4 ms·

It's hard to follow this story and not see how corrupt and hypocritical the top tier VCs are. Unfortunately it doesn't seem like using inside info to precipitat

It's hard to follow this story and not see how corrupt and hypocritical the top tier VCs are. Unfortunately it doesn't seem like using inside info to precipitate a bank run is illegal. "No handouts, unless they are for me."

_skel 4y ago
Why do people think VCs are libertarians? Most of them are Democrats! So are most major tech CEOs. Political contributions are publicly recorded if you want to see where any individual stands… And when did VCs rail against “bailouts” in the past? There is a pretty big difference between being a mainstream capitalist and being a libertarian.
- zeruch 4y ago
  "Why do people think VCs are libertarians? Most of them are Democrats!" You seem to: 1. presume those two categories are mutually exclusive. They aren't. 2. Many of the libertarian values on the economic side, held by many in the VC/PE space regardless of political affiliation, means that just like Rand herself, they espouse -by action if not by word- "privatize gain, socialize risk" pretty much by rote. Anyone shocked by this either isn't looking, hasn't been in this business very long, or is the person mentioned in the Steinbeck quote (paraphrased here for contextual re-appropriation) "the rubes see themselves not as an exploited set of growth-hackers and disruption-monkeys, but as temporarily embarrassed billionaires."
- rexreed 4y ago
  Let me acquaint you with Peter Thiel, a libertarian VC: https://www.wired.com/story/the-libertarian-logic-of-peter-thiel/ https://www.wired.com/story/the-libertarian-logic-of-peter-t... And lest you think he's the only libertarian VC: https://www.newstatesman.com/quickfire/2023/03/silicon-valley-bank-collapse-hypocrisy-libertarian-tech-bros https://www.newstatesman.com/quickfire/2023/03/silicon-valle... And to them railing against bailouts while asking for them now (from the above article): “Where is [the chairman of the Federal Reserve, Jay] Powell? Where is [the Treasury secretary, Janet] Yellen? Stop this crisis NOW,” tweeted the venture capitalist David Sacks – the same David Sacks who is a friend of Thiel and Musk, and who has previously heavily criticised “special-interest corruption” and bank bailouts. Bill Ackman, a billionaire hedge fund manager and Donald Trump supporter that has in the past complained about attempts by the government’s Securities and Exchange Commission to regulate one of his investment funds, performed some spectacular mental gymnastics over the weekend, calling on the FDIC to “guarantee all bank deposits”.
  - pc86 4y ago
    I don't know that I would describe any of Thiel's opinions as "mainstream."
    - deleted 4y ago
      [deleted]
    - JetSpiegel 4y ago
      He was practically the GOP economic ideologue under Trump.
listenallyall 4y ago
I've got no love, nor much respect for venture capitalists, but I don't see that wanting, or expecting, to get your money out of a bank account to be corrupt or hypocritical. Equity bailouts, TARP relief funds, debt guarantees... those are entirely different stories. I also don't blame them for whining and complaining, likely anyone would do the same. The Fed sometimes has to make tough decisions, complying with everything that VCs want just reduces any faith or respect markets have for the Fed and its officers.
- LiquidSky 4y ago
  >I've got no love, nor much respect for venture capitalists, but I don't see that wanting, or expecting, to get your money out of a bank account to be corrupt or hypocritical. Of course we all want that, the issue is that there are long-established, clearly-defined rules for how much of your account is protected that somehow don’t apply to the rich. For you or I it’s $250,000. Need more to be whole? Too bad, suck it up, that’s the law. But VC accounts? 100% recovery sir, sorry for the trouble! >I also don't blame them for whining and complaining, likely anyone would do the same. Except until last week most of these guys were crowing about PERSONAL RESPONSIBILITY and living with your choices and how handouts and bailouts were evil in response to workers and consumers asking for anything Curiously though, when it became about their money, suddenly it’s GOVERNMENT HELP
  - initplus 4y ago
    People are getting too caught up in the 250k limit. Most bank failures result in all depositors being made whole - even over the limit. Normally by regulators “hinting” that a larger bank should acquire the failing banks assets whole. FDIC exists to create faith in the banking system - no to just enforce a rule book on how deposit insurance is structured. The goal is for FDIC to never have to pay out in the first place - FDIC’s existence prevents the bank run from starting. The obvious conclusion to the 250k limit (splitting deposits between banks) doesn’t really do anything to actually reduce risk in the banking system, or risk to FDIC. Splitting deposits like this is artificial behaviour that doesn’t have any real benefits to overall stability of the economy.
guywithahat 4y ago
What makes you say they’re corrupt? The only accusation I’ve seen is that Thiel removed his money after the bank stopped processing his transactions, but that doesn’t seem nefarious to me
- manicdee 4y ago
  The obvious chain of events is payments not being processed, Thiel gets on the blower, receives inside information which causes him concern, removes his money while he still can. To me as a low information armchair expert it seems bizarre that Thiel could move money out while SVB was having trouble moving money at all.
aaronbrethorst 4y ago
Privatize the profits! Socialize the losses!
- twblalock 4y ago
  The profits from tech are available to investors via the stock market. Meanwhile, no taxpayer money is being used to clean up the failure of SVB and prevent the contagion from spreading.
  - deleted 4y ago
    [deleted]
  - dsm4ck 4y ago
    where is the money coming from if not taxpayers?
    - twblalock 4y ago
      The FDIC does not get a penny of taxpayer money. Member banks pay for it. Member banks also pay for the Fed.
      - brightlancer 4y ago
        Member banks pay for it _by law_. And those member banks get that money either by charging customers for it or by reducing what they provide in returns on investment. It may not be coming from income taxes, but it's definitely socializing the losses and I would argue it's effectively coming from the taxpayers.

_skel 4y ago

Why do people think VCs are libertarians? Most of them are Democrats! So are most major tech CEOs. Political contributions are publicly recorded if you want to see where any individual stands… And when did VCs rail against “bailouts” in the past? There is a pretty big difference between being a mainstream capitalist and being a libertarian.

zeruch 4y ago
"Why do people think VCs are libertarians? Most of them are Democrats!" You seem to: 1. presume those two categories are mutually exclusive. They aren't. 2. Many of the libertarian values on the economic side, held by many in the VC/PE space regardless of political affiliation, means that just like Rand herself, they espouse -by action if not by word- "privatize gain, socialize risk" pretty much by rote. Anyone shocked by this either isn't looking, hasn't been in this business very long, or is the person mentioned in the Steinbeck quote (paraphrased here for contextual re-appropriation) "the rubes see themselves not as an exploited set of growth-hackers and disruption-monkeys, but as temporarily embarrassed billionaires."
rexreed 4y ago
Let me acquaint you with Peter Thiel, a libertarian VC: https://www.wired.com/story/the-libertarian-logic-of-peter-thiel/ https://www.wired.com/story/the-libertarian-logic-of-peter-t... And lest you think he's the only libertarian VC: https://www.newstatesman.com/quickfire/2023/03/silicon-valley-bank-collapse-hypocrisy-libertarian-tech-bros https://www.newstatesman.com/quickfire/2023/03/silicon-valle... And to them railing against bailouts while asking for them now (from the above article): “Where is [the chairman of the Federal Reserve, Jay] Powell? Where is [the Treasury secretary, Janet] Yellen? Stop this crisis NOW,” tweeted the venture capitalist David Sacks – the same David Sacks who is a friend of Thiel and Musk, and who has previously heavily criticised “special-interest corruption” and bank bailouts. Bill Ackman, a billionaire hedge fund manager and Donald Trump supporter that has in the past complained about attempts by the government’s Securities and Exchange Commission to regulate one of his investment funds, performed some spectacular mental gymnastics over the weekend, calling on the FDIC to “guarantee all bank deposits”.
- pc86 4y ago
  I don't know that I would describe any of Thiel's opinions as "mainstream."
  - deleted 4y ago
    [deleted]
  - JetSpiegel 4y ago
    He was practically the GOP economic ideologue under Trump.

listenallyall 4y ago

I've got no love, nor much respect for venture capitalists, but I don't see that wanting, or expecting, to get your money out of a bank account to be corrupt or hypocritical. Equity bailouts, TARP relief funds, debt guarantees... those are entirely different stories. I also don't blame them for whining and complaining, likely anyone would do the same. The Fed sometimes has to make tough decisions, complying with everything that VCs want just reduces any faith or respect markets have for the Fed and its officers.

LiquidSky 4y ago
>I've got no love, nor much respect for venture capitalists, but I don't see that wanting, or expecting, to get your money out of a bank account to be corrupt or hypocritical. Of course we all want that, the issue is that there are long-established, clearly-defined rules for how much of your account is protected that somehow don’t apply to the rich. For you or I it’s $250,000. Need more to be whole? Too bad, suck it up, that’s the law. But VC accounts? 100% recovery sir, sorry for the trouble! >I also don't blame them for whining and complaining, likely anyone would do the same. Except until last week most of these guys were crowing about PERSONAL RESPONSIBILITY and living with your choices and how handouts and bailouts were evil in response to workers and consumers asking for anything Curiously though, when it became about their money, suddenly it’s GOVERNMENT HELP
- initplus 4y ago
  People are getting too caught up in the 250k limit. Most bank failures result in all depositors being made whole - even over the limit. Normally by regulators “hinting” that a larger bank should acquire the failing banks assets whole. FDIC exists to create faith in the banking system - no to just enforce a rule book on how deposit insurance is structured. The goal is for FDIC to never have to pay out in the first place - FDIC’s existence prevents the bank run from starting. The obvious conclusion to the 250k limit (splitting deposits between banks) doesn’t really do anything to actually reduce risk in the banking system, or risk to FDIC. Splitting deposits like this is artificial behaviour that doesn’t have any real benefits to overall stability of the economy.

guywithahat 4y ago

What makes you say they’re corrupt? The only accusation I’ve seen is that Thiel removed his money after the bank stopped processing his transactions, but that doesn’t seem nefarious to me

manicdee 4y ago
The obvious chain of events is payments not being processed, Thiel gets on the blower, receives inside information which causes him concern, removes his money while he still can. To me as a low information armchair expert it seems bizarre that Thiel could move money out while SVB was having trouble moving money at all.

aaronbrethorst 4y ago

Privatize the profits! Socialize the losses!

twblalock 4y ago
The profits from tech are available to investors via the stock market. Meanwhile, no taxpayer money is being used to clean up the failure of SVB and prevent the contagion from spreading.
- deleted 4y ago
  [deleted]
- dsm4ck 4y ago
  where is the money coming from if not taxpayers?
  - twblalock 4y ago
    The FDIC does not get a penny of taxpayer money. Member banks pay for it. Member banks also pay for the Fed.
    - brightlancer 4y ago
      Member banks pay for it _by law_. And those member banks get that money either by charging customers for it or by reducing what they provide in returns on investment. It may not be coming from income taxes, but it's definitely socializing the losses and I would argue it's effectively coming from the taxpayers.