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> 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.

by senko 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. And then a bunch of small business fail, then everyone else looks at 20 other small and middle-tier banks and realizes they don't want to end up the same way and pull their money out, then they fail, per your suggestion FDIC still does nothing, then another couple dozen banks and couple thousand business fail ...and next week you're back in 2008.

eep_social 4y ago
You are echoing bullshit driven by the VC freak out over the weekend. There are literally hundreds of ways that actual small businesses could have bridged this disruption. Those that failed this basic risk-management exercise would have richly deserved what they got. How else are they going to learn?
Gwypaas 4y ago
> And then a bunch of small business fail, then everyone else looks at 20 other small and middle-tier banks and realizes they don't want to end up the same way and pull their money out, then they fail, per your suggestion FDIC still does nothing, then another couple dozen banks and couple thousand business fail ...and next week you're back in 2008. That is already in motion. Every company that had yet to do it is now looking into its liquidity management.
doodlesdev 4y ago
> And then a bunch of small business fail, then everyone else looks at 20 other small and middle-tier banks and realizes they don't want to end up the same way and pull their money out, then they fail Why the hell should a bank fail if people take their money out of it? THAT's the problem. It's just not a thing in other parts of the world _even with fractional banking_. The fact a "bank run" can generate losses for depositors is simply a consequence of a lack of regulation. The further fact this can generate a "contagion" is a consequence of the banking system simply not hedging their investments correctly and not applying simple risk-management mechanisms, and they do it for the same reason: lack of regulation that keeps the accountable. Again, this kind of problem simply doesn't exist elsewhere. Just look outside the United States and the solution is simple: either you deregulate or you regulate, you can't have your cake and eat it too.

by senko 4y ago

eep_social 4y ago

You are echoing bullshit driven by the VC freak out over the weekend. There are literally hundreds of ways that actual small businesses could have bridged this disruption. Those that failed this basic risk-management exercise would have richly deserved what they got. How else are they going to learn?

Gwypaas 4y ago

> And then a bunch of small business fail, then everyone else looks at 20 other small and middle-tier banks and realizes they don't want to end up the same way and pull their money out, then they fail, per your suggestion FDIC still does nothing, then another couple dozen banks and couple thousand business fail ...and next week you're back in 2008. That is already in motion. Every company that had yet to do it is now looking into its liquidity management.

doodlesdev 4y ago

> And then a bunch of small business fail, then everyone else looks at 20 other small and middle-tier banks and realizes they don't want to end up the same way and pull their money out, then they fail Why the hell should a bank fail if people take their money out of it? THAT's the problem. It's just not a thing in other parts of the world _even with fractional banking_. The fact a "bank run" can generate losses for depositors is simply a consequence of a lack of regulation. The further fact this can generate a "contagion" is a consequence of the banking system simply not hedging their investments correctly and not applying simple risk-management mechanisms, and they do it for the same reason: lack of regulation that keeps the accountable. Again, this kind of problem simply doesn't exist elsewhere. Just look outside the United States and the solution is simple: either you deregulate or you regulate, you can't have your cake and eat it too.