. You will have corrupt civil servants in a communist country just as in capitalist country and the elites are very much the same. I have lived in both systems and each system exploits slightly different groups of people. Sometimes it is hard to tell the difference.
tus666 4y ago
Is there any evidence they were libertarians to begin with? Peter Thiel might be, but he isn't asking for a bailout - he got himself out.
- Analemma_ 4y ago
  Yes, lots. There's a fun meme going around where you take any random VC ""thoughtleader"" demanding a complete backstop for SVB depositors and search "bailout until:2023-03-09" on their Twitter account to see what they thought about bailouts and moral hazard before last Thursday.
  - BurningFrog 4y ago
    I don't have any polls to support this, but I'd be very surprised if the median VC thoughtleader is particularly libertarian. There are a few outspoken ones, sure. But just a few.
storf45 4y ago
I'm proudly libertarian - in fact, we have an explanation for these boom/bust business cycles via https://en.wikipedia.org/wiki/Austrian_business_cycle_theory https://en.wikipedia.org/wiki/Austrian_business_cycle_theory. Libertarians have criticized cheap/free money for a very long time so it's not surprising that an institution that had to invest excess deposits into 'safe' treasuries is in trouble once interest rates started to rise. There are likely many other banks, company's, and institutions in trouble right now because of operating assumptions build on free/cheap money are invalid.
- dools 4y ago
  The natural rate of interest is zero for money with a floating exchange rate. Governments interfere to increase the interest rate, not lower it.
zac23or 4y ago
I read a lot of hackernews, for the technical part. But I never liked or believed in the VC/Startup bullshit. If HN had a filter just for technical stories, that would be great. I never believed in the talk of “let the market decide”, “we invested in that startup to change the world”, “disruption”, “good product will win” and other nonsense. Everything revolves around money, money and money. And there's nothing wrong with that, the problem is the bulshit not to assume it. For now, every time someone starts with this kind of bullshit, I will submit the YCombinator petition to the government.
- elliotto 4y ago
  There's a lot wrong with everything revolving around money, such as this bank failure for one.
- masklinn 4y ago
  > I read a lot of hackernews, for the technical part. But I never liked or believed in the VC/Startup bullshit. VC/Startup bullshit is literally hn's business daddy though, that's what the domain it lives on does.
  - zac23or 4y ago
    True. In launch batches of YC startups, this becomes unusable.
- ElfinTrousers 4y ago
  > If HN had a filter just for technical stories, that would be great. You might be ready for https://lobste.rs https://lobste.rs.
- givemeethekeys 4y ago
  There are plenty of good technical boards out there, but there are few good startup communities. I'd rather have the startup discussions over everything else.
  - mtlmtlmtlmtl 4y ago
smugma 4y ago
The key line says it all about how the US (in agreement with tech tycoons) does things: "Just like many of the banking titans after the global financial crisis of 2008, tech tycoons appear to favour the privatisation of profits and the socialisation of losses. There are few libertarians in a financial foxhole."
- beezle 4y ago
  Indeed. This entire Fed action has been a bailout of uninsured depositors who really should have known better. So now "uninsured by FDIC" has the implicit meaning "insured by the Federal Reserve". I'm not suggesting that corps should have managed every last penny to prevent an uninsured balance but the vast majority of their free cash should have been and sadly easily could have been insured and still readily available.
- vxNsr 4y ago
  Didn’t they announce HSBC is buying SVB. And they specifically said that no tax payer funds would be used here. The only loses here are for the shareholders of SVB. Did the gov broker the deal, sure, but it sounds like most of that brokering happened on the other side of the ocean. Basically it sounds like exactly the sort of thing a libertarian would support.
  - s1artibartfast 4y ago
    An actual libertarian I would point out that HSBC is only buying the UK branch of SV Bank and the line about no taxpayer funds is evasive language and a borderline lie. No tax revenue is being used to bail out the depositors, but every American with a bank account is paying for it. They're just applying a new fee to every Bank in the country to cover the losses It is still socialized losses.
    - vxNsr 4y ago
      Hmmm… I guess I didn’t read those article closely enough. Re: the fee, where do you see that?
newman314 4y ago
I once read somewhere that "Libertarians are like Republican housecats" and I suppose that sounds about right. Housecats are convinced that they are fully independent and do not need "you" for anything.
supernova87a 4y ago
"Libertarian reluctantly calls fire department" -- The Onion
- DrThunder 4y ago
  "Fire Department Promptly Shows Up 5 Minutes After House Burns Down" -- Babylon Bee (better Onion)
- shagie 4y ago
  https://www.theonion.com/libertarian-reluctantly-calls-fire-department-1819567309 https://www.theonion.com/libertarian-reluctantly-calls-fire-... (2004)
jojobas 4y ago
A typical libertarian response is "I've been robbed with taxes for so long, might as well use the help". They'd still prefer to not pay the taxes.
s1artibartfast 4y ago
This reminds me of the bad faith argument that libertarians should not take social security, or that communists should not ask for a paycheck. It is bad faith because it willfully ignores the fact that neither person currently lives in a libertarian or socialist society. The libertarian still has to pay SS taxes they don't want to and the communist still has to pay rent.
primogen 4y ago
https://archive.is/6MBEL https://archive.is/6MBEL
anomaly_ 4y ago
Anyone funded a Treasury as a Service (TaaS) startup yet?

https://t.co/kw7ykC3763 https://t.co/kw7ykC3763 Without paywall courtesy of FT twitter post

colpabar 4y ago
So I'm assuming that's a link posted on twitter that includes some flag that prevents the site from paywalling the article? Neat. I'll still post a humble archive link as well. https://archive.is/6MBEL https://archive.is/6MBEL
- cypherpunks01 4y ago
  Yes, FT's article links posted on twitter have a cool behavior where it bypasses paywall if you enter through the right Referer (I assume) Garnered from https://twitter.com/FT/status/1635265357048082435 https://twitter.com/FT/status/1635265357048082435 I like them for this, but I don't see a lot of other news outlets doing this. Most other places simply post links to their paywalled articles.
  - doodlesdev 4y ago
    It's just Google Tag Manager, that's also why if you have JavaScript disabled or ClearURLs (or similar) it won't work as they won't be able to see the UTM tag.
- shagie 4y ago
  Chasing links... https://t.co/kw7ykC3763 returns a 301 to https://on.ft.com/3Jy8UBY https://on.ft.com/3Jy8UBY returns a 301 to https://ft.trib.al/b2FR72U https://ft.trib.al/b2FR72U returns a 301 to https://www.ft.com/content/ebba73d9-d319-4634-aa09-bbf09ee4a03b There's certainly some magic with going from the t.co link - going to the other two direct hit the paywall. :method: GET :scheme: https :authority: www.ft.com :path: /content/ebba73d9-d319-4634-aa09-bbf09ee4a03b {cookie with lots of stuff in it redacted} Accept: text/html,application/xhtml+xml,application/xml;q=0.9,*/*;q=0.8 Accept-Encoding: gzip, deflate, br Host: www.ft.com User-Agent: Mozilla/5.0 (Macintosh; Intel Mac OS X 10_15_7) AppleWebKit/605.1.15 (KHTML, like Gecko) Version/16.3 Safari/605.1.15 Accept-Language: en-US,en;q=0.9 Referer: https://t.co/ Connection: keep-alive Yep, there's a referer in there. Curling the page gets the trial text (ghads that's verbose html). curl --referer https://t.co/ https://www.ft.com/content/ebba73d9-d319-4634-aa09-bbf09ee4a03b | less And that returns the expected trial-less text.

spaceman_2020 4y ago

A while back, a small regional coop bank defaulted here in India and could not pay its depositors. The depositors had to protest and camp outside the bank for several days. Most of these were ordinary folks, many retirees, who were just trying to keep their savings in a neighborhood bank. Of course, since this was a political issue and the depositors were innocent, the government stepped in and promised to make them whole. While this move was welcomed, even in a country with deeply entrenched socialist values like India, there were quite a few voices asking: "why did you keep your money in a tiny bank like that and not a major national bank?" I understand that SVB was doing a lot for Silicon Valley, but when it was one of the few (perhaps only) that allowed anyone to open a bank account without visiting the country (it was also a part of Stripe Atlas), one should have asked if they were practicing proper risk management. If no other bank does this, but you do, it does indicate that there's a certain approach to risk in your entire business operations. And that approach can eventually manifest in making some very poor bets without adequate hedging.

lotsofpulp 4y ago
The question is, now that we have computers and money is just an entry in a database, why are banks even necessary for storing and moving money? The whole small bank and big bank issue is moot. Technology has long solved this problem so the government could roll out a solution where no one ever risks any deposits, no FDIC is needed, and no bailouts are ever needed.
- frankreyes 4y ago
  This is the argument for CBDC. the Fed taking over deposits. The issue comes when you want to get a loan or mortgage. How does the Fed know if you're financially stable? How on earth can the Fed know how to centrally decide? In general the answer is: split the savings and investments in two different entities. One entity that saves but has forbidden to invest, and an independent entity that invests.
  - lotsofpulp 4y ago
    If you want to borrow money, you can go to a lender, just like you do now. Lenders do not have to be banks that take deposits.

somewhereoutth 4y ago

Somewhat mangling what I believe is the commonly accepted phrase: 'No atheists in a foxhole, no libertarians in a bank run'

nemothekid 4y ago
>commonly accepted phrase I can't find any source for the "no libertarians in a bank run" part before this weekend.
- cypherpunks01 4y ago
  Probably transformed from this article: https://www.belfercenter.org/publication/no-atheists-foxholes-no-libertarians-financial-crises https://www.belfercenter.org/publication/no-atheists-foxhole... 2008 pub date
  - Grimburger 4y ago
    Which is incredibly strange because I remember libertarians screaming to the hills against bailouts back then. Plenty of people who weren't in that camp were against it too. The 2008 bailouts directly led to Occupy Wallstreet which was a big tent of political affiliations. Satoshi Nakamoto released bitcoin with "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks" recorded in the first block which is clearly a political statement against them.
    - cypherpunks01 4y ago
      I think the "phrase" in question has a more limited meaning than you are trying to ascribe to it. It means that people who are in a situation where they stand to directly benefit from a bailout (depositors, bondholders, shareholders) will lean away from libertarian views, based on their own needs at the time. It doesn't claim that libertarians are for/against bailouts in general. People who would not be directly helped, or who might even be harmed by a bailout (taxpayers), rail against them as being unfair, as in the examples you point out.
deleted 4y ago

jmeister 4y ago

Prominent libertarians who opposed intervention: https://johnhcochrane.blogspot.com/2023/03/silicon-valley-bank-blinders.html https://johnhcochrane.blogspot.com/2023/03/silicon-valley-ba... https://twitter.com/CliffordAsness/status/1635120971425394689 https://twitter.com/CliffordAsness/status/163512097142539468... https://twitter.com/RepThomasMassie/status/1635069953375342593 https://twitter.com/RepThomasMassie/status/16350699533753425...

viggity 4y ago
I consider myself to be pretty libertarian but the idea that an intervention was going to cost the government any amount of money that didn't equate to a rounding error is ridiculous. Coupled the contagion it could have caused, this was an easy decision. They had enough in assets to cover 95% of deposits. They weren't just super liquid.
- yunwal 4y ago
  Socialize the losses, privatize the gains, nice
  - ummonk 4y ago
    What gains? Depositors weren't getting gains, they were storing money in very low interest (far below inflation or money market yields) checking and savings accounts.
    - yunwal 4y ago
      Depositors were getting gains (4.5% interest rate which is very high compared to similar banks, and for something that’s supposed to be risk-free). The reason these rates were achievable is because SVB lobbied to remove regulations and allow them to engage in risky behavior.
      - rashkov 4y ago
        What specific risky behavior are you referring to? Everything I’ve read points to the fact that they bought a ton of long term US treasury bonds at a low interest rate. Obviously this worked out very poorly for them, but I wouldn’t call this risk seeking behavior.

malchow 4y ago

Central gov't making statements to quell a bank run is one of the few things most libertarians will always say is properly in the federal toolkit.

jacktribe 4y ago

Is there a term for someone that is libertarian inclined, but does believe in a minimal level of government regulation and intervention? A "Lite-Libertarian" of sorts.

NovemberWhiskey 4y ago
In countries other than the U.S., this is called "liberalism".
_ktx2 4y ago
Plenty of Libertarians do. It's an umbrella term that encompasses everyone from anti-capitalists and Libertarian Socialists to classical liberals.
SSLy 4y ago
On a spectrum, minarchists, classical liberals, and so on.
wnevets 4y ago
a neoliberal?
- over_bridge 4y ago
  Yes, this is the definition of neoliberals. In their view the government should only ever operate and enforce market rules (which includes protecting the market from external threats via military). The government should have no opinion on anything and just let the world unfold as the market dictates. Of course there are no pure neoliberal politicians as such a being would have no policies except cutting popular things and privatizing them. Hard to get elected. So we have neoliberalism with left or right characteristics as the mainstream ideologies.
  - Apocryphon 4y ago
    A good video that examines neoliberalism's tendency to be hypocritical on arguing against government action: https://www.youtube.com/watch?v=_1nqvDH-oag https://www.youtube.com/watch?v=_1nqvDH-oag

_ktx2 4y ago

[flagged]

doktrin 4y ago

[flagged]

sdfghswe 4y ago
Wow that's beautiful.
- sdfghswe 4y ago
  Since the downvoters moved on to the next shiny thing, I'm paraphrasing it for posterity. The poster I was responding to said something like: libertarians are like cats - fierce in their independence but utterly reliant on a system that they don't appreciate or understand.
CatWChainsaw 4y ago
Judging by the downvotes you struck a few nerves. Just like cats will let you pet them but only exactly three times and then non-aggression principle suddenly violated

elzbardico 4y ago

The author ignores that behind the downfall of SVB was a climate of excess liquidity on the markets, a bonanza created by the authorities that made SVB see itself with a glut of funds. Now, SVB, loaded with money, could have tried loaning it like crazy, but instead, decided to go the conservative way and buy bonds. Someone could argue that they could have foreseen that this abundance of liquidity in the markets, along with the supply chain issues, would eventually lead to inflationary pressures and that once inflation has shown its ugly face, those bond's market value would be discounted, and that they could become vulnerable to a bank run. But in the end, even if we could argue that SVB should have been more prescient, it is clear that the root cause of the problems is the actions of the government and the FED. That said, please don't confuse me with a libertarian; I am just raising a somewhat contrarian point. Being called a libertarian would be an enormous source of shame and disgust for my mom.

olivermarks 4y ago
It was their unwise bet on ten year T bonds that got SVB into difficulties, a far larger societal economic issue than is being acknowledged. 'This decade’s learning: bonds aren’t a universally safe asset class.' ...the US federal reserve are playing a dangerous game battling the inflation they enabled with rate hikes http://www.brooock.com/a/svb-collapse-exposes-cracks-in-economy http://www.brooock.com/a/svb-collapse-exposes-cracks-in-econ...
- mhb 4y ago
  What is the larger issue? That people buying bonds don't understand that their value drops when interest rates go up and that if you might need the money from the bonds before the bond matures you need to hedge for that?
  - olivermarks 4y ago
    From the link I posted: 'What this means going forward An unintended side effect of the Federal Reserve’s rate hikes is that many banks and institutions are holding an unfathomable amount of low-yield debt that is now worth far less than it was a year ago. We went from a world where 100-Year Austrian bonds would pay only 0.39% yields, to one where we’re now concerned about 8-9% annual inflation, in just two years. If institutions rightfully start deeming long-dated bonds to be a risky asset that isn't safe to hold on sensitive balance sheets, we could see bond premiums rise for these longer-dated bonds, raising the cost of capital for companies and governments alike...'

olivermarks 4y ago

A few libertarians are no match for the California supermajority and their pals, which of course includes the @FT... https://openthebooks.substack.com/p/the-silicon-valley-bank-coverup-and https://openthebooks.substack.com/p/the-silicon-valley-bank-...

braingenious 4y ago

This reminds me of one of my favorite books from the past couple years, A Libertarian Walks Into a Bear. It’s a fascinating deep dive into an attempt to create a sort of libertarian utopia in a small town called Grafton, New Hampshire. The speed at which they arrive at “we need government services” after they eviscerate government services is… unsurprising. 10/10 I highly recommend it for anyone that’s interested in real-life examples of libertarianism as applied to real populations in the real world. https://www.goodreads.com/book/show/50358538-a-libertarian-walks-into-a-bear https://www.goodreads.com/book/show/50358538-a-libertarian-w...

wnevets 4y ago
A more recent example is the water crisis taking place in Cochise county. https://grist.org/regulation/arizona-groundwater-cochise-county-riverview/ https://grist.org/regulation/arizona-groundwater-cochise-cou...
- everybodyknows 4y ago
  > Kingman, where a Saudi-backed company grows alfalfa for export back to the Middle East
  - wnevets 4y ago
    The free market is amazing isn't it?
mtlmtlmtlmtl 4y ago
I'm probably wrong more often than I'm right when it comes to politics on average. But libertarianism has been obviously illogical to me since I was about 15, half my lifetime ago. Since then I've spoken to some very intelligent libertarians at length and... nope, it still doesn't make any sense. It makes less sense than ever, in fact. At least when I was 15 I just thought they must be stupid, but no, not necessarily. Now my operating theory is that it's similar to how some people become completely engrossed in a fictional universe and wish it was the real world.

balderdash 4y ago

While libertarian tendencies may be more prevalent in the VC community, they seem to still be a small minority (or at least that’s my perception). I for one undoubtedly think the treasuries actions create real moral hazard, but also am grateful that the depositors potentially affected by this won’t be harmed…

_ktx2 4y ago
Other than Peter Thiel there's not a lot of Libertarians on this list: https://www.opensecrets.org/industries/contrib.php?cycle=2022&ind=f2500 https://www.opensecrets.org/industries/contrib.php?cycle=202... This conjecture about Libertarians in tech is dated. Might've been true in the 90s, but the industry has been captured since then.
- yunwal 4y ago
  [flagged]
  - ummonk 4y ago
    Nobody asked for bailouts to crypto banks / exchanges though.
    - yunwal 4y ago
      How is this relevant? The comment I was responding to stated that there’s no underlying libertarian streak in Silicon Valley. That’s clearly false.
  - kodah 4y ago
    To conflate political alignment with investor opportunism is astonishing.
    - yunwal 4y ago
      Oh ok so they’re only libertarian when it benefits them financially. I actually don’t think anyone disagrees with that.

anon291 4y ago

I mean... I'm fine with less regulation so long as we actually let large businesses and investors fail.

sdfghswe 4y ago
Which is exactly what is happening here. A large business is failing and its investors are losing their investment.
- doodlesdev 4y ago
  Depositors aren't though, which is the issue. FDIC will cover losses that weren't actually insured (above $250K). The money doesn't come out of the "taxpayer" but instead from the banks, but guess from where the banks get money from?
  - breck 4y ago
    > but guess from where the banks get money from? Oh, I know this one! https://breckyunits.com/the-great-bank-robbery.html https://breckyunits.com/the-great-bank-robbery.html
  - sdfghswe 4y ago
    That's like saying that any time any one makes a loss, it's everyone _else's_ loss, because guess where their money comes from. What do you suggest should happen here?
    - doodlesdev 4y ago
      I suggest that the FDIC does what it should do and cover all losses that were insured, and let the uninsured losses be realized, as they should be normally. There's a gigantic moral risk in the FDIC covering uninsured losses, because that's a value judgement, and if next week my bank fails why shouldn't the FDIC cover all of my uninsured losses too? The value judgement that was done here is that if they didn't do it this bank collapse would generate contagion, which I believe is understandable, however if that is the case there should be other ways to prevent this kind of thing such as regulation that prevents banks from putting customer deposits into mortgage-backed securities (what the actual fuck, I still can't believe they've done this, it's like the world has learned nothing from 2008). Specifically I note that around 2018 there was regulation passed that reduced the amount of scrutiny banks such as Sillicon Valley Bank would receive [0], which we all know now how well that worked. Everyone needs to be taken accountable to the same degree, there should be no special cases or "exceptions". And if a need for those appears that should indicate a systemic problem instead of simply a isolated one-time event. [0]: https://www.forbes.com/sites/mayrarodriguezvalladares/2023/03/12/how-trumps-deregulation-sowed-the-seeds-for-silicon-valley-banks-demise/ https://www.forbes.com/sites/mayrarodriguezvalladares/2023/0...

Animats 4y ago

Right. Without a bailout, each customer would have $250K today (if they had that much n deposit) and probably another 10-20% this week, as assets were sold off. The FDIC could have worked a deal so that depositors were paid off in a few weeks, but in Treasury bonds with 5-10 years to maturity, to match the maturities of SVB assets. Depositors who really had to could sell their bonds immediately at a discount. That would have given time to liquidate SVB's loan portfolio. Depositors probably would have lost 5%-20%.

Waterluvian 4y ago
> Depositors who really had to could sell their bonds immediately at a discount. How does this kind of thing function? I assume the bank pools all the money and buys various investment products. Is there just another wild level of abstraction where"you own X% of this investment product. Feel free to sell your share to someone else" ?
- Animats 4y ago
  The normal FDIC procedure would be that depositors get receivership certificates which represent a share of SVB's assets. Those are hard to trade, though. Somebody would offer to buy them, but at a deep discount. A better offer from the FDIC would be to offer Treasury bonds instead to those who want them, at a discount based on the FDIC's valuation of SVB's assets. The FDIC is well placed to sell off illiquid assets slowly. That's what they do after a bank failure. Depositors would have quick liquidity if they wanted, but it would cost them something. Is SVB's balance sheet, from the FDIC, out yet?
  - Waterluvian 4y ago
    Ahh okay. So the FDIC is doing that big government thing of acting collectively in everyone's interest, I suppose? Instead of everyone getting their piece of the frozen pie, starving as it thaws (possibly having to sell it at a steep loss of degrees to the radian), the FDIC just says, "I'll hold on to the whole pie and hand out slices from my backup pie stash. Then once it thaws, I'll add it to my backup pie stash."

gregw2 4y ago

From a Libertarian perspective why would we not: 1) have Congress+FDIC create a new form of deposit insurance that goes up to 10-25 million dollars[1] that is to be used for a new form of account legally dedicated to payroll; funded by a new set of fees since the private market clearly is not handling this issue well (Everybody knows about FDIC limits, and people who spend more than a fraction of time thinking about the risks can easily find out about third-party insurance and (newer) banking services that bundle your capital to multiple banks. ) 2) impose interest rate stress tests against banks with much smaller amounts of capital (not the current $250 billion threshold which must mean only the top 10 banks are subject to it?) (Something that SVB lobbied to keep itself exempt from having to do, and avoided the expense of keeping its interest rate hedges up to date the last ~18 months, leading to their collapse.) If you don't like one of those, then why not address a bit more of the root cause why businesses only do business with one bank: 3) require banks legally to not impose exclusive deposit conditions or benefits as a condition of granting loans (ie banks pressuring in any way their lendees to use their deposit services) The recently revealed sort of moral-hazard/grey-area "backstop-all-deposits-but-only-for-critical-situations" is really anti-competitive if we don't address it. It ensures that startup/SMB business owners, unclear of whether their >250/500k deposits are fully protected or not, will want to move cash to the very biggest "too-big-to-fail" banks just so they don't have to financially architect around the cash flow risks. (Cash flow risks are the #1 cause of failure of small businesses.) I would much rather have 1000+ banks in our ecosystem than 10; surely that is a more robust system. To me, guaranteeing all deposits (not just 250/500k or even 10 million) is another form of moral hazard where banks "privatize the gains, socialize the losses"; But I think the payroll risk is a systemic societal risk that makes sense for us to develop a societal framework to protect. [1] 250 employees at 250k each is a monthly payroll of $5 million. 6 months payroll is 30 million. If you're bigger than that, you have enough time/resources to put your eggs in more baskets and manage the complexity. I think I am being very generous here.

JohnFen 4y ago
> have Congress+FDIC create a new form of deposit insurance Such insurance exists on the private market already and is commonly used by businesses who have large sums of cash on deposits. Presumably, the depositors at SVB didn't do that because they didn't want to pay for it. Wouldn't a libertarian prefer that over having the government do it?

ummonk 4y ago

Libertarians invested in FTX and other crypto banks. They haven't demanded government bail them out. Businesses putting their deposits in reputable regulated banks is a different matter. Nothing libertarian about that. They're following standard practice as expected by the government and the government rightly decided to make them whole and maintain confidence in the system to ensure businesses would continue to engage in normal banking behavior as desired by the government instead of trying to adhere to 250k limits on deposit sizes.

JohnFen 4y ago
> They're following standard practice They weren't mitigating the risk of how they were using their deposit accounts. That's not following standard practice.
- initplus 4y ago
  Splitting deposits to stay under the 250k limit is artificial behaviour that doesn’t change the overall risk profile for FDIC. The total amount of money covered by insurance is the same regardless of how it’s subdivided. Splitting up deposits isn’t the intended outcome by regulators here. It doesn’t actually achieve anything meaningful.
  - JohnFen 4y ago
    Splitting deposits isn't the only option and is often not the best one. There are a number of other solutions available, including buying your own insurance. FDIC insurance isn't the only insurance available (and isn't even intended primarily for businesses). It's just the free one.
    - initplus 4y ago
      There isn't enough money in the world to insure the bank deposits of every business. Think about how big insurers would have to be if they needed to insure all the deposits of every business. "Every business should have private deposit insurance" isn't the goal of regulators because it's not a workable solution. So instead the government acts as a sort of "insurer of last resort" by promising they will do everything they can to protect depositors in the case of banking instability.

thepasswordis 4y ago

Why on earth would libertarians give up tens of billions of dollars to a bank which the government could decide to nationalize?

alchemist1e9 4y ago
Exactly there isn’t lots of libertarian depositors at SVB, quite the opposite most likely. It seems because of Thiel involvement the FT author decided it was enough to write a propaganda article.

atleastoptimal 4y ago

There are always few (people who subscribe to an ideology that if applied universally would benefit their usual circumstances) in a (circumstance where applying that ideology would not benefit them)

justnotworthit 4y ago
AKA: There are few principled people.

npmaile 4y ago

Ahh, the pro-fractional reserve banking system libertarians. A group that is well known as much as it is not contradictory.

varispeed 4y ago

Libertarianism, socialism, capitalism etc. all fail to take into account human nature and that's where all the conflicts come from. Regulation is necessary to ensure that people who manage to get into position of power, who have certain kinds of personality disorders and other issues won't be able to game the system to their own personal advantage or satisfaction. In most cases whether it is socialism or capitalism, while they have good intentions, they are always ruined by corruption and other other undesirable behaviours that typically people climbing to the top have.

UncleSlacky 4y ago
"To look at people in capitalist society and conclude that human nature is egoism, is like looking at people in a factory where pollution is destroying their lungs and saying that it is human nature to cough." - Andrew Collier
- DrThunder 4y ago
  Yes... because no one is coughing from pollution in North Korea or China. Name a society where no one is in power.
- varispeed 4y ago
  That's catchy simplification of how complex human nature is, borders on ignorant. In every culture and political system you will have people climbing to power using universally unethical means and then use their position to inflict suffering on the people they see as beneath them or use that power for other types of personal gain or gain for the group they represent at the expense of others. It does not mean that every person is like this. It is a spectrum. Majority of people just want to live their lives in peace, but they have to navigate their lives through the whatever system has been created for them. You will have corrupt civil servants in a communist country just as in capitalist country and the elites are very much the same. I have lived in both systems and each system exploits slightly different groups of people. Sometimes it is hard to tell the difference.

tus666 4y ago

Is there any evidence they were libertarians to begin with? Peter Thiel might be, but he isn't asking for a bailout - he got himself out.

Analemma_ 4y ago
Yes, lots. There's a fun meme going around where you take any random VC ""thoughtleader"" demanding a complete backstop for SVB depositors and search "bailout until:2023-03-09" on their Twitter account to see what they thought about bailouts and moral hazard before last Thursday.
- BurningFrog 4y ago
  I don't have any polls to support this, but I'd be very surprised if the median VC thoughtleader is particularly libertarian. There are a few outspoken ones, sure. But just a few.

storf45 4y ago

I'm proudly libertarian - in fact, we have an explanation for these boom/bust business cycles via https://en.wikipedia.org/wiki/Austrian_business_cycle_theory https://en.wikipedia.org/wiki/Austrian_business_cycle_theory. Libertarians have criticized cheap/free money for a very long time so it's not surprising that an institution that had to invest excess deposits into 'safe' treasuries is in trouble once interest rates started to rise. There are likely many other banks, company's, and institutions in trouble right now because of operating assumptions build on free/cheap money are invalid.

dools 4y ago
The natural rate of interest is zero for money with a floating exchange rate. Governments interfere to increase the interest rate, not lower it.

zac23or 4y ago

I read a lot of hackernews, for the technical part. But I never liked or believed in the VC/Startup bullshit. If HN had a filter just for technical stories, that would be great. I never believed in the talk of “let the market decide”, “we invested in that startup to change the world”, “disruption”, “good product will win” and other nonsense. Everything revolves around money, money and money. And there's nothing wrong with that, the problem is the bulshit not to assume it. For now, every time someone starts with this kind of bullshit, I will submit the YCombinator petition to the government.

elliotto 4y ago
There's a lot wrong with everything revolving around money, such as this bank failure for one.
masklinn 4y ago
> I read a lot of hackernews, for the technical part. But I never liked or believed in the VC/Startup bullshit. VC/Startup bullshit is literally hn's business daddy though, that's what the domain it lives on does.
- zac23or 4y ago
  True. In launch batches of YC startups, this becomes unusable.
ElfinTrousers 4y ago
> If HN had a filter just for technical stories, that would be great. You might be ready for https://lobste.rs https://lobste.rs.
givemeethekeys 4y ago
There are plenty of good technical boards out there, but there are few good startup communities. I'd rather have the startup discussions over everything else.
- mtlmtlmtlmtl 4y ago

smugma 4y ago

The key line says it all about how the US (in agreement with tech tycoons) does things: "Just like many of the banking titans after the global financial crisis of 2008, tech tycoons appear to favour the privatisation of profits and the socialisation of losses. There are few libertarians in a financial foxhole."

beezle 4y ago
Indeed. This entire Fed action has been a bailout of uninsured depositors who really should have known better. So now "uninsured by FDIC" has the implicit meaning "insured by the Federal Reserve". I'm not suggesting that corps should have managed every last penny to prevent an uninsured balance but the vast majority of their free cash should have been and sadly easily could have been insured and still readily available.
vxNsr 4y ago
Didn’t they announce HSBC is buying SVB. And they specifically said that no tax payer funds would be used here. The only loses here are for the shareholders of SVB. Did the gov broker the deal, sure, but it sounds like most of that brokering happened on the other side of the ocean. Basically it sounds like exactly the sort of thing a libertarian would support.
- s1artibartfast 4y ago
  An actual libertarian I would point out that HSBC is only buying the UK branch of SV Bank and the line about no taxpayer funds is evasive language and a borderline lie. No tax revenue is being used to bail out the depositors, but every American with a bank account is paying for it. They're just applying a new fee to every Bank in the country to cover the losses It is still socialized losses.
  - vxNsr 4y ago
    Hmmm… I guess I didn’t read those article closely enough. Re: the fee, where do you see that?

newman314 4y ago

I once read somewhere that "Libertarians are like Republican housecats" and I suppose that sounds about right. Housecats are convinced that they are fully independent and do not need "you" for anything.

supernova87a 4y ago

"Libertarian reluctantly calls fire department" -- The Onion

DrThunder 4y ago
"Fire Department Promptly Shows Up 5 Minutes After House Burns Down" -- Babylon Bee (better Onion)
shagie 4y ago
https://www.theonion.com/libertarian-reluctantly-calls-fire-department-1819567309 https://www.theonion.com/libertarian-reluctantly-calls-fire-... (2004)

jojobas 4y ago

A typical libertarian response is "I've been robbed with taxes for so long, might as well use the help". They'd still prefer to not pay the taxes.

s1artibartfast 4y ago

This reminds me of the bad faith argument that libertarians should not take social security, or that communists should not ask for a paycheck. It is bad faith because it willfully ignores the fact that neither person currently lives in a libertarian or socialist society. The libertarian still has to pay SS taxes they don't want to and the communist still has to pay rent.

primogen 4y ago

https://archive.is/6MBEL https://archive.is/6MBEL

anomaly_ 4y ago

Anyone funded a Treasury as a Service (TaaS) startup yet?